The highlights this week: Islamabad struggles to patch up ties with neighbors , New Delhi denies playing a role in the Pegasus scandal , and a look at Pakistan’s growing tech sector .

Welcome to Foreign Policy’s South Asia Brief.

The highlights this week: Islamabad struggles to patch up ties with neighbors, New Delhi denies playing a role in the Pegasus scandal, and a look at Pakistan’s growing tech sector.

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Pakistan’s Regional Diplomacy Dilemma

In recent months, top Pakistani leaders have heralded a foreign-policy shift from “geopolitics to geoeconomics.” Put simply, Islamabad wants to strengthen ties with its South and Central Asian neighbors to foster more trade and investment. It has led to some success stories. But recent developments with China and Afghanistan underscore the difficulty of this transition.

The shift is likely fueled by two motivations. One is to bring ballast to Pakistan’s economy by creating more markets and trade partners and by reducing the regional tensions that distract the country from a greater focus on economic development. The other likely motivation is reputational. Islamabad wants to improve its troubled global image by demonstrating that it’s a responsible neighbor, not a regional pariah notorious for harboring terrorists.

There have already been achievements. This year, Islamabad secured a border cease-fire with New Delhi, its biggest rival, reducing tensions that nearly led to war in 2019. Relations with Dhaka, fraught since a brutal conflict led to Bangladesh’s independence in 1971, have seen improvements. Pakistani Prime Minister Imran Khan held a call with his counterpart Sheikh Hasina last summer, and the two have subsequently exchanged letters. Khan also visited Sri Lanka this year to enhance commercial relations with Colombo, with which Islamabad enjoys strong security ties.

China’s deepening footprint in South Asia, fueled by infrastructure investments and more recently COVID-19 vaccine exports, gives Islamabad an opportunity to ride on its ally’s coattails and make its own inroads in countries—Bangladesh, Maldives, Nepal, and Sri Lanka—where China’s influence is increasing. In effect, China’s stepped-up engagements can be an opening for Pakistan’s own diplomacy—and especially if Beijing encourages these countries to explore closer trade and diplomatic ties with Islamabad.

Meanwhile, Pakistan is deepening engagement in Central Asia, a region Islamabad views as highly strategic because of its energy assets. In February, Islamabad inked an accord with Afghanistan and Uzbekistan for a trans-Afghan railroad. Last week, it reached an agreement with Afghanistan, Pakistan, and the United States focused on stability and connectivity. Islamabad enjoys a key advantage in Central Asia: The region’s two top power brokers are Pakistan’s ally China and its increasingly close friend Russia.

Pakistan has also showcased its regional convening power. In February, its navy hosted a five-day exercise in the Arabian Sea with 45 countries from the region and beyond.

Still, completing a pivot to geoeconomics is a tall order. The domestic economic constraints, recently articulated by Arif Rafiq for Foreign Policy and Hamna Tariq for South Asian Voices, are considerable. But so are the diplomatic obstacles. India, despite recent tensions with some neighbors, remains South Asia’s undisputed heavyweight. Witness its leadership on regional pandemic responses and its spearheading of broader regional cooperation through groupings like Bimstec. Also, even with the border cease-fire, India-Pakistan relations remain in crisis. Islamabad blamed a June terrorist attack in Lahore on Indian intelligence and has ruled out any back-channel talks.

Additionally, Pakistan is experiencing challenges with two different but significant relationships. An attack in northwestern Pakistan last week that killed nine Chinese nationals—one of the deadliest ever on Chinese targets in Pakistan—prompted unusually strongly worded statements of concern from Beijing. While the relationship remains strong, long-standing Chinese anxieties about security in Pakistan are becoming an irritant—especially with the two main perpetrators of attacks on Chinese targets in Pakistan, violent separatist groups and the Pakistani Taliban, enjoying a resurgence.

Meanwhile, Islamabad’s always volatile relations with Kabul have deteriorated in recent weeks, with Afghan officials angrily accusing Pakistan of providing various forms of support to the Taliban. Then, on July 16, the daughter of Afghanistan’s ambassador to Pakistan was attacked in Islamabad. Kabul took the drastic step of recalling its ambassador and other senior diplomats—even as Pakistani officials questioned Kabul’s version of the events resulting in the attack.

Islamabad views connectivity as a key component of its geoeconomics pivot. Consequently, its chief infrastructure partner’s concerns about worsening security risks in Pakistan are nothing to sneeze at. Additionally, Islamabad’s poor relations with Kabul bode ill for a floundering Afghan peace process because the Afghan government will be uncomfortable about Pakistan—which has close ties to the Taliban—playing a major role. These tensions amplify the elusiveness of the peace and stability needed for Pakistan to engineer its shift to geoeconomics.

Bitter rivalries, diplomatic tensions, and security threats all die hard. And they’re raining on Pakistan’s geoeconomics parade.

