The Institute of Strategic Studies Islamabad (ISSI), in collaboration with the Policy Research Institute of Market Economy (PRIME), convened a high-level roundtable on April 28, 2026, warning that the ongoing Middle East crisis poses serious economic risks for Pakistan while also opening a narrow window for strategic opportunity and reform.
Titled "The Middle East Crisis: Economic Implications and Emerging Opportunities for Pakistan," the forum brought together leading policymakers, economists, and analysts to assess the evolving geopolitical environment and its potential impact on Pakistan's economy.
Opening Remarks and Key Insights
In his welcome remarks, Ambassador Khalid Mahmood, Chairman of ISSI's Board of Governors, highlighted that developments in the Middle East carry far-reaching implications for Pakistan, particularly in energy security, trade flows, remittances, and overall macroeconomic stability.
Dr. Neelum Nigar, Director of the Centre for Strategic Perspectives (CSP) at ISSI, said Pakistan is facing a complex mix of heightened risks and emerging opportunities, stressing the need to strengthen institutional capacity and economic resilience in an increasingly uncertain global landscape.
Setting the tone for the discussion, Dr. Ali Salman, CEO of PRIME, emphasized the growing convergence between geopolitics and economics. He noted that the crisis underscores the importance of geoeconomics in shaping policy, pointing to emerging regional shifts such as new transit arrangements and evolving diplomatic engagements as signs of Pakistan's changing strategic position. He urged policymakers to move beyond conflict-driven narratives and instead pursue a "peace dividend" through proactive economic and diplomatic engagement. Key areas of focus, he said, include energy, trade, economic policy, China–Pakistan cooperation, and institutional preparedness.
Expert Discussion and Analysis
Opening the expert discussion, Dr. Hassan Dawood Butt observed that Pakistan is increasingly being viewed as a potential regional intermediary, but cautioned that without deep institutional reforms, the country may struggle to capitalize on this emerging role.
Dr. Nasir Iqbal of the Pakistan Institute of Development Economics (PIDE) outlined key macroeconomic risks, including rising oil prices, inflationary pressures, declining remittances, and potential export disruptions. However, he also identified opportunities in reconstruction demand across Gulf markets.
Highlighting structural challenges, Dr. Khaled Waleed of the Sustainable Development Policy Institute (SDPI) called for urgent reforms in Pakistan's energy sector, including modernization of the power grid, expansion of renewable energy, and improved storage capacity.
Dr. Uzma Zia of PIDE stressed the need to reduce reliance on remittances by transitioning toward a diversified economic model anchored in trade, logistics, and regional connectivity. She highlighted the importance of modernizing ports and developing integrated economic corridors to support this shift.
Meanwhile, Dr. Vaqar Ahmed of PRIME pointed to governance and coordination gaps, underscoring the need for stronger institutional frameworks, improved data-sharing mechanisms, strategic reserves, and proactive economic diplomacy.
Key Policy Priorities
Participants outlined several key policy priorities. These included the need for a comprehensive governance and policy reset to better convert external shocks into structured economic opportunities, as well as improved crisis preparedness.
Re-engagement with multilateral institutions such as the International Monetary Fund was also highlighted as essential, with calls for a more balanced programme aligned with long-term structural reforms and sustainable growth.
Experts cautioned that Pakistan's external account remains vulnerable, particularly as remittance flows from the Middle East could face volatility amid ongoing regional instability. At the same time, they identified emerging opportunities in shifting regional connectivity patterns, urging Pakistan's private sector to position itself to benefit from new transit and trade routes, including evolving linkages through Iran and adjacent corridors.
A strong emphasis was placed on infrastructure readiness, with participants calling for strategic investment in key port infrastructure—especially in Karachi and Gwadar—to capture growing transshipment and logistics opportunities in a rapidly reconfiguring regional trade environment.
Conclusion
The roundtable concluded with a consensus that while the Middle East crisis presents significant economic challenges for Pakistan, it also offers a critical opportunity for structural reform, improved governance, and strategic economic repositioning—provided timely and coordinated policy action is taken.
