KARACHI (Reuters) – Pakistan’s role in brokering a peace deal in the Iran war has led to widespread diplomatic acclaim that could bring Islamabad some economic benefits, but analysts question whether such gains can help resolve the fault lines in its economy._x000D_
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Prime Minister Shehbaz Sharif and army chief Field Marshal Asim Munir attended talks between Iran and the U.S. in the Swiss town of Buergenstock last weekend, the culmination of Pakistan’s months-long role in one of the world’s most consequential diplomatic negotiations._x000D_
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“This guy. What’s up, man?” U.S. Vice President JD Vance said upon seeing Munir in the resort town before giving the army chief a hug. Both sides, along with several world leaders, have thanked Islamabad for helping ease a conflict that could have disrupted the Strait of Hormuz for a long period, choked global oil supplies and shattered the world economy._x000D_
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The breakthrough has raised Pakistan’s profile and analysts say the country of 250 million people has an opportunity to convert that goodwill into some gains for an economy marked by decades of boom and bust. But they said any benefits were unlikely to fix deeper structural issues including social and economic inequity, a narrow tax base and repeated IMF â bailouts._x000D_
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That distinction means Pakistan’s leverage this time comes from being useful to multiple sides simultaneously — Washington, Tehran, Gulf states, Turkey and China._x000D_
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Former finance minister Ismail said the diplomatic role had enhanced Pakistan’s international prestige, but that had no effect on the high costs, weak exports and external repayments that keep it dependent on the IMF._x000D_
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“Our house is in such disorder that foreigners can’t really help us unless we help ourselves,” he said. “Nothing here in this war changes that and â we will be continually dependent on the IMF.”_x000D_
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Asim Ijaz Khwaja, a professor at Harvard University and director of the Harvard Center for International Development, said Pakistan should resist short-term financial concessions that do not raise productivity._x000D_
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Instead, he said, Pakistan should seek academic exchanges and scholarships, preferential market access for textiles and IT services, technology transfer and green investment frameworks._x000D_
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Hamish Falconer, Britain’s minister for the Middle East, thanked Islamabad for its peacekeeping role during a visit last week and told Reuters the UK saw “huge scope for deepening trade links” with â Pakistan and that a British trade minister was expected to visit in the coming months._x000D_
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Diplomats from two other Western countries have also said their governments are exploring strengthening economic ties following Islamabad’s peace efforts. They did not wish to be identified further._x000D_
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‘PEACE PIVOT’_x000D_
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Atif Mian, professor of economics, public policy and finance at Princeton University, said Pakistan should avoid treating diplomacy as another route to deposits, rollovers or IMF-style relief. The real prize, he said, was a “peace pivot” — external and â domestic — built on regional trade, energy links with Iran, and deeper integration with the Gulf and Turkey through exports, technology transfer and co-dependent industries._x000D_
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Analysts said any new economic gains would not fix Pakistan’s deeper constraints._x000D_
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“If structural reforms are not implemented, the country is poised for an implosion in coming decades,” said Adeel Malik, associate professor of development economics at Oxford University._x000D_
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“There are deep-seated grievances among the young and the shrinking middle classes against Pakistan’s ruling elite. The prevailing system has given ruling elites an extended lease of life but has made the country socially and economically insecure.”
