America’s Limits, Iran’s Leverage, Pakistan’s Moment: Maleeha Lodhi on a Shifting Order

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1:40Certainly the Middle East has changed forever. We are looking at a very different world, not just because of the war, but because the war has reinforced certain trends that were already in play. Malihal Lodhi, who's been one of Pakistan's top diplomats, on power shifts and the role her country's playing. It shows the advent and the importance of middle powers that are now able to shape geopolitics. So Pakistan, by playing this role of mediation, has established itself as a middle power which has the capacity to influence, if not shape, international politics.

2:27From Bloomberg Weekend, this is the Michelle Hussain Show. I'm Michelle Hussain.

2:40After nearly six weeks of war, these last few days have brought a moment of pivot, or at least a potential one, as the United States and Iran agreed to talk. The diplomacy that made it possible was not led by one of the big powers or the UN or Oman, which mediated before, but by Pakistan. How and why did that happen? What's the background to the Islamabad summit? And is there a reshaping of relationships underway that we should all pay attention to? As I thought about these questions in recent days, the person I wanted to hear answering them is a woman who was Pakistan's ambassador to Washington twice, and who also served her country as ambassador in London and at the UN.

3:35Before that, Malika Lodhi was a newspaper editor, and as it happens, I once interned for her way back as my very first taste of journalism. At that time, I would barely have had the courage to speak directly to her. She was not Anna Wintour, but she was exacting. In this conversation, you'll hear her look beyond this crisis and beyond the Middle East and South Asia with observations on the United States and also on where she differs with her own country's leadership. Our starting point was how Pakistan's role as a peace broker came about. I think Pakistan's military and civilian leaders were both working the phones.

4:28Pakistan's army chief in particular was on the line to Washington at all times from what I hear, especially in the last couple of days just before the agreement was forged. And of course, Pakistan's prime minister was on the phone to the Iranian leadership constantly. And I think the main thing that I understood was they never really gave up, even when the situation looked very bleak, especially when President Trump began to say what he said. And I don't want to repeat all the things he said. But at that time, it wasn't clear whether, you know, that was just bluster or that was, statements that would so offend the Iranians that they would just call off everything.

5:13You mean the words about ending a civilization, this kind of rhetoric. And did you in that period also think, how is this going to bear fruit that this situation is so extreme? Well, yes, I think there was a point at which it seemed that even the progress that we were learning from Pakistani officials that was being made seemed to be in jeopardy. So I thought that, you know, when President Trump began to sound so frustrated and angry, actually, I thought this is it. And the U.S. will never agree to the terms that the Iranians conveyed at the end. You know, the famous 10 points, they're famous now because everybody knows about them.

5:57because, you know, initially the Americans rejected them and said we don't accept them. But then, as we've seen, both sides actually walked back from their maximalist positions. Iran did, and so did the U.S. And before we get to those points, I still want to explore the relationships that Pakistan has, both with the United States, which you've seen in your own career over multiple cycles, and with Iran. So first of all, on the U.S., is the key to this the personal relationship between Field Marshal Asim Muneer and President Trump? And how on earth was that bond formed? Well, very much so. I think this personal relationship between the two, which really came about very early in President Trump's second term.

6:45And it really started with the first sort of early win that in a way Pakistan handed to him when it arrested and then extradited the terrorist who was responsible for the bombing in Kabul during the American evacuation from Afghanistan. I mean, I think President Trump was so taken in by this gesture, by this action, that he chose to mention this in his first address to Congress. And then during the conflict between India and Pakistan, once that conflict was over and Trump played a role in defusing it, Pakistan, of course, you know, Pakistani leaders, I should say, you know, kept saying how grateful they were to President Trump.

7:31and then, of course, announcing a Nobel Peace Prize for him, which I personally was a critic of. I wrote against it, I tweeted against it, and I said, why are we giving a Nobel Peace Prize to a man who has not exactly been promoting peace around the world? But it seemed to do the trick. And Trump became even closer to the Pakistani leadership, particularly, of course, to Field Marshal Asim Mounir. That level of flattery, even obsequiousness, some would say, made many Pakistanis uncomfortable. Well, yes, absolutely. Because remember, President Trump, he'd attacked Iran along with Israel around that time, or a little later than that time.

8:14So clearly there was questioning about that decision. But I think beyond that announcement of the Nobel Peace Prize, there were also these sweetheart business deals that Pakistani leaders were offering Trump. And in addition to that, Pakistan's offer to open up the country for mining for critical minerals, which they knew was really very high up on Trump's agenda, given the fact that the U.S. had fallen behind China. So, I mean, I think if you put all of that together, that went into the relationship that, you know, then helped Pakistan emerge as the mediator. And let's talk about the other side of them, the relationship between Pakistan and Iran, which has also been complex at times, including relatively recently in 2024, when the two countries were striking each other towards Iran's east and Pakistan's west and saying that there were terrorist hideouts on each other's soil.

9:13Yes, Michelle, you're absolutely right. The relationship with Iran has been up and down for the last couple of decades, but also because of what you mentioned, the exchange of missile strikes with both countries accusing the other of giving a safe haven, albeit unintentionally, to militants that threatened their security. So it really was after these missile strikes, when the two countries decided to mend fences, that I think the new relationship began to take shape. And that's when we saw the two engaging very closely, visitors coming to Pakistan from Iran. And then I think even more significantly, the way Pakistan stood in solidarity with Iran last year when there was a joint Israeli-American attack.

10:07Actually, it was an Israeli attack, and then the Americans joined in the bombing, you would recall. At that time, Pakistan, I think amongst all the Muslim countries, was probably the most outspoken in expressing its solidarity with Iran, for which Iranian leaders were very, very publicly grateful. And then that was followed by a stream of Iranian visitors to Pakistan, including Mr. Larajani, who was, of course, later assassinated. He came to Pakistan. Others came to Pakistan. So you could see that the relationship was being strengthened by all these visits and interactions. And ultimately, I think the search for a mediator whom both countries could have confidence in, there really wasn't any other country.

10:51I mean, the Arab countries were ruled out. Oman had had their fingers burnt. So Oman couldn't re-emerge or didn't want to. And then there was only really Pakistan and Turkey left. And I think Pakistan, because of the personal factor, Turkey didn't enjoy that sort of closeness with the Trump administration that Phil Marshall Munir did. There's also been a bit of tightrope walking, hasn't there, for Pakistan in this period in that it, you know, condoled over the killing of the Supreme Leader and also said to Iran that its attacks on the Gulf were regrettable. I do also want to ask you about Pakistan's self-interest in this, because in this last month, how badly has the country been affected by the energy disruption?

11:42What have you seen play out around you in Islamabad? Look, this was very high stakes for Pakistan because of the economic pain that Pakistan had begun to feel already and could see that a protracted conflict would bring even more economic pain. So although Pakistan didn't get into rationing of oil, you didn't see queues at petrol pumps in the capital or elsewhere, but you did see the spike in the oil price. The government had to raise the price of oil. And of course, the government announced a series of austerity measures because it wanted to conserve fuel. Remember that Pakistan imports almost 90 % of its oil requirements from the Gulf countries.

12:26So again, if the conflict had prolonged the economic damage at a time, when Pakistan's economy in any case is very fragile, very weak, within an IMF program. I mean, it would have blown our economy, of course, if the war had continued. And schools have been closed. It has been too expensive for some people to get to work. So there have been all kinds of hardships of that kind, what it means for people's incomes. Let's talk then about this 10 or 15 point plan. Iran is going into these talks with very ambitious, some would say outlandish demands. And at the same time, President Trump is saying the military objectives have been met.

13:11Well, right now, both sides have a narrative which says that they've achieved their objectives, that they've been victorious. Both sides are saying that. But I think both sides know that their demands or conditions or terms for these negotiations are maximalist. So the question is, and I think it's hard to answer that question right now, is whether they can find sufficient common ground. Because, you know, Michelle, they did find common ground when Oman was mediating. As the Omanis foreign minister has said so many times, they were close to a deal at that time. And then suddenly, in the midst of negotiations, America decided to join Israel in attacking Iran.

13:54So that part perhaps can be sort of, in a way, you know, they can go back to that kind of an agreement. But the additionality is provided by the Strait of Hormuz, because that now becomes central to the negotiations. And there you can see the positions are very far apart. The Americans, I mean, President Trump keeps changing his mind every few hours. So if I say he said this last time, it may change in the next two days. I mean, I can't guarantee that. But, you know, he is saying he'd like to work with Iran to regulate or operate the Strait of Hormuz. The Iranians are probably aghast at having to work with anybody, but they're prepared to work with Oman.

14:38But they're saying we're going to charge fees now. I mean, this has been a free ride and we're going to charge fees for whatever maritime traffic takes place through the strait. So I think, you know, again, maximalist positions, we don't know the kind of agreement they'll reach because this now will become very central to a comprehensive settlement. We don't know what kind of agreement they'll reach or its chances of being anything lasting. I mean, one thing, for example, where we know there's a difference is on Lebanon. Pakistan's Prime Minister Shabazz Sharif saying Lebanon, the Israeli war in Lebanon is part of this.

15:16And Israel saying very clearly that it is not. Well, I think the bigger question is whether Israel will sabotage the agreement, the ceasefire. So Lebanon is only part of it. I mean, the major part is it concerns the ceasefire between the United States and Iran. So if they were to sabotage it and play spoiler in that by continuing attacks on Iran and then sort of exposing Trump's inability, if he's unable, that is, or unwilling to constrain and restrain Israel, then we're looking at a very complex and challenging situation. So I think the key lies in Trump showing that he can restrain Netanyahu, he can control and contain Israel.

16:06That is the big sort of question, I think. And we don't have an answer to that yet. So even though there are many unknowns in this, what does your gut instinct tell you about the chances of this process in Islamabad leading to something that averts a return to war or even just bring some stability to the global economy? Well, I'd like to be optimistic. And my optimism, I think, rests on firm ground, because both sides know that there is more economic pain for everyone, including themselves, if there was a relapse into fighting. Both sides are in a position right now to sort of proclaim that we've achieved our objectives.

16:52They may not be able to do that if there is, again, a recurrence of war. So, you know, that provides a strong incentive to both sides to try to hammer out a deal. So, you know, I hope my optimism pays off in the sense that, you know, I hope they're able to arrive at a settlement. because they can't keep going to war every seven months. I mean, they can, but I think the costs are piling up, have been piling up. But also, Iran has really discovered its power, hasn't it? Perhaps it always knew that its power was there and it's everyone else who's discovered it. But that dimension, the Strait of Hormuz, this uniquely placed part of the world, appears to have been a dimension that the Americans did not foresee, did not think through at all.

17:42Yes, absolutely. I think the Americans made several miscalculations, and this was one of them. The other big miscalculation, as you know, was the thought that the Iranians would simply, you know, once their leaders had been decapitated or assassinated, that the Iranian regime would just collapse. Didn't happen. So, I mean, there were a series of miscalculations, including the fact that the Iranians would get so much leverage by controlling the Strait of Hormuz. So, you know, but ultimately and fundamentally, and I've written about this, the U.S. historically underestimates the power of nationalism.

18:20It's done that throughout history. Did that in Vietnam, did that in Afghanistan, did that in Iraq, and now did this in Iran. They really thought that by attacking Iran, the people of Iran, the dissidents, those who oppose the regime, will rise. You know, war has the opposite effect. People close ranks. They forget the internal differences. They come together because the strong force of nationalism is what motivates them to become a more unified nation. And that's exactly what happened. I mean, even in Afghanistan, I mean, Taliban weren't exactly the most popular people in that country. And yet, 20 years, they managed to, well, if not defeat the United States, but prevent them from winning.

19:07Is that what you hope that the United States learns this time? Because you've worked with successive American administrations. You were in the United States as Pakistan's ambassador when 9-11 took place, which meant that you were there when the Afghanistan engagement began and that drew Pakistan into the U.S. military and political orbit for many years. And you would also have seen the start of what became the buildup to war in Iraq. Yes, you're right. I was there in Washington And I remember the early days after 9-11. Of course, it was a tremendously horrific tragedy that befell America. No question about that.

19:44But what my country's officials privately told the Americans at that time in those early days was that don't go and occupy Afghanistan. We understand you want to take some kind of military action, but it should be, in the words of the then president, short and surgical. So he even said at that time, don't become an army of occupation. Why? Because, you know, we experience in this region and we know that people will resist an outsider. They will resist foreign occupation. And that's exactly what happened. Now, whether the U.S. learns this lesson, and it's such a paradox, because here is a country where I've spent many years as a diplomat, which really sort of takes pride in its own country, where people are sort of flag-waving, patriotic sort of, you know, much stories put on all of that.

20:37And yet they don't understand that other countries have people who are equally proud of their country and are nationalists. They want to protect their country.

21:27We'll see you next time. I do want to ask you to look a bit further and whether you think this moment will mark the start of a different world order where America has learned that it can start wars, but they can spin out of control and it can't control the economic fallout and where other regional dynamics and alliances shift as a result. I mean, I hope that the lesson learned would be that military supremacy doesn't achieve the outcome that is desired. I think the world, in any case, is moving towards a more multipolar world, if I can put it that way. And that U.S. dominance is fading, has been fading.

22:19I mean, the combined military might of the United States and Israel took on a country that was militarily much, much weaker, whose allies in the region had also been weakened. And yet that country resisted. Now, what does that say? What that says is that America's dominance and the error of Americans' dominance in the region is basically over. It also shows, I mean, in the case of my country and the role Pakistan played, it shows the advent and the importance of middle powers that are now able to shape geopolitics. So Pakistan, by playing this role of mediation, has established itself as a middle power, which has the capacity to influence, if not shape, international politics.

23:12Is a loser in that, though, perhaps democracy in Pakistan, in that the key player that we see in all of this is an unelected army officer. Welcome to Pakistan. That's where we've been for a lot of our history. And yes, I mean, we have in place a hybrid government, which means that power is shared between civilians and the military. And in this particular case, it was the military that was, you know, conducting much of the diplomacy. I mean, you can't say that the prime minister wasn't involved. Of course he was. So the civilians were also, of course, involved. But the driving force was the field marshal and the military.

23:54That's the nature of politics and government in Pakistan. When you say you believe the era of American dominance is over, just explain how you see that playing out in the Middle East, because President Trump is saying he thinks that this could be the golden age of the Middle East, and America has all these bases in the region. What happens, do you think, in the long run, or maybe even the medium term, to those bases in the Gulf? Look, I mean, when I say that the era of American dominance is over, I think they will be rethinking in the U.S. about, you know, what is the point of having thousands and thousands of U.S.

24:32troops based in the region when they can't, on their own, determine what happens in the region. They can't shape the Middle East the way they wanted to, even before. I mean, Iraq is something that you mentioned before. I mean, what did they do there? So, I mean, it's been a process. It's not as if this war has brought it about. A process was already underway that U.S. dominance over the work, actually, not just the region, was beginning to be replaced by the fact that power was being dispersed amongst many in different places. not just one country being able to, you know, get the outcomes that it wanted.

25:15It could only get the outcomes that it wanted in cooperation with other countries, something that President Trump clearly doesn't believe in. So he decided to act unilaterally. I mean, of course, he had a co-partner in Israel and never consulted his allies. So I think, you know, we are looking at a very different world, not just because of the war, but because the war has reinforced certain trends that were already in play. But if there is one winner in all of this, would you say it was China? And to what extent do you believe it has been involved in bringing this summit about? Well, I think, I mean, there are reports that the Chinese eventually persuaded Iran and they also played a role visibly communication with the United States.

26:01I have no idea about the veracity of these reports. But certainly when you say China is a beneficiary, yes, I think one could say that because what this entire episode has shown and highlighted is that America has an unstable leader who conducts unilateral policies and acts unilaterally. But China, on the other hand, is a force for stability in the world. And that's how they project themselves also. But it also happens to be true. I mean, more countries have trading agreements now with China. China is a bigger trading partner of most countries in the world. I mean, I say that absolutely. It's absolutely accurate.

26:42The EU's largest trading partner is China. Many Asian countries' largest trading partner is China. India's largest trading partner is not the United States. It's China. So what does that say? What it says is that China is a force for peace, cooperation and stability, whereas the U.S. is being run by a man who conducts himself in such a whimsical manner and who has disrupted so much in the world, global trade, and of course has been engaged in this war of choice. So the contrast is stunning. Paint a picture then of the Gulf and South Asia, say in three years time, I'm going to pick that time frame.

27:27Do you think it is going to be a more settled place or do you think what has been unleashed, this kind of instability is too immense for the situation to go back in the box it was in at the start of the year? Well, certainly the Middle East has changed forever. It will not be status quo ante at all. Things are not going to go back to what they were before, that's for sure. Now, what comes in its place, it depends on, I think, realignments that will take place, reassessments that many Gulf countries may have to carry out. I mean, what happened to them? Many of them are feeling abandoned by the United States.

28:08Many feel that this American security umbrella when the push came to shove, it was of no value to them because America didn't defend them. America defended Israel and Israel always has a priority over them. So, you know, a lot of the dynamics in the years to come will be shaped by these kinds of assessments and calculations. But certainly we're not going to be in for a period of immediate stability. I think that one can conclude. But it will be a period where the U.S. will increasingly withdraw, which is what Trump had said in the first place in his national security strategy. And then who fills that power vacuum will depend on the realignments that will take shape here.

28:55You talked about this being a moment for the middle powers. From the Indian perspective, the strategy has never been for Pakistan to be in that category of middle powers. Whereas actually in the last few weeks, we have seen Saudi Arabia working on this. We've seen Turkey working on this. And Pakistan's prime minister has thanked Qatar and Egypt as well. Where do you think this leaves India? I think right now on the wrong side of history. They just lined up with the wrong countries. They broke from their traditional position of support for the Palestinians. As I said, they lined up with Israel and supported Israel.