ISLAMABAD: Pakistan has finally paid an amount of $93.5 million to Russia to settle the longstanding trade dispute, which had disturbed trade ties between the two countries for four decades.
The dispute resolution was likely to help improve trade ties between Pakistan and Russia, an official of the Ministry of Commerce (MoC) said on Tuesday.
According to Additional Secretary MoC Javed Akbar, the payment of $93.5 million against the Russian exporters’ claims pending since the disintegration of the Soviet Union would now pave the way for billions of dollars investments by Russian investors in Pakistan.
He said the dispute, among other impediments, was the major hurdle in boosting trade ties with Russia, adding Russian investors were now taking interest in various sectors in Pakistan.
Earlier last year, the government had authorised its Ambassador to Russia to sign the deal. Under the agreement, the Pakistani government was bound to return $93.5 million to Russia within 90 days of the signing and clear pending exporters’ claims to the tune of $23.8 million as per the settlement agreements reached on October 6, 2016 and December 27, 2017.
The efforts to sign the deal with Russia were initiated by the previous government of PML-N and were materialised by the incumbent regime.
Moscow had earlier conveyed to Islamabad that it would invest $8 billion in Pakistan’s energy sector and the Pakistan Steel Mills. But according to the Russian laws, the country cannot invest in countries with which it has disputes.
The deal will now enable Russia to invest in different sectors in Pakistan.
During the 3rd Pakistan-Russia Inter-Governmental Commission meeting held in Moscow from November 28-30 in 2015, both sides had initiated an agreement between the two governments, wherein Islamabad agreed to return $93.5 million within 90 days of the signing of the agreement.