Pakistan has taken significant steps towards enhancing its trade with Russia, navigating through the complexities of international sanctions and financial mechanisms. A high-level committee, spearheaded by Minister for Planning, Development, and Special Initiatives Ahsan Iqbal, has been actively working on this front.
The committee, in its latest meeting on August 6, 2024, directed the State Bank of Pakistan (SBP) to engage with banks and leading exporters to devise a transaction settlement system that would facilitate trade with Russia. This initiative comes at a time when traditional financial routes are fraught with restrictions due to geopolitical tensions. The discussions are part of a broader strategy to reduce dependency on conventional currency transactions, exploring models like those of the BRICS New Development Bank for transaction settlements.
Prime Minister Shehbaz Sharif is set to convene a review meeting, emphasizing the need for each ministry to prepare detailed presentations on their strategies for engaging with Russia. This approach underscores the government’s commitment to a coordinated and informed approach in foreign economic relations.the SBP has been tasked with the critical role of innovating financial mechanisms. This includes exploring non-sanctioned methods for trade, which could involve barter systems or alternative currencies, reflecting Pakistan’s agility in adapting to global economic challenges.
The Ministry of Railways is exploring a feasibility study for a passenger travel route via Pakistan-Iran-Turkiye, potentially revolutionizing regional connectivity. This project also involves engaging with engineering universities to innovate solutions for multi-gauge rail systems, aiming at efficiency and cost-effectiveness.there’s a push for alignment between the Ministry of Water Resources and the Power Division to ensure that energy projects do not overlap, thereby streamlining resource allocation and project execution. the Ministry of Inter-Provincial Coordination is to consolidate efforts across provinces, ensuring a unified approach in presenting strategies to the Prime Minister, which is crucial for coherent policy implementation.
This strategic pivot towards Russia isn’t just about trade; it’s a reflection of Pakistan’s foreign policy recalibrating to the changing global landscape. With the U.S. withdrawal from Afghanistan and shifting alliances, Pakistan sees an opportunity to diversify its economic partnerships, especially with countries like Russia, which are pivotal in the energy sector.
