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Monday, February 02, 2026</div></div><header class=”entry-header”><span class=”cate-name si-post”>
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Politics </a>
</span><h1 class=”entry-title”>Why Strategic Partnerships Fail to Build Power in the Global South: Lessons from Pakistan</h1><div class=’post-summary’>From Caracas to Islamabad, strategic partnerships have promised development but delivered dependence only. As great-power competition intensifies, the real question is no longer who funds infrastructure, but who controls technology, learning, and production. Venezuela’s collapse and Pakistan’s long industrial stagnation show how partnerships focused on finance and infrastructure, rather than on technology and learning, reinforce dependence rather than build sovereignty.</div><div class=”single-authors”>By <span id=”authorname”></span></div><div class=”posted-on-single-post” style=”display:none”>
Monday, February 02, 2026</div></header><div class=”post-thumbnail”>
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February 02, 2026 07:38 EDT</div><div class=”new_icons_wrap”><div class=”article_comment_icon”>
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});</script> </div><div class=”entry-content full_post abcd”><p>Strategic partnerships are often presented as pathways to development for the Global South. Yet from Latin America to Asia and Africa, they have delivered finance and infrastructure without the technological capabilities needed for lasting transformation. As geopolitical competition intensifies, the key question is no longer who partners with whom, but who controls technology, learning and production.</p><p>Recent developments in Venezuela have forced developing nations to rethink their vulnerabilities in an increasingly coercive global economic order, underscoring how asymmetric power and economic dependencies can be exploited in ways that threaten national sovereignty and long-term stability.</p><p>Pakistan, a country of nearly 250 million people and a nuclear-armed state, continues to face significant external economic and structural vulnerabilities that have drawn increasing attention in global policy discussions. Like Venezuela, these challenges are systemic, rooted in concentrated external financing, import dependence, a narrow export base, and periodic governance and transparency gaps, creating external leverage that can undermine economic resilience and national sovereignty.</p><h2 class=”wp-block-heading”>The case of Venezuela: coercion, sanctions and the weaponization of dependence</h2><p>In January 2026, US authorities announced the <a href=”https://www.fairobserver.com/politics/beyond-the-fog-of-war-venezuelas-democracy-is-at-stake/” target=”_blank” rel=”noreferrer noopener nofollow”>detention</a> of Venezuelan President Nicolás Maduro following a highly controversial operation linked to long-standing sanctions and legal actions against his government, marking a sharp escalation in US–Venezuela tensions and intensified uncertainty over the country’s political future.</p><p>The capture was not an isolated incident but the culmination of months of intensified US pressure that combined sweeping sanctions on Venezuela’s oil and financial sectors with a maritime blockade designed to choke off the country’s primary source of revenue. Venezuela’s economy is overwhelmingly dependent on crude oil exports, which historically accounted for more than <a href=”https://www.dw.com/en/whats-next-for-venezuela-oil-after-us-ousts-maduro/a-75383322″ target=”_blank” rel=”noreferrer noopener nofollow”>90%</a> of foreign exchange earnings.</p><p>These measures have <a href=”https://www.reuters.com/business/energy/venezuelan-oil-exports-china-set-drop-us-blockade-limits-cargoes-2026-01-14/” target=”_blank” rel=”noreferrer noopener nofollow”>sharply reduced</a> Venezuela’s ability to export crude oil, disrupting longstanding trading relationships, particularly with China, and contributing to a deepening economic collapse. The bolívar has plunged on black markets, inflation continues to surge, and shortages of foreign exchange have squeezed imports and public services.</p><p>This <em>Fair Observer</em> <a href=”https://www.fairobserver.com/politics/beyond-the-fog-of-war-venezuelas-democracy-is-at-stake/” target=”_blank” rel=”noreferrer noopener nofollow”>analysis</a> highlights that the aftermath of Maduro’s capture leaves Venezuela at a “turning point,” with democratic forces facing a difficult struggle for influence even as the <em>Chavista</em> elite retains significant institutional power.