Russia and Pakistan - In your opinion, what opportunities and overlapping benefits...
0 comments | by admin on October 13 , 2017
There are several forms of economic cooperation that can be discussed – energy, investment, financial, and commercial. The first one was described in answering the third question, and it’s that Russia’s construction of the North-South gas pipeline opens up future opportunities for the country’s state-owned energy companies in Pakistan, potentially going as far as making Moscow an energy supplier to Islamabad via an overland trans-Chinese pipeline or LNG shipments. The North-South pipeline is a mighty investment in Pakistan, but it shouldn’t be the only one to mark the renewed relations between both sides. Russia and Pakistan should work together to brainstorm other spheres of investment cooperation between the two sides, potentially in the transport sector. However, Russia will likely be careful to not be seen as formally participating in CPEC because of the damage that this could have for Russian-Indian relations. Nevertheless, it can be argued that all investments in Pakistan at this moment in time are in one way or another linked to CPEC, so Russia might not be able to get around that perception and should in that case partially embrace it.
Financial cooperation between the two erstwhile rivals could see the form of energy-related loans associated with new projects, or the use of national currencies in bilateral trade and investment. Pakistan’s inclusion in the SCO gives Russia the chance to work more closely with its new South Asian partner as the reformed organization takes on more of a multilateral integrational role, including in the economic sector. The tentative SCO Bank could function as the platform for Russia and Pakistan’s larger financial interactions with one another, as could the progress being made on clinching a free trade agreement between the Russian-led EAU and Pakistan (or one day, even more broadly SAARC). From the reverse perspective, Russia could also use Pakistani investments to complement Moscow’s courting of non-Western economic partners during the ongoing sanctions war with the West. The specific areas of investment would have to be determined by relevant professionals and experts, but it’s conceivable that agriculture could be something that Pakistan might be interested in.
About real-sector commercial relations, these will be greatly augmented by the completion of CPEC and its branch expansions to Central Asia and Siberia. If timed to coincide with the blossoming of bilateral investments in one another’s economies, this could see a harmonious exchange of commercial products between the two, such as the Russian import of Pakistani textiles and/or the Pakistani import of Russian agricultural products. Like the last answer concluded, the convocation of a strong real-sector economic/commercial partnership between Russia and Pakistan would cement their bilateral relations and in turn further the development of political, military, and ultimately strategic ones as well, so this should be seen as the ultimate goal towards which both sides should aspire. It won’t happen right away, and there are certain structural and geographic limitations to its development, but it’s certainly not an impossible task, and the outcome would be tremendously positive for each of them.
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