What Pakistan gains from being a peacemaker

Pakistan’s role as a peacemaker in the Iran war, which undermined the security of the Gulf countries and affected multiple economies through energy price shocks, has raised its diplomatic profile across the world and garnered high praise from U.S. leadership.

Though the war has stressed Islamabad’s economy, its resolve to bring an end to the conflict is primarily driven by the need to avoid a spillover across its borders while fostering warm ties with the U.S., experts said.

Pakistan shares a 900-kilometer border with Iran and is home to the world’s second-largest Shia population, after Iran. In March, following the killing of Iran’s Supreme Leader Ayatollah Ali Khamenei, protests erupted in Karachi and Islamabad, leading to the deaths of more than 20 people, according to multiple media reports.

“Pakistan, perhaps more than any other country outside the Middle East, was highly vulnerable to the effects of the war,” Michael Kugelman, senior fellow for South Asia at the Atlantic Council, told CNBC in an email.

The country not only has economic ties with the Gulf countries, but also has a “mutual defense pact with Saudi Arabia—one that it wouldn’t want to have to invoke, given that it didn’t want to get dragged into the war,” he said.

“Pakistan had an especially strong incentive in seeing the war come to an end,” he added.

On Sunday, U.S. Vice President JD Vance credited Pakistan’s Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, chief of Pakistan’s Defence Forces, for their efforts in the peace process.

“I have talked to Field Marshal Munir more than I have talked to anyone in the last three months,” Vance said, adding that he would not have been at the peace talks without the “statesmanship” of Munir.

Even Trump, in an interview last week with Axios, called Munir a “great man.”

Given the significance of the peace deal, experts said Pakistan will certainly want to leverage its mediation role for economic benefit, particularly in its dealings with allies in Washington and the Gulf.

But support is likely to come in the form of favorable loan terms from Arab states or security aid from the U.S, rather than investment commitments, they said.

In the last few years, the country’s economy has been under stress, leading to repeated bailouts…