Pakistan is planning a strategic road map to enhance its engagement with Russia, focusing on railway connectivity and secure trade routes to bypass potential US sanctions.
As per a news report, the government is developing a three-pronged strategy involving government-to-government (G2G) projects, business-to-business (B2B) cooperation, and mechanisms for safe trade and business operations. The Ministry of Foreign Affairs has endorsed this proposal.
During a recent meeting at the Planning Commission, officials discussed strategies for a high-powered delegation’s upcoming visit to Russia. The railways secretary outlined three key rail routes to connect with Russia and Central Asian states:
- Upgrading the Quetta-Taftan rail network, with an MoU signed in June 2024 and a bilateral meeting expected soon to implement the agreement.
- Connecting the Kohat-Kharlachi rail network with Central Asian Republics through Afghanistan after a feasibility study.
- Establishing the Minelik Express to link Reko Diq with Gwadar, facilitating access to markets in Azerbaijan and Russia and reducing transportation costs.
However, the State Bank of Pakistan (SBP) has warned of potential challenges in dealing with sanctioned Russian entities but noted that countries like Turkey are conducting transactions with Russia in local currencies.
Minister for National Food Security and Research and Industries and Production supported a proposal for comprehensive plans to negotiate with Russia. They sought the SBP’s guidance on trading and business with Russia. The central bank clarified that transactions not involving sanctioned entities would be permissible, though banks would remain cautious due to sanctions and FATF compliance concerns.
Planning Minister Ahsan Iqbal emphasised opportunities to enhance exports to Russia and inquired about trade practices followed by Turkey, the BRICS bloc, and other countries in dealings with Russia. The SBP suggested exploring a barter trade mechanism to boost ties with Moscow.
The Ministry of Foreign Affairs recommended aligning the delegation’s visit to Russia with the upcoming Inter-Governmental Commission meeting in September 2024.
