Growing Pakistan-Russia Relations: Future of Economic & Strategic Cooperation

Prime Minister Imran Khan’s upcoming visit to Moscow is an indication of Russia’s long-term commitment to include the whole of Asia among its top foreign policy priorities. Despite negative propaganda by some media outlets, Russia has always stayed modern and effective in its approach to maintaining an independent foreign and defence policy, thereby asserting its role as one of the most important global players, writes Muhammad Athar Javed, Director General of Pakistan House, an Islamabad-based Think Tank of International Affairs.

While speaking at the plenary session of the 18th annual meeting of the Valdai Discussion Club in Sochi (Oct. 18-22, 2021), President Vladimir Putin, replying to a question posed by the author of this report, said that “Afghanistan is aspiring to be a modern state. And it seems to me that Pakistan plays a no-less important part in this than Russia or China. This is why we are interested in promoting cooperation, including with [Pakistan], to achieve a common, desirable result.” President Putin has clearly stated that the “common goal” of establishing peace in Afghanistan is important, and Russia has been helping to craft both a regional and a global drive to support a peaceful and justifiable solution in war-torn Afghanistan.

It is in connection with this that Pakistan has positively reciprocated with a similar diplomatic response, to enhance economic and strategic relations with the Russian Federation. Kremlin Press Secretary Dmitry Peskov announced Pakistani Prime Minister Imran Khan’s maiden visit to Russia on February 23-24, the first such trip by a Pakistani prime minister in 23 years. A visit from President Putin is also expected in this year which will be instrumental in improving economic and strategic relations between the two nations. It is a fair assessment that Pakistan-Russia strategic relations will mature with time, but Pakistan is a very important country in the emerging geopolitical chessboard in Eurasia. Pakistan leverages its geophysical location and strong military with a rapid progress in the fields of IT and infrastructure building. Pakistan holds considerable influence in the Islamic world, as well as in South-East Asia.

Economics & Trade

Russia is widely referred to as an “energy superpower” and is the world’s leading natural gas exporter and second-largest oil exporter. Russia, like any other oil/gas producer, needs to find new markets for its energy products. Pakistan is facing a gas shortage, and has already established itself as a viable energy consumer. According to reports, Pakistan has a gas shortfall of 1.5 billion cubic feet per day, which is expected to double by 2025. Authorities have estimated that domestic gas supplies will drop from 3.51 bcfd in 2019 to 1.67 bcfd in 2028, necessitating an increase in LNG imports to meet demand. The country began importing LNG in 2015 to mitigate a growth in consumption and to reduce oil imports. It is also reported that over a mere six years, Islamabad has become the world’s ninth-largest LNG importer. Qatar is presently Pakistan’s biggest gas supplier, and the latter is still looking for more energy partners to cooperate with. In June 2021, Pakistan secured US$4.5 billion (S$ 6.12 billion) worth of financing from the Islamic Trade Finance Corporation to cover the cost of importing crude, petroleum and LNG.

With the signing of a “shareholders’ agreement” in July 2021, Russia and Pakistan have outlined the roadmap for future cooperation, including the construction of a US$2.5 billion (S$3.4 billion) natural gas pipeline in Pakistan. This project is a part of a Russian investment package worth of US$14 billion (S$18.7 billion) in Pakistan’s energy sector promised in 2019. Russia’s determination to establish long-term economic and trade relations with Pakistan demonstrates strong political decision making by President Putin and his team. Pakistan’s pursuit in energy and trade sectors remains the most crucial element as it is rapidly establishing its economic footprints in partnership with China’s Belt and Road Initiative. Russia’s strategic need to structure a balanced trajectory of relations with all its neighbours in Asia brings the two countries together.

Most importantly, Russia’s growing economic interests in Pakistan in the context of its wider eastward approach to Asia is the sign of paradigm shift, as Russia’s relations with the West have become more strained. The most sustainable approach then is that Pakistan-Russia economic and strategic relations should not be shadowed by the “Indian or any other factor” because relations between the nation-states will always carry a sense of responsibility toward future generations and the country’s national interest. This is also in line with India’s foreign policy contours, i.e. to maintain a strategic partnership with both the US and Russia and continue to develop “strategic interest-based cooperation”.

In several ways, President Putin’s strategic vision has discounted the possibility of establishing mutually exclusive relations with any country. Therefore, PM Imran Khan’s visit at this juncture is an indication of Russia’s long-term commitment to include the whole of Asia among its top foreign policy priorities. Ostensibly, despite negative propaganda by some media outlets, Russia has always stayed modern and effective in its approach to maintaining an independent foreign and defence policy, thereby asserting its role as one of the most important global players.

Defence & Security

Russia’s drive to project a sustainable defence mechanism, especially in partnership with the states of the region, demonstrates that a “unified stand” to protect collective national interests has become a strategic requirement. Against the backdrop of the Russia-NATO conflict over Ukraine, the risk of a limited war cannot be discounted. An ensuing analysis of previous conflicts establishes that a regional strategic response keeps foreign military alliances from intervening, thus averting a larger regional conflict. The balance of power and protection of national interests are two of the most important instruments of stability – which Russia has achieved during the past two decades.

For Pakistan, it is crucial to establish sustainable and comprehensive strategic relations with Russia. Since its independence, Pakistan has faced several security challenges and wars, but continues to remain part of the solution. For decades, instability in Afghanistan and uneasy relations with India have provided multiple opportunities to align Pakistan’s regional objectives with those of major powers such as China and Russia. The political settlement in Afghanistan is directly connected to the pace of economic development and the improvement of security. In this context, Afghan crisis needs a “comprehensive stability approach”, which includes China, Russia and other regional players. Let me quote President Putin, who touched on this during his interaction with the author: “There is no doubt that Russia is interested in Afghanistan at long last emerging from an unending, permanent civil war. The people of that long-suffering – without exaggeration – country must feel safe within their national borders and have a chance for development and prosperity. We will seek in every way to attain this goal.” 

It is simply a fair assessment that modern Russia is not only driven by economic progress and joint ventures, but also demonstrates concern regarding growing interventions in different parts of the world. The economic ties between Russia and Pakistan require a deeper economic connection, to obtain the rightful place in South Asia and beyond.

Notably, Pakistan and Russia have developed a “new” interest in serving mutual national objectives. Rostec is a state-controlled Russian company that became a stakeholder of the PakStream Gas Pipeline Project (PSGP). The 1,100 kilometre PSGP is scheduled to be complete in 2023 and will transport liquefied natural gas (LNG) from terminals in Karachi and Gwadar to Lahore. According to an agreement signed in July 2021, Moscow has given Islamabad a majority stake in the project (74 percent) and pledged to help Pakistan with expertise and funding. The PSGP is one of the largest Russian investments in Pakistan since the Soviet Union assisted in developing the Oil and Gas Development Company and Pakistan Steel Mills in the 1960s and 1970s.

To conclude, while Pakistan-Russia relations are progressing at their own pace, there is always a risk of “fake news” and the negative propaganda of a third party negatively impacting the decision-making process and significance of regional defence cooperation. This aspect of risk should be mitigated by continuing engagement policy and materializing desirable economic and strategic cooperation.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.