London: Pakistan has the potential to be a global turnaround story. In an article in the Forbes, Daniel Runde said he recently spent time in-country listening to a wide range of perspectives and is convinced that U.S. policymakers and business leaders need to look at Pakistan beyond the security lens. “Getting our relationship right will require deeper thinking and action on issues around trade and investment, education, and broader economic development,” wrote Daniel Runde.

 The United States ought to be Pakistan’s preferred partner given its 70-year relationship with this strategic partner. But in order to participate in the country’s upgrowth, the United States of America would need to view Pakistan not as a problem to be solved but as a potential partner in the global arena.

The changes Pakistan has experienced over the years suggests that the United States should soon act on this opportunity. The Pakistan of today is similar to that of Colombia in the late 1990s. Western headlines on Pakistan today gloss over the progress this country has made on the security front, the increased political stability, and incremental progress on the economic front. In spite of this progress Pakistan still continues to be seen as a country in turmoil in the international arena which is far from the realities on the ground.

Pakistan’s improving security dynamic is the first change to note. It is hard to understate the before-and-after effects of the Taliban’s horrendous December 2014 attack. Almost immediately after the attack, the military responded in force by taking out 157 terrorists via air strikes and ground operations in the North Waziristan and Khyber tribal areas adjacent to Peshawar.

What has not sunk into international perceptions about the country is the tangible consensus among government, military, and Pakistani citizens against violent terrorists which includes those affiliated with both Pakistan and international organizations. Pakistan will continue to experience attacks by fringe groups given the geo-strategic positioning of the country, but policymakers and investors need to stop operating as if the Pakistani Taliban is at Islamabad’s doorstep and expand their anti terrorist policies country-wide.

Prime Minister Nawaz Sharif is governing with a competent cabinet, a majority coalition, and is working in tandem with the military to deliver peace and security. He has demonstrated enough of a commitment to democracy.

 For much of last year, Sharif exercised restraint against an active opposition that led a crippling 162-day sit-in in front of the National Assembly to contest the 2013 election results. Instead of opting for an aggressive approach, Sharif wisely deferred to an independent election mission to verify the results, which recently ruled in favor of his party.   The military’s decision not to use force against protesters – or the sitting prime minister – suggests that Pakistan could be on its way to further consolidating its fragile democracy.

Chinese investment is another reason why the United States should reassess its Pakistan calculus. Since Xi Jinping first announced the $46 billion China-Pakistan Economic Corridor (CPEC) in 2014, the project has quickly become the centerpiece of diplomatic relations between the two countries. The CPEC project aims to connect China and Pakistan, following the famous Silk Route and ending in Pakistan's Gwadar Port on the Arabian Sea.

Even the possibility of the scheme’s partial achievement has injected optimism in a country starved for infrastructure and energy investment. This deal with China has also greatly incentivized the government to clamp down on terrorist groups.  Economic success is by no means guaranteed especially given China’s checkered track record of investing in infrastructure projects abroad. Still, China’s bet on Pakistan could overshadow US contributions unless we rethink our mix of engagement.

 Similar to its approach in Kazakhstan, China is interested in leveraging Pakistan – in the words of Dan Twining – as a “launching pad” for greater connectivity with energy producers in the Gulf and Middle East, as well as markets in the West. The good news is that Pakistani businesses still prefer the allure of technology transfer and innovation offered by U.S. companies while at the same time Pakistanis prefer Chinese investments and deals as more sincere than any US commitment.

At the same time, macroeconomic and structural reforms over the last several governments have narrowed the budget deficit and raised GDP growth to a stable 4.5 percent despite large energy deficits, and built foreign reserves up to over $17 billion. Low oil prices and the $14 billion in annual remittances the country receives from its 6 million-strong diaspora have also helped. There has been substantial progress in reducing poverty, which has fallen to 13.6 percent in 2011 from 35 percent in 2002; in rural areas, poverty has dropped from 40 to 15 percent during the same period. In May, Standard and Poor upgraded Pakistan’s credit rating from stable to positive.

 Pakistan is the world’s 26th largest economy in terms of purchasing power parity. Its national economic growth plan, Vision2025, aims much higher. With 90 percent of the country employed through SMEs, Pakistan has one of the most developed entrepreneurial capability in the world. Complete foreign equity is permitted in the infrastructure and manufacturing sectors, helping to drive FDI to $1.45 billion in 2013, a 76 percent increase over the previous year but still far too small for such a big country.

As Pakistan gradually improves on a number of fronts, so should its relationship with the United States.

Clearly, Pakistan wants more than just traditional foreign aid. During my visit, a prominent Pakistani intellectual and influencer told me that “if the United States isn’t going to build stuff, then it shouldn’t don’t bother.” Given the smaller budget envelope for U.S. infrastructure projects (the largest infrastructure project built by the United States in the last decade is the new U.S. embassy), assistance should be geared towards facilitating infrastructure investment particularly in the water and energy sectors.

Specifically, the United States should encourage regulatory and policy reform and encourage greater US investment using specialized agencies including Overseas Private Investment Corporation, the U.S. Trade Development Authority and USAID’s Development Credit Authority.  Negotiations for a U.S.-Pakistan Bilateral Investment Treaty (BIT) have stalled due to reservations on both sides, but a successfully concluded BIT would be a strong signal of certainty and stability for US based investors interested in deeper engagement in Pakistan. This might be a good topic for discussion when Prime Minister Sharif visits DC in October.

A high level Pakistani official told me of their need for at least Pakistani 10,000 PhDs from the US in the near future. The United States should find more ways to increase educational opportunities for Pakistani students especially in critical areas such as urban planning, public administration, agriculture, and STEM.

Currently, the U.S. relationship with the country has been limited to a risk mitigation paradigm. However, the changes outlined above warrant a reframing of the way countries such as the United States engage with Pakistan’s government and especially its private sector. Pakistan is on a hopeful path and with the right mix of assistance and private investment; the United States can participate in Pakistan’s upside and remain a strategic partner.