</p><p>Meanwhile, the US government has <a href=”https://www.reuters.com/business/energy/venezuela-us-talks-export-venezuelan-oil-us-sources-say-2026-01-06/” target=”_blank” rel=”noreferrer noopener nofollow”>signaled</a> potential shifts in oil policy, including agreements to export Venezuelan crude to US refineries and intentions to involve American energy companies in rebuilding the industry, a move that would reshape control over Venezuelan oil flows but also carry environmental and economic risks.</p><p>Overall, these developments highlight the potential limits and risks of coercive economic and military partnerships focused on resource control. While intended to weaken an authoritarian regime, they have also <a href=”https://www.fairobserver.com/politics/beyond-the-fog-of-war-venezuelas-democracy-is-at-stake/” target=”_blank” rel=”noreferrer noopener nofollow”>intensified</a> economic collapse and humanitarian hardship, raised serious international legal concerns and created new geopolitical fault lines around Venezuela’s oil sector.</p><p>A <a href=”https://www.reuters.com/world/americas/venezuelas-billions-distressed-debt-who-is-line-collect-2026-01-04/” target=”_blank” rel=”noreferrer noopener nofollow”><em>Reuters</em> report</a> explains that Venezuela’s long-running sovereign debt crisis has come into sharp focus after political upheaval. The country has been in default since late 2017, failing to pay on bonds issued by the government and its state oil company, <em>Petróleos de Venezuela, S.A.</em> (PDVSA). Accrued interest and legal claims have swollen total external liabilities, including defaulted bonds, bilateral loans and arbitration awards, to an estimated $150–170 billion, far exceeding Venezuela’s GDP. Creditors include international bondholders, arbitration award winners and major bilateral lenders such as China and Russia.</p><h2 class=”wp-block-heading”>The resource illusion</h2><p>Venezuela possesses the world’s largest proven crude oil reserves, <a href=”https://www.opec.org/assets/assetdb/asb-2025.pdf” target=”_blank” rel=”noreferrer noopener nofollow”>estimated</a> at around 303.221 billion barrels in 2024 — roughly 17% of global reserves. These vast reserves are concentrated primarily in the Orinoco Oil Belt and consist largely of heavy crude, which is more difficult and costly to produce. Beyond petroleum, Venezuela’s natural resource base includes natural gas, iron ore, gold, bauxite, diamonds, and other minerals.</p><p>In 2023, Venezuela produced about 742,000 barrels per day of crude oil, a 70% decline from 2013 levels. After a decade of contraction, however, output increased by 13% in 2021 and 18% in 2022, driven by Iranian diluent shipments, technical support from China National Petroleum Corporation (CNPC) and the partial return of oil service providers following PDVSA debt settlements. Production also benefited from Chevron’s expanded role after limited sanctions waivers. Oil export volumes rose in <a href=”https://www.reuters.com/business/energy/venezuelas-2024-oil-exports-climb-105-amid-political-turmoil-2025-01-03/” target=”_blank” rel=”noreferrer noopener nofollow”>2024</a> despite operational disruptions and ongoing political uncertainty, but by late <a href=”https://www.spglobal.com/energy/en/news-research/latest-news/crude-oil/123025-venezuelan-oil-production-exports-fall-as-us-ramps-up-sanctions-enforcement” target=”_blank” rel=”noreferrer noopener nofollow”>2025</a>, intensified sanctions enforcement and reduced tanker movements heightened uncertainty in the oil sector, complicating broader economic prospects.</p><p>According to the <a href=”https://documents1.worldbank.org/curated/en/099100824155021548/pdf/P178446-7dfe6e92-9cf0-4d24-ad25-20b1320904c2.pdf” target=”_blank” rel=”noreferrer noopener nofollow”>World Bank’s</a> <em>Changing Wealth of Nations 2024</em>, sustainable economic progress is best assessed by changes in real wealth per capita, which reflect future production and consumption opportunities. National wealth includes produced capital (infrastructure and factories), natural capital (forests, fisheries, fossil fuels), human capital (labor and skills) and net foreign assets. Low- and lower-middle-income countries, home to half the world’s population, possess only about 7% of global wealth, with little evidence that this gap is narrowing.