Copyright brecorder
Pakistan’s decision to ship rare earth minerals to the United States has sparked a lot of conversation around the world. It seems surprising to many that a country so closely connected to China would send such an important resource to Washington. After all, rare earth minerals are one of China’s strongest economic tools in its ongoing rivalry with the United States. But this move is not about betraying China. Instead, it’s a careful and practical step taken by Pakistan to secure its economic future. This decision reflects the urgency of the moment and Pakistan’s growing need to maintain a balanced strategy in its foreign relations. Pakistan has been facing major economic challenges for a long time. While the country is rich in valuable minerals, such as copper, gold, and rare earths, it has not been able to fully develop these resources. Factors like low investment, poor infrastructure, and outdated technology have kept the mining industry from reaching its potential. Adding to these difficulties is Pakistan’s growing debt. Debt servicing has become the largest part of the national budget, taking up a big chunk of government spending. For the fiscal year 2025–26, debt servicing is expected to cost between PKR 8.2 trillion and PKR 9.77 trillion, making up around 46.7 to 55 percent of the total budget of PKR 17.57 trillion. Among Pakistan’s international lenders, China remains the largest. It holds around 22 percent of Pakistan’s total external debt, which is roughly USD 28.8 billion as of the end of 2023. Although this share has slightly decreased due to repayments, China’s influence over Pakistan’s debt remains significant. In comparison, the World Bank holds 18 percent, and the Asian Development Bank holds about 15 percent of the debt. Even with support from other countries like Saudi Arabia and the UAE, Pakistan’s financial situation is still greatly influenced by its debt to China. This is why projects like exporting minerals are so important for Pakistan. It’s not just an economic move; it’s a strategic necessity. The recent deal with the United States offers more than just foreign exchange. It’s an opportunity to attract investment, gain access to new technologies, and fully develop the mineral supply chain within Pakistan. By doing this, Pakistan can create jobs, boost exports, and reduce its reliance on external loans. More importantly, it could help ease the debt burden and free up space in the budget for other critical areas like healthcare, education, and social development that directly affect the lives of ordinary people. However, working with the US on rare earth minerals does come with some risks. There is the potential for tension with China, given the significance of this resource. Although Pakistan has strong, long-standing ties with China, this new engagement with the US should be seen as a practical move to secure Pakistan’s economic future rather than a shift in allegiance. For the United States, this partnership is also a way to meet its own strategic needs. The US has been trying to reduce its dependence on China for critical minerals, as China controls most of the global supply of rare earths. By partnering with Pakistan, the US gains access to non-Chinese sources of these minerals while also helping Pakistan strengthen its industrial base. That said, this move does not mean Pakistan is distancing itself from China. The country’s relationship with China remains deep and strategic, with years of economic and defense cooperation, especially through the China-Pakistan Economic Corridor. Pakistan’s recent move should be viewed as a balanced approach to managing its relationships, not as a betrayal of its longtime ally. The world today is not divided into simple rival camps. The best way to serve national interests is through diversified partnerships and balanced diplomacy. Pakistan’s outreach to the US does not replace its ties with China, it complements them. By engaging with both China and the United States, Pakistan is taking a practical approach to its economic survival and growth. It is not about picking sides, but about finding the best ways to secure a stronger future for the country. Pakistan’s rare earth shipment to the US is not a political move; it is an economic one. Faced with rising debt and economic uncertainty, Pakistan is turning a potential geopolitical challenge into an opportunity for growth. Managing relationships with both Washington and Beijing will be crucial, but it is necessary for Pakistan’s long-term prosperity. If handled wisely, this step could help Pakistan move from being dependent on foreign loans to becoming more self-reliant. It could shift the country from managing short-term crises to focusing on long-term stability. In doing so, Pakistan will be able to use its resources, geography, and diplomacy to build a stronger and more confident future. This article emphasizes Pakistan’s pragmatic approach to dealing with its economic challenges. The rare earth shipment to the United States is a strategic move to help Pakistan reduce its debt, create jobs, and secure long-term stability, all while maintaining its strong ties with China. By diversifying its partnerships, Pakistan is positioning itself to navigate a complex and changing global landscape. Copyright Business Recorder, 2025
