- By: Saif Ur Rehman
The 24th Summit of the Shanghai Cooperation Organization held in Astana, the capital of Kazakhstan, concluded with meaningful parleys and strategies among participant countries. Prime Minister Shehbaz Sharif exchanged political and economic ideas with counterparts and diplomats. Among all the aforementioned concerns, PM bilateral talks with Russian President Vladimir Putin are worth mentioning. Following bilateral communication stressed amplifying the trade sector by means of a barter system. PM also recalled how Pakistan and Russia used to have a bilateral trade and a barter system in the 1950s and 1960s. Considering the present economic woes of the country, the very factor seems to be the most pertinent takeaway from the summit. Not to mention the effects of the barter system on regional politics, the following domain could serve a large economic and geographical purpose.
Firstly, trading in goods is most likely to alleviate over-dependency on the dollar. Having said that the country’s foreign reserves stand at US $14.57 billion which is not enough to bear the import burden for an extended period. For a country scrambling to manage a payment crisis, the decision seems to be very meticulous in economic revival. Not only Pakistan and Russia but also the other regions in Asia confronting Western sanctions can leverage the opportunity. It would not be out of place to mention here that it is nothing else but the trading in goods and local currency that is nurturing the strong basis of the Russian economy. The global trend of de-dollarization, where countries seek to reduce their reliance on the US dollar in international trade, is gaining momentum. Engaging in a barter system with Russia aligns well with this global shift and could potentially insulate Pakistan from the volatility of currency exchange rates.
Secondly, Russia is the largest country by area spanning across Eastern Europe and North Asia. Enhancing trade communication would not only enrich Pakistan with economic benefits but would also lead the country towards the hot waters of Europe through the regional doorways of Russia. Consequently, Pakistan could demonstrate bilateral trade relations with other parts of Europe as well. This geographical connectivity could pave the way for the development of new trade routes and infrastructure projects, such as pipelines and railways, that could facilitate the movement of goods and energy resources between Asia and Europe. The Belt and Road Initiative (BRI), spearheaded by China, could also play a complementary role in this context, as both Pakistan and Russia are key partners in this grand economic corridor.
Thirdly, the mutual merchandising between the two would culminate reach of essential goods. Remarkably, Russia having the largest natural gas and 8th largest proven oil reserves in the world could significantly compensate Pakistan’s energy deficit. In return, Pakistan could add value by exporting articles of leather, cotton, optical instruments, and knitted apparel. Another key thing to remember is that Pakistan’s exports to Russia were US $88.29 million in 2023. The Pakistan Business Council’s study unleashes that Russia comes with diverse gateways for Pakistan to boost exports. This diversification of trade partners can help Pakistan reduce its economic vulnerabilities and create more resilient trade networks. Additionally, the transfer of technology and expertise in various sectors, including agriculture, defense, and manufacturing, could further strengthen the bilateral relationship and enhance Pakistan’s industrial capabilities.
Last but not least, demonstrating cordial relations with Russia could cast positive impressions considering the multipolar trend in global politics. States are delving into the intricacies of block networks necessitating multilateral cooperation. That said, joining a block led by Russia could enhance Pakistan’s strategic position in regional and international geopolitics, potentially increasing its influence. The cooperation between the two could lead to improved defense and security matters through joint exercises and procurement. Although the above-said project owns diverse opportunities, yet the path is designed by several confrontations. Western media and political systems might be offended by analyzing the surging power dynamics depicted by Russia-Pak strategic relations. Hence, evaluating the stake factor Pakistan should take the Western states in confidence by forecasting or presenting vivid feature plans and the nature of the trade relations. As Pakistan enjoys equally healthy relations with Western countries and also its foreign policy largely relies upon Western ties, any careless move hurting diplomatic relations must be avoided.
In conclusion, the revival of a barter trade system between Pakistan and Russia holds significant promise for both nations. By leveraging their respective strengths and resources, Pakistan and Russia can build a mutually beneficial economic partnership that transcends traditional trade barriers. The potential benefits extend beyond economic gains to include strategic geopolitical advantages and enhanced regional connectivity. However, careful navigation of international diplomatic waters is essential to ensure that this promising initiative does not inadvertently strain Pakistan’s relations with its Western allies. With thoughtful planning and strategic foresight, the barter trade system could become a cornerstone of Pakistan’s economic revival and a testament to the power of innovative trade solutions in a complex global landscape.
- The writer is an independent analyst and student at University of Education.
- cspsaif@hotmail.com