The Week Ahead

July 27-28: U.S. Secretary of State Antony Blinken expected to visit India (no official announcement yet).

July 29: The Heritage Foundation hosts a virtual event on “China’s aggressive new tactics in South Asia.”

What We’re Following

India named in spyware scandal. An explosive investigation by 17 media outlets alleges that an Israeli company sold Pegasus spyware to at least 10 governments, including India’s. The report alleges that more than 50,000 phone numbers, including more than 1,000 Indian ones, have been surveilled or targeted for possible surveillance.

India’s government denies the allegations. It’s notable, however, that many of the Indians whose phone numbers appear on the list are prominent critics of the government or journalists who have investigated government corruption. (One of the latter group, Sushant Singh, published his take on the scandal for FP this week.) New Delhi’s involvement, if true, wouldn’t be the first case of a South Asian state using spyware on its own citizens. A February investigation by Al Jazeera found that Bangladesh’s army acquired Israeli technologies that can “monitor the mobile phones of hundreds of people simultaneously.”

Nepal’s new premier wins confidence vote. Sher Bahadur Deuba, Nepal’s new prime minister, won a confidence vote on Sunday. The triumph ensures he’ll keep his new job for a year and a half, when the country holds elections. The Supreme Court disqualified Deuba’s predecessor, K.P. Sharma Oli, from office on July 12, ruling that he violated the constitution by dissolving the parliament twice.

Deuba’s immediate challenge is to confront one of South Asia’s most serious COVID-19 surges. Nepal’s pandemic wave is now generating ripple effects across its public health sector. New reportage from the Guardian finds that maternal and neonatal deaths increased significantly over the last year. The spike is attributed to pregnant women not leaving their homes for medical appointments because of the pandemic, resulting in a lack of proper health care before and during their babies’ births.

Inconclusive Taliban negotiations in Doha. With violence raging in Afghanistan and the Taliban showing no signs of easing up on their furious offensives, senior members of the government’s negotiating team met with their Taliban counterparts in Doha last weekend. The meetings produced a joint declaration that merely pledges to have the two sides keep talking.

Few expected the talks to yield anything consequential. Even a brief cease-fire to coincide with this week’s Eid al-Adha holiday wasn’t on the cards. The Taliban have previously agreed to short Eid truces, including one in May. But until and unless Afghanistan’s beleaguered security forces apply more battlefield pressure on the Taliban, the group is unlikely to commit itself to sustained negotiations, much less to making compromises and concessions.

Relatedly, a promotional note: This week, the Wilson Center launched “Hindsight Up Front,” a new initiative that will produce events, research, interviews, and more on the future of Afghanistan, its people, the region, and why it all matters.

Under the Radar

When one thinks about flourishing high-tech industries in South Asia, India tends to come to mind. But Pakistan is quietly building a vibrant sector of its own. According to its government, the country boasts 2,000 registered technology firms and produces 20,000 new IT grads each year. Pakistani innovators and software applications have garnered international attention and awards.

Last month, Islamabad announced plans to double the country’s IT sector in two years through the establishment of a dozen “tech zones” that aim to provide employment opportunities for recent grads. In 2021, according to a Tech Crunch report published this month, “Pakistani startups are on track to raise more money than the previous five years combined.” Much of their financing has come from Asia, the Middle East, and “even famed investors from Silicon Valley.” However, overregulation and censorship pose obstacles. Islamabad periodically cracks down on tech platforms. This week, the Pakistan Telecommunication Authority, citing inappropriate content, blocked access to TikTok.

Quote of the Week

“Late last evening, we saw a report which has been amplified by a few sections with only one aim—to do whatever is possible and humiliate India at the world stage, peddle the same old narratives about our nation, and derail India’s development trajectory.”

—Amit Shah, India’s interior minister, reacting to the release of the Pegasus spyware report.

Regional Voices

The Indian strategic analyst C. Raja Mohan argues in the Indian Express that we shouldn’t overestimate China’s role in Afghanistan after the U.S. withdrawal. “Neither the prospect of mining Afghanistan’s natural resources nor the vanity of being the newest superpower will compel China to rush into the Afghan vacuum,” he predicts.

Former Sri Lankan official Harim Peiris contends, in an open letter to new Finance Minister Basil Rajapaksa published in the Island, that Colombo must change its foreign economic policy: “A sound foreign policy is a must for an island nation’s economy … so acting as if we live in a unipolar world, with China as the world’s sole superpower, has been an unwise approach.”

Arifa Noor, a Pakistani journalist, writes for Dawn that just because U.S. troops are departing Afghanistan doesn’t mean America’s military operations will end. “That there is considerable clamour in the US about not abandoning the Afghan people and the gains made since 2001, means force will continue to be used—from a distance,” she asserts.