Pakistan Reader# 528, 20 January 2023
On 19 January, Pakistan and Russia finalized consultations to enhance cooperation in areas of mutual interest. This decision was reached during the eighth meeting of the Inter-governmental Commission on Trade and Economic, Scientific and Technical Cooperation of Pakistan and Russia. During the meeting, they discussed ways of supplying oil and gas to Pakistan on a “long-term” basis and other matters related to improving bilateral economic and trade relations. They also finalized a draft protocol which would be agreed upon and signed at the meeting’s plenary session to be held on 21 January.
The Russian delegation is being led by Energy Minister Nikolay Shulginov. The delegation met with Pakistan’s energy ministers and other government officials. The delegation also met with Prime Minister Shehbaz Sharif in Lahore, where “views were exchanged on supplying oil and gas from Russia to Pakistan on a long-term basis.” Additionally, he received a message from President Vladimir Putin who views Pakistan as Russia’s key partner in South Asia and the Islamic world. Putin also expressed interest in deepening the bilateral relationship as well as increasing trade and investment between the two sides.
Russia-Pakistan: A growing relationship
Pakistan and Russia have been working towards strengthening their bilateral relations in the recent past. The areas of cooperation are not limited to the purchase of fuel from Russia, but also expand into areas of trade, investments and defence. The relationship consolidated further with then Prime Minister Imran Khan who visited Moscow in February 2021 making it the first bilateral visit by a Pakistani prime minister to Russia in nearly 23 years.
1. Cooperation on Energy
The recent delegation visit precedes Minister of State for Petroleum Musadik Malik's visit to following which he said that Russia had agreed to provide oil to Pakistan at discounted rates to meet Pakistan’s rising domestic and industrial energy demands. During the visit, Russia also confirmed the availability of 100,000 barrels per day of crude oil supply to Pakistan. The main area of cooperation on energy is the 1100km-long Pakistan Stream Gas Pipeline that is planned for transporting gas from Karachi to Kasur is the largest project between the two countries. This is a part of a Russian investment package worth USD14 billion (in Pakistan’s energy sector which was promised in 2019.
2. Cooperation in Defence
Pakistan has been keen on procuring new defence equipment from Russia without falling under any sanctions. Conversely, Russia has also found a significant market for defence cooperation and sales in South Asia, one of the locations being Pakistan. In this regard, intelligence sharing and cooperation in security-related matters have also been an area of discussion between Pakistan and Russia. The agreement related to the Mutual Protection of Classified Information, Intellectual Property Rights and Cooperation in the Field of Ensuring International Information Security have also been finalized.
3. Cooperation on Technology
Pakistan and Russia have also signed a letter of intent to enhance bilateral cooperation in the technology sector, foster business relations and increase exchanges between the scientific and technological institutions of the two countries. For this purpose, the Skolkovo Foundation, Russia’s principal agency for the development and commercialization of advanced technologies, and the Special Technology Zones Authority (STZA) of Pakistan will work together on these projects.
4. Cooperation on Economy
Pakistan and Russia are both looking at enhancing economic cooperation in sectors of IT, agriculture, power, petroleum, railways, water, and commerce. Until now, there has been minimal focus on these areas. In a deal signed in November 2022, Pakistan's finance ministry said that it approved the import of 450,000 tonnes of wheat from Russia ahead of the next crop season. Such deals are made in the light that in 2020, the bilateral trade volume reached a record high of USD 790 million, a 45 per cent increase from 2019.
Through these several initiatives, Pakistan and Russia have demonstrated strong political will and taken initiatives to enhance bilateral cooperation between the two countries. However, while these steps are being made it would take a while for Pakistan to become Russia’s key economic partner.
Claudia Chia, Zheng Haiqi, “Russia-Pakistan Economic Relations: Energy Partnership and the China Factor,” Institute of South Asian Studies, 6 October 2021
“PM Imran arrives in Moscow on two-day visit to advance gas pipeline project,” Dawn, 23 February 2022
“Energy cooperation in focus during PM Imran's meeting with Russian President Putin,” Dawn, 25 February 2022
“Pakistan, Russia ‘finalise consultations’ to boost cooperation in various sectors,” Dawn, 20 January 2023
“Putin views Pakistan as ‘key partner in South Asia’,” The Express Tribune, 20 January 2023