Soon after the Khan administration took over, it became obvious that the main foreign policy objective was to placate the United States in order to create some breathing room to resolve immediate issues. And the road to a reset in US-Pak relations went through the Gulf. No wonder PM Khan ended up visiting Saudi Arabia and the United Arab Emirates thrice each in a year. It helped that the premier struck a personal rapport with the Saudi Crown Prince, who is said to have played a leading role in getting Khan an audience with Trump last month. The two GCC majors also helped Pakistan financially as they provided $5 billion in assistance in the entire fiscal year 2018-19. Some investment deals are also in the pipeline.
As always, for Pakistan to work to its advantage the diplomatic see-saw that it has long been playing between China and the US, it had to let one side down a bit. So it was for all to see that China wasn't the PM's first overseas visit - in fact, it was the third overseas trip, taking place in November 2018. Before the visit, the Pakistani leadership looked a little hesitant in praising CPEC's virtues and didn't project the same confidence it used to display in 2016-18 that CPEC would help transform Pakistan's economy. Beijing, however, seemed to understand Pakistan's predicament and allowed a mutual understanding to take root through measures like revising the Pak-China FTA. In fact, China continued to assist Pakistan in FY19, with foreign assistance of over $2 billion. The PM visited China again a few months ago, as a special guest at the Belt and Road Forum.
While that diplomatic dance was underway, the overtures to Malaysia, Turkey and Iran helped rekindle the brotherly ties Pakistan has historically enjoyed with these countries. The balanced foreign policy also helped revive Pakistan's historical stance of being a neutral friend in the face of regional rivalries. Hence, Qatar became curious as well - PM Khan visited Qatar and the Qatari Emir visited Pakistan in June. The immediate consequence was the Qatari deposit of $500 million with Pakistan out of a $3 billion assistance package. As with the Saudi and Emirati packages, the Qatari assistances also lacks a public disclosure of what kind of quid pro quos have been agreed or expected.
Meanwhile, the foreign policy highlight of the political year was the post-Pulwama spike in tensions between India and Pakistan. While the hostilities conveniently suited the BJP government's bid for what looked like a close re-election campaign, the response from the Pakistani side was regarded internationally as far more measured and mature. International news media wasn't eager to accept the Indian version of the "Balakot strikes" and the Indian evidence of the IAF-PAF "dogfight". Instead, it debunked some of those myths and highlighted Pakistan's actions that carefully de-escalated the crisis. As for PM Modi, he continues to resort to ghosting when it comes to Khan's mantra of talking for peace.
That diplomatic episode was upended in significance only by the PM's recent US visit. The three-day tour generated enough sound bites and photo-ops to help Khan and co persuade folks back home that they had Mr. Trump right where they wanted him to be. After all, the US President suggested as much that without Pakistan there was no resolution to America's longest war; he hinted on a restoration of aid and also argued for increasing bilateral trade; and as luck would have it, President Trump ended up offering to play a mediating role on Kashmir, something which has caused alarm bells in India. While all those nice things can change in a Trump tweet, it seems as if Pakistan has again been able to remind the US of its geopolitical importance. And Trump would like to "extricate" from Afghanistan before the 2020 elections.
While the chips may now be firmly in place, now comes the time to deliver results. In that context, the timelines matter. Pakistan has a critical FATF review due in October and a satisfactory progress is dependent on how accommodative will the hitherto-aggressive US representatives be on that forum. If Pakistan has indeed secured a transactional fair play with the Americans, the latter would likely want something in return before October. In that context, the Doha talks are expected to provide a breakthrough on a preliminary deal in September between the American and Taliban negotiators. Both sides - Pakistanis and the Americans - are expected to exercise their respective leverages in installments. What that might look like is the US getting an initial deal in September that is contingent on an intra-Afghan dialogue and Pakistan getting a conditional reprieve from FATF in October.
On the economic front, Pakistan has every reason to continue the accommodative foreign policy in order to keep bilateral inflows coming. In FY20, the government is expecting to receive over $6 billion in external assistance from China, over $6 billion from Saudi Arabia and $1 billion from the UAE. Though it would be hard to fulfill the IMF's structural benchmarks, most of which are due in FY20 and early FY21, there is enough incentive to do so in order to comfortably secure multibillion dollar injections from multilateral bodies like the World Bank and the Asian Development Bank. Securing both bilateral and multilateral assistance is essential to finance the current account deficit for some more years to come.