So Pakistan and Russia have finally got on terms to settle a 4-decade old trade dispute, with Russia agreeing to invest $8 billion in Pakistan. So a brief history of the downfall of the relations is that in the ’80s, some companies in USSR were reportedly importing textile products from Pakistan. Now in order to facilitate this trade process the USSR opened two bank accounts in the National Bank of Pakistan (NBP).
Moreover,the Economic Affairs Division (EAD) deposited funds in these bank accounts via the State Bank of Pakistan (SBP). However,following the collapse of the USSR, many exporters were not paid. Pakistani companies claimed to have paid large sea freight fees for the unshipped goods and this in turn had caused loss. In turn the exporters and Pakistani companies had to move their dispute to the Sindh High Court (SHC). In later times the SHC issued a stay order which stopped NBP from transferring $104.93 million to Russian banks. This in turn led to a downfall of relations between the two sides and pretty much every effort to resolve the issue between the two countries was hopeless, until now that is.
Must Read: Report: FBR taking a dig in to Muhammad Hafeez hidden assets
Moving on, in November 2015, both countries initiated a dialogue at the 3rd Pakistan-Russia Inter-Governmental Commission session. Both governments reached an agreement that Islamabad will return $93.5 million in 90 days after officially signing the agreement.In addition to things, the Chairman of Board of Investment negotiated a deal with the exporters in October 2016. However, the Pakistani companies never withdrew their petitions from the Sindh High Court. As a result, the agreement was never officially signed and hence there was no development in the relations.
Two years forward,in 2017, the Pakistani companies once again reached an agreement with the government and withdrew their cases from court. This included Tabani Group, Mercury Group, ABS Group, Fateh Industries/Fateh Sports and Fateh Jeans.On October 4th, 2019, Sindh High Court dismissed the case as the involved parties reached an out of court agreement, paving the way for the agreement to be officially signed and to move for fresh new relations between the two countries.
Pakistan’s ambassador to Russia will sign the agreement on the behalf of the Pakistani government.Under the agreement, Russia will get the pending $93.5 million within 90 days, while exporters and companies will receive $23.8 million as agreed. Following the agreement, Russia will go ahead with its plan of investing $8 billion in different energy projects and Pakistan Steel Mills. Russia was unable to invest in Pakistan during the dispute since Russian laws prohibit investment in countries with pending disputes.
