These are turbulent times for global trade. India and Pakistan are struggling with rising tensions due to the Pahalgam attack; the Middle East crisis following Israel and Gaza is growing increasingly complex; and the Russia-Ukraine war continues unabated. Meanwhile, Iran has yet to finalise a nuclear deal with the United States, amid threats of force from President Donald Trump in the event of failure. President Trump’s tariff war with China also remains unresolved, as do his trade disputes with several other nations.

The situation is challenging, especially for Pakistan, where an economic recovery has only just begun and lacks sustainable improvements in the external sector. Continuation of this recovery hinges on a favourable geopolitical environment. Pakistan’s recent external economic gains have largely depended on remittances from overseas Pakistanis, particularly those residing in Gulf Cooperation Council (GCC) countries and the United States.

While an adverse geopolitical environment may have a moderately negative impact on remittance inflows, it........

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