The first-ever Russian-Pakistani trade and investment forum was held in Moscow last week, the highlight of which was a barter agreement being reached for Russia to swap chickpeas and lentils with Pakistan for tangerines and rice. Privatization Minister Abdul Aleem Khan expressed hope that his country’s exports to Russia can grow to $4 billion in the next five years after both sides discussed business visas, transport and logistic problems, banking channels, and alternative payment forms during the forum.
The participation of over 100 Russian companies and 70 Pakistani businesspeople shows how seriously both sides treated this historic event. Khan also met with Deputy Prime Minister Alexei Overchuk, who had just visited Pakistan last month during a trip that drew attention to the increasingly strategic dimension of their relations. They importantly discussed the role of the North-South Transport Corridor (NSTC) via Iran for facilitating bilateral trade during their latest talks in Moscow.
These are promising developments, but serious problems still exist, first and foremost the natural limits of barter trade between them. There’s only so much that they can realistically swap with one another, plus each still has to pay logistics costs for traversing the NSTC or conducting trade by sea. The only reason why they’re bartering is because Pakistan lacks the reserves required to comfortably make more purchases from Russia. It’s also scared of US secondary sanctions if it’s caught using dollars in their trade.
Another point is that Russia isn’t interested in stockpiling Pakistani rupees unless it’s provided with preferential investment opportunities in the energy, industrial, or mining sectors to profit from this otherwise largely illiquid currency. They might have discussed such possibilities during the forum, but the fact that its top takeaway was an agricultural barter agreement and nothing more suggests that they’re still far away from reaching any deal on much more strategic investments of the kind mentioned.
That’s not to say that the forum was a failure though. It’s always beneficial whenever businesspeople from different countries, especially former rivals like Russia and Pakistan, meet to discuss ways to fulfill their mutual desire to ramp up trade and investment. Their business cultures, economies, and legal systems are so different though that only a large-scale event of this sort attended by prominent Russian companies and Pakistani businesspeople together with each side’s officials could help make that happen.
The purpose wasn’t to reach deals then and there, but to prospect business opportunities and then rely to the expertise available at the event to learn more about how any potential agreements would work if they were reached. There’s so much for each side to still learn from the other that it took over 15 months since Pakistan’s decision in June 2023 to allow barter trade with Russia for last week’s largely symbolic proof-of-concept deal to be reached.
Therefore, it’ll take time to reap the fruits of the first-ever Russian-Pakistani trade and investment forum, and it’s highly unlikely that Pakistan will fulfill Khan’s goal of exporting $4 billion worth of products to Russia by 2030 when the bulk of their $1 billion bilateral trade is Russian wheat exports to his country. Nevertheless, any tangible progress on this would still be mutually beneficial, and Russia will certainly appreciate the gesture of Pakistan doing its best to increase their trade in defiance of American pressure.
