A report published in the American magazine The National Interest has argued that Pakistan should be made to bear significantly greater costs for allowing terrorism to persist on its soil, framing Islamabad not as a country that can be purchased outright but one that is, in effect, available for rent — a distinction it says Washington has repeatedly failed to grasp.

The 'For Rent' Framing

The report contends that the United States has long operated under the flawed assumption that financial inducements could secure Pakistan's strategic loyalty. In reality, it argues, Islamabad pursues a deliberate hedging strategy — maximising its value to multiple powers simultaneously rather than aligning exclusively with any one.

'The US-Iran conflict illustrated this dynamic. Trusted by both Tehran and Washington, Islamabad helped broker the ceasefire that briefly reopened the Strait of Hormuz. Traditional treaty allies such as France, Germany, and the United Kingdom could not have played that role. A hedging power could,' the report noted.

Pakistan's Balancing Act: Arms Deals and Diplomatic Leverage

The report cited a June 2025 agreement between Pakistan and Azerbaijan worth up to $4.6 billion, under which Islamabad is set to supply 40 JF-17 fighter jets to Baku. The transaction is notable for its layered geopolitical symbolism: the aircraft is built on a Chinese airframe, powered by a Russian engine, and sold by a nominal American ally to a country Washington is actively courting.

'Pakistan's strategy is to maximise its strategic value to both Washington and Beijing,' the report stated. It further noted that after helping facilitate talks during the Iran conflict, Islamabad reportedly sought a $10 billion exchange-stabilisation facility from Washington to shore up its foreign-exchange reserves — again converting geopolitical relevance into economic support without relinquishing its ties with China.

Where US Leverage Still Holds

The report identified Pakistan's longstanding dependence on international financial institutions — including the IMF and the World Bank — as an area where American influence remains decisive. It argued that Beijing, with its higher-interest bilateral loans and reluctance to directly finance the Pakistani state, cannot readily substitute for that role.

On the China-Pakistan Economic Corridor (CPEC), the report described demands for Pakistan's withdrawal as a 'non-starter', noting that a country pursuing a hedging strategy is unlikely to accept ultimatums that force it to choose sides. Instead, it recommended that Washington assess Pakistan not by whether it scales back ties with China, but by whether it prevents Beijing from gaining a monopoly over those ties.

Making Terrorism Too Costly

The report's sharpest recommendation concerned terrorism. It argued that the US should engineer conditions under which Pakistan itself perceives the continuation of terrorism as a threat to its own interests. 'Terrorism should become too costly — not because America threatens punishment, but because it would destroy opportunities Pakistan itself values. The goal is to create so much to lose that terrorism spoils it all,' the report stated.

This framing marks a strategic shift: rather than punitive coercion, the report advocates structuring Pakistan's incentive environment so that tolerating militant networks becomes self-defeating.

The Recommended US Approach

Summarising its recommendations, the report argued that if Washington is 'generous with prestige, pragmatic on conditionality, and focused on military and economic cooperation,' it can convert Pakistan's hedging strategy into an American advantage. It described Pakistan as potentially the cheapest 'strategic asset' Washington can afford — provided it deploys its remaining leverage more intelligently than it has in the past.