Russia has decided to invest $8 billion in Pakistan as both the countries finally agreed to settle a four-decade-old trade dispute, The Express Tribune reported.
According to reports, during the 1980s, some companies in the Union of Soviet Socialist Republics (USSR) were importing textile products from Pakistan. For facilitating the trade process, USSR had opened two bank accounts in the National Bank of Pakistan (NBP).
The Economic Affairs Division (EAD) deposited funds in these bank accounts through the State Bank of Pakistan (SBP). After the collapse of the USSR, numerous exporters didn’t get paid. The Pakistani companies claimed to have paid large sea freight fees for the unshipped goods.
The exporters and Pakistani companies had to move their dispute to the Sindh High Court (SHC) that later issued a stay order stopping NBP from transferring $104.93 million to Russian banks.
Since then, every effort to resolve the issue between the two countries was in vain.
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.
Chairman of Board of Investment negotiated a deal with the exporters in October 2016. However, the Pakistani companies never withdrew their petitions from the SHC. As a result, the agreement was never officially signed.
In 2017, the Pakistani companies reached an agreement with the government and withdrew their cases. This included Tabani Group, Mercury Group, ABS Group, Fateh Industries/Fateh Sports and Fateh Jeans.
On October 4, 2019, SHC dismissed the case as the involved parties reached an out of court agreement, paving way for the agreement to be officially signed.
Pakistan’s ambassador to