20 July 2024

Can Russia Help Cash-Strapped Pakistan?

Syed Basim Raza and Saleem Abbas

Pakistani Prime Minister Shehbaz Sharif attended the Shanghai Cooperation Organization’s recent summit in Astana on July 3-4, 2024. On the sidelines of the summit which gathered the SCO’s leaders, Sharif met multiple world leaders including China’s President Xi Jinping, Russian President Vladimir Putin, and Turkish President Recep Tayyip Erdoğan.

Sharif expressed his pleasure at meeting with Putin, congratulating him on his re-election as president for the fifth time. While recalling the 2022 Samarkand SCO summit, Shehbaz underscored the importance of bilateral trade and recalled the existence of a barter trade system between the two states from the 1950s to 1970s, when trade between Pakistan and Russia was at its height, spanning across multiple sectors such as leather, machinery, and more. During the meeting, Putin suggested an increase in crude oil supplies and cooperation in the agro-industrial sectors. Russia has actively supported Pakistan by supplying grains in the food sector, and other logistics to increase trade between the two countries. While keeping an eye on Pakistan’s struggling economy, Shehbaz reiterated the need for cooperation in the banking and financial sectors to revitalize trade via the barter system, thus supporting Pakistan’s crippling economy.

Pakistan has been facing a depreciation in economic growth for the last half a decade. Pakistan’s gross domestic product growth rate has undergone a rollercoaster in recent years: It was 2.50 percent in 2019, a decline of 3.65 from 2018; GDP contracted 1.27 percent in 2020, a decline of 3.77 from 2019; the GDP growth rate was 6.51 percent in 2021, an increase of 7.79 percent from 2020; and the GDP growth rate of Pakistan was 4.71 percent in 2022, a decline of 1.81 percent from 2021.

No comments: