Pak­istan and Rus­sian re­vival of ties

Enterprise - - Contents -

Ris­ing oil prices, in­creased for­eign in­vest­ment, higher do­mes­tic con­sump­tion and po­lit­i­cal sta­bil­ity have bol­stered the eco­nomic boom in Rus­sia, which is the fastest grow­ing econ­omy in the G8, av­er­ag­ing at 7 per­cent an­nu­ally, since 2003. Af­ter years of un­der­achieve­ment, Rus­sia has now emerged as the world’s lead­ing nat­u­ral gas ex­porter and the sec­ond largest oil pro­ducer af­ter Saudi Ara­bia.

Pak­istan has an im­por­tant place in Rus­sia’s for­eign pol­icy, be­ing one of the ma­jor South Asian coun­tries. Pak­istan’s for­eign pol­icy is now rightly grav­i­tat­ing to­wards Cen­tral Asia and buildup of re­la­tions with Rus­sia is ex­pected to pay rich div­i­dends.

Set­ting aside the legacy of the cold war era, last year Pres­i­dent Asif Ali Zar­dari made a state visit to Rus­sia – the first by any Pak­istani head of state in 37 years. As the key el­e­ment of the visit was the de­vel­op­ment of eco­nomic re­la­tions be­tween the two coun­tries, the Pres­i­dent largely fo­cused on en­cour­ag­ing Rus­sian in­vest­ment in Pak­istani in­fra­struc­ture projects.

Ad­dress­ing busi­ness magnates in St. Peters­burg - which was made a sis­ter city of Karachi to mark the visit - the Pres­i­dent ap­pealed for in­vest­ment in the steel in­dus­try, new oil and gas pipe­lines, rail­ways and electricity. “I can open doors for you and it is for the busi­ness­men to take ad­van­tage of closer busi­ness re­la­tions be­tween the two coun­tries,” he said. This as­serted the fact that the fu­ture pros­per­ity of the re­gion lay in en­ergy pipe­lines, rail­ways and other con­nec­tiv­ity projects.

The two sides had then expressed their keen in­ter­est in the im­ple­men­ta­tion of projects re­lated to trans­mis­sion of elec­tric power from Ta­jik­istan to Afghanistan and Pak­istan (KASA-1000) and build­ing of a gas pipe­line be­tween Turk­menistan, Pak­istan and In­dia via Afghanistan. The $ 7.5 bil­lion TAPI gas project could be­come a back­bone for Pak­istani in­dus­try and econ­omy. In the 70s Rus­sian as­sis­tance in build­ing the coun­try’s only steel mill proved to be a mile­stone in the eco­nomic re­la­tions be­tween the two coun­tries.

Rus­sia and Pak­istan have also signed four MoUs per­tain­ing to en­ergy, in­vest­ment, air ser­vices and agri­cul­tural co­op­er­a­tion. The MoU on co­op­er­a­tion in the key area of en­ergy pro­vides a roadmap to de­velop and op­er­ate the oil, gas and coal in­dus­try. Hy­dro power gen­er­a­tion is an­other area in which Pak­istan is seek­ing ex­per­tise from Rus­sia. The MoU on in­vest­ment fa­cil­i­tates the pri­vate sec­tors in both coun­tries to ben­e­fit from the po­ten­tial in trade among the re­gional coun­tries. This broad­en­ing of bi­lat­eral eco­nomic ac­tiv­i­ties has ex­tended the geo-po­lit­i­cal and geo-eco­nomic re­la­tion­ship be­tween Rus­sia and Pak­istan.

To make progress on the un­der­stand­ing reached be­tween the lead­er­ships of the two coun­tries in 2011, Pak­istan For­eign Min­is­ter Hina Rab­bani Khar vis­ited Rus­sia this year at the in­vi­ta­tion of her Rus­sian coun­ter­part Sergey Lavrov. Both coun­tries expressed their ac­knowl­edge­ment of the large po­ten­tial that ex­ists for en­hance­ment of bi­lat­eral co­op­er­a­tion, par­tic­u­larly in trade, in­vest­ment, en­ergy and agri­cul­ture.

They also expressed sat­is­fac­tion on the out­come of the meet­ing of the Joint Work­ing Group on En­ergy Co­op­er­a­tion held in Moscow last year. The two sides dis­cussed sev­eral con­crete pro­pos­als in­clud­ing oil ex­plo­ration, hy­dropower pro­duc­tion/dis­tri­bu­tion and coal-based power gen­er­a­tion projects. Ms. Khar wel­comed Rus­sia’s will­ing­ness to par­tic­i­pate in trans-re­gional en­ergy projects such as TAPI and CASA-1000. Pak­istan also wel­comed Rus­sian in­ter­est in coal ex­plo­ration in Thar. Sat­is­fac­tion was also expressed on the sub­stan­tial progress made to­wards fi­nal­iz­ing the pro­posed mem­o­ran­dum of un­der­stand­ing on Ex­pan­sion and Mod­ern­iza­tion of Pak­istan Steel Mills.

With fo­cus on in­ten­si­fy­ing in­ter-par­lia­men­tary ties, the Pak­istani for­eign min­is­ter ap­pre­ci­ated the re-es­tab­lish­ment of the Group of Friend­ship with Pak­istan by the Rus­sian State Duma and said that one of the ma­jor tasks was for­ward progress in the In­ter­gov­ern­men­tal Com­mis­sion on Trade and Eco­nomic, Sci­en­tific and Tech­ni­cal Co­op­er­a­tion.

It is clear that in­sti­tut­ing a high-level di­a­logue on strate­gic and po­lit­i­cal is­sues and build­ing a mech­a­nism for eco­nomic co­op­er­a­tion through in­creased mar­ket ac­cess to Pak­istani prod­ucts in Rus­sia and fur­ther build­ing co­op­er­a­tion in trade and en­ergy sec­tors will greatly ben­e­fit both coun­tries.

Hina Rab­bani Khar, For­eign Min­is­ter of Pak­istan with

her Rus­sian coun­ter­part Sergey Lavrov.

Pak­istan Pres­i­dent Asif Ali Zar­dari with Dmitry Medvedev,

Pres­i­dent of Rus­sia.

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