Pakistan and Russian revival of ties
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.