</p><p>Venezuela’s prolonged oil dependence exhibits classic features of <a href=”https://www.investopedia.com/terms/d/dutchdisease.asp” target=”_blank” rel=”noreferrer noopener nofollow”>Dutch disease</a> (an economic phenomenon in which the rapid development of one sector of the economy causes a decline in other sectors). Resource-driven currency appreciation and fiscal reliance on oil crowded out manufacturing and technological development, leaving the economy poorly diversified and vulnerable to price volatility. Political interference, chronic underinvestment and the loss of technical expertise <a href=”https://www.cfr.org/backgrounder/venezuela-crisis?” target=”_blank” rel=”noreferrer noopener nofollow”>weakened</a> the national oil company, accelerating infrastructure decay and output decline. Exports remained concentrated in a low-technology commodity, while investments in advanced processing and human capital lagged.</p><h2 class=”wp-block-heading”>Partnerships that reinforce dependence</h2><p>Economic partnerships formed under crisis conditions usually entrench structural dependency in the Global South. China–Venezuela cooperation represents a classic example of this dynamic. The cooperation between the two countries has been anchored in energy exports and Chinese state loans tied to infrastructure finance, making Venezuela one of China’s most indebted and strategically engaged partners in Latin America. Venezuela’s experience reflects a broader pattern: strategic partnerships seldom deliver real industrial upgrading or technological autonomy.</p><p>As socialist and left-wing critics have long argued, such arrangements often reinforce dependency rather than build self-reliance. They provide temporary financial relief while deepening asymmetric dependence. Access substitutes for capability. When external commitments are not paired with domestic capacity-building, they create debt rather than learning.</p><p>Pakistan’s experience across Western, Gulf and Chinese alliances has followed the same logic. Since the 1950s, Pakistan has repeatedly relied on external financing — from US grants during the Cold War to International Monetary Fund (IMF) stabilization programs and, more recently, large-scale borrowing under the China–Pakistan Economic Corridor (<a href=”https://cpec.gov.pk/” target=”_blank” rel=”noreferrer noopener nofollow”>CPEC</a>). These inflows provided short-term balance-of-payments relief and expanded infrastructure and energy capacity. What they did not enforce was technology transfer, domestic capability building or cumulative industrial deepening.</p><h2 class=”wp-block-heading”>Pakistan’s missing wealth: why infrastructure alone has not delivered power</h2><p>National wealth extends beyond GDP to include produced, natural, human and foreign assets. Pakistan’s development experience shows how focusing mainly on infrastructure without strengthening the others leaves economies vulnerable rather than resilient.</p><p>At independence in 1947, Pakistan inherited a limited economic base. Industry accounted for less than 10% of GDP and was confined to agro-processing and light manufacturing such as textiles, sugar, leather and food products. Heavy industry, capital-goods production and advanced manufacturing were virtually absent. Human capital was underdeveloped, and foreign assets were minimal.</p><p>Seven decades later, the structure has not fundamentally changed. In fiscal year (FY) 2024–25, manufacturing and mining together contributed roughly <a href=”https://finance.gov.pk/survey/chapter_24/3_manufacturing%20and%20mining.pdf” target=”_blank” rel=”noreferrer noopener nofollow”>13%</a> of GDP, far below the levels achieved by East and Southeast Asian industrializers. Steel output remains limited and import-dependent. Engineering goods are weak. Capital equipment is largely imported. Technological upgrading has been episodic rather than cumulative. Pakistan expanded motorways, roads, ports and power plants but did not build the human and technological capital needed to sustain industrial transformation.</p><p>For decades, Pakistan pursued development through externally financed infrastructure. Physical capacity expanded, but productive capability did not. Factories that were able to design, adapt and upgrade technology remained scarce.</p><p>Heavy industry and technological expertise provide countries with greater strategic independence, stronger military capabilities and improved export performance. Unfortunately, Pakistan received projects, not platforms for learning or technological upgrading. Pakistan’s repeated reliance on <a href=”https://www.imf.org/external/np/fin/tad/extarr2.aspx?memberKey1=760&date1key=2023-08-31&” target=”_blank” rel=”noreferrer noopener nofollow”>IMF programs</a>, from early Standby Arrangements to Extended Fund Facilities in 2019–23, and large-scale borrowing under CPEC eased short-term balance-of-payments pressures. They did not enforce technology transfer or domestic capability building. External finance stabilized the economy temporarily but failed to build long-term productive capacity.</p><h2 class=”wp-block-heading”>Capability, control and the failure to convert assets into power</h2><p>A country’s external position is part of its national wealth. Pakistan’s net foreign assets remain weak. Imports consistently outpace exports. In FY25, the goods trade deficit widened to about $21.3 billion. Workers’ remittances reached a record <a href=”https://www.sbp.org.pk/press/2026/Pr-09-Jan-2026.pdf” target=”_blank” rel=”noreferrer noopener nofollow”>$38.3 billion</a>, providing vital foreign-exchange support. Yet remittances are private transfers, not engines of productive transformation. Pakistan exports low-value, climate-sensitive goods and imports high-value manufactures, energy and technology. Environmental shocks, therefore, translate directly into balance-of-payments stress, reinforcing dependence on borrowing.</p><p>Pakistan has frequently acquired advanced systems without acquiring the knowledge to reproduce them. The <a href=”https://en.wikipedia.org/wiki/Karachi_Nuclear_Power_Complex” target=”_blank” rel=”noreferrer noopener nofollow”>Karachi Nuclear Power Plant</a>, commissioned in 1971, marked the entry into civilian nuclear electricity generation. Yet reactor design, fuel fabrication and heavy engineering were not indigenized. Pakistan learned how to run the system, but not how to build or fully control it.</p><p>A similar pattern unfolded in steel. Soviet support enabled Pakistan Steel Mills in the 1970s, but the project lacked integrated industrial linkages and suffered from energy shortages, import dependence and politicized management. Under CPEC, power plants, roads and ports were delivered at scale through turnkey contracts. Core capabilities in metallurgy, equipment design and process engineering remain external. </p><p>Pakistan possesses fertile land, mineral resources, water systems and energy potential. Yet governance of these assets has been weak. <a href=”https://www.engroenergy.com/engro-powergen-thar-limited/#overview” target=”_blank” rel=”noreferrer noopener nofollow”>Thar</a> coal development prioritized rapid power generation while deferring industrial deepening. Coal beneficiation, chemicals and mining-equipment ecosystems never emerged. In renewable energy, imports of solar panels and electric vehicles lowered short-term costs but crowded out domestic manufacturing.</p><p>Climate change magnifies these weaknesses. Heat stress, floods, water scarcity and grid instability threaten agriculture, energy systems and infrastructure. Without domestic manufacturing and research and development ecosystems, Pakistan enters the climate transition structurally unprepared.</p><p>Globally, human capital accounts for about 60% of total wealth valued in <a href=”https://documents1.worldbank.org/curated/en/099100824155021548/pdf/P178446-7dfe6e92-9cf0-4d24-ad25-20b1320904c2.pdf” target=”_blank” rel=”noreferrer noopener nofollow”>2020</a>. Pakistan underinvests in education, skills, health and female labor-force participation. Women represent only about 15% of human capital in South Asia in 2020, compared with 44% in Latin America and the Caribbean. Pakistan holds <a href=”https://www.finance.gov.pk/survey_2025.html” target=”_blank” rel=”noreferrer noopener nofollow”>3.1%</a> of the world’s population but only 0.9% of global GDP. Low per capita income reflects weak human capital accumulation, not merely fiscal mismanagement.</p><h2 class=”wp-block-heading”>Historical roots of structural imbalance</h2><p>Pakistan’s development choices reinforced these weaknesses. The 1960s <a href=”https://www.dawn.com/news/1940429″ target=”_blank” rel=”noreferrer noopener nofollow”>agrarian reforms</a> focused on land redistribution but neglected water rights, rural credit and technological upgrading. The 1970s nationalization agenda lacked capable implementation. During the <a href=”https://www.britannica.com/event/Afghan-War” target=”_blank” rel=”noreferrer noopener nofollow”>Afghan war</a>, foreign dollars flowed due to strategic alignment, not productivity. The social costs of militarization, narcotics and radicalization were borne by the wider population.</p><p>Privatization in the 1990s proceeded without parallel investment in technology and human capital. After 9/11, external financing surged once more, again driven by geopolitics rather than economic performance.</p><h2 class=”wp-block-heading”>Authority without legitimacy: the cost of military dominance</h2><p>For nearly eight decades, Pakistan’s military has exercised direct or indirect influence over the state’s political trajectory. While often justified in the name of stability, this dominance has weakened democratic institutions, distorted economic priorities, discouraged investment and entrenched a security-first mindset at the expense of sustainable development.</p><p>Political leadership derives legitimacy through public trust and inclusive decision-making. Military leadership operates through hierarchy and security-centric priorities, with limited engagement in socioeconomic realities. When the military dominates the state, economic performance suffers and the population bears the costs.</p><p>In an era of globalization, where Generation Z is more vocal, connected and globally mobile, there is growing pressure for Pakistan to establish clear constitutional limits on both political and military power. At the same time, supporters of former Prime Minister Imran Khan have mobilized around narratives of external interference, particularly regarding the US’ perceived influence in Pakistan’s political affairs. </p><p>From the fall of President <a href=”https://en.wikipedia.org/wiki/Iskander_Mirza” target=”_blank” rel=”noreferrer noopener nofollow”>Iskander Mirza</a>’s government to the ouster of Khan’s administration, Pakistan’s politics have often been shaped by diplomatically convenient institutional pressure involving the military, the US and, at times, key Middle Eastern partners — the same actors that dominate the country’s external financing. </p><p>These relationships have favored short-term stabilization over institutional autonomy, leaving Pakistan vulnerable to external leverage. By contrast, in several Latin American countries, external influence has more frequently taken the form of direct political and military intervention, as recent developments in Venezuela illustrate.</p><h2 class=”wp-block-heading”>A sovereignty-based approach to wealth</h2><p>True national wealth requires balance:</p><ul class=”wp-block-list”><li>Produced capital that supports learning, not just operation</li><li>Natural capital managed through stewardship, not extraction</li><li>Human capital built through education, inclusion, and skills</li><li>Foreign assets strengthened through exports, not remittances</li></ul><p><strong>Access does not create power — capability does.</strong> Pakistan’s reliance on turnkey projects must end, replaced by localization, supplier ecosystems and real technology transfer. Universities must be embedded in industrial policy. A knowledge economy cannot be imported. It must be built at home.</p><h2 class=”wp-block-heading”>The larger lesson</h2><p>Venezuela’s collapse is not an isolated tragedy; it is a cautionary tale of what happens when natural capital is squandered, human capital is neglected and technological sovereignty is never achieved. Industrial power and climate resilience are not imported — they are built.</p><div class=”signup-popup square-email-box n-email-popup light-pink”><div class=”modal-content modal-content-email-box”><div class=”display-flex”><div class=”mobile-view-content”><h2>We are a rare nonprofit in the world news space. Most other organizations are owned by billionaires or governments. We are bottom-up, not top-down and bring you perspectives from around the world. So, sign up now for our free newsletters to hear from our <strong>3,000+ voices</strong> from <strong>90+ countries</strong>.</h2></div><div class=”signup-popup”><div class=”signup-innersection”><form method=”post” action=”https://www.fairobserver.com/moosend-subscription”>
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jQuery(‘.close-popup-btn-signup’).click(function () {
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