ISLAMBAD: Pakistan has decided to sign a deal with Russia to end a 39-year trade dispute, which Islamabad hopes will allow Moscow to invest over USD 8 billion in the cash-strapped country, according to a media report on Thursday.
The trade dispute, which goes back to the days of the Soviet Union, involves USD 117 million and many unsuccessful efforts have been made in the past to end the dispute.
According to a report in The Express Tribune, Pakistan will return USD 93.5 million to Russia within 90 days of the signing of the agreement and clear pending exporters' claims amounting up to USD 23.8 million as per the settlement agreements reached in 2016-17.
"The efforts to sign the deal with Russia were kicked off by the previous Pakistan Muslim League - Nawaz government and the incumbent regime of Prime Minister Imran Khan has decided to execute it. The Pakistan government has authorised its ambassador to Russia to sign the deal," the report said.
The trade dispute negatively affected the relations between Russia and Pakistan and it is hoped that the settlement would open doors for enhanced bilateral political, economic and diplomatic relations between the two countries.
The report said that Russia has conveyed to Pakistan that it would invest USD 8 billion in Pakistan's energy sector and the Pakistan Steel Mills. But according to Russian law, it cannot invest in countries with which it has disputes. The deal will enable Russia to invest in different sectors in Pakistan, officials told the newspaper.
According to the history of the case, the then Soviet Union used to buy textile and other materials from Pakistan in the 1980s. For this purpose the USSR opened two bank accounts in the National Bank of Pakistan (NBP), with funds getting deposited in the accounts by the Economic Affairs Division through State Bank of Pakistan.
After the disintegration of the Soviet Union, some exports payments were left unpaid and as the trade dispute got prolonged.
Pakistani companies got stay orders in the Sindh High Court, barring the NBP from transferring funds of Russian banks held in its two accounts since 1996. The Sindh High Court in its decision on October 4, 2019 allowed an application for the passing of a compromise deal as all the parties had reached a settlement agreement outside the court, the report said.
"The amount maintained in the two accounts with the NBP is sufficient pay off USD 93.5 million to Russia as well as clear the pending claims of exporters to the tune of USD 23.8 million," the report said.
Pakistan's relations with Russia have moved past the bitter Cold War hostilities in recent years. Islamabad has shown eagerness to build military-to-military level ties with Moscow. In July 2019, Gen Oleg Salyukov, the Commander-in-Chief of the Land Forces of Russia visited Pakistan.
In August 2018, Deputy Defence Minister of Russia Col Gen Alexander Fomin visited Pakistan to participate in the first Russia-Pakistan Joint Military Consultative Committee (JMCC) meeting on security and defense. Pakistan Army chief Gen Qamar Javed Bajwa visited Russia in April 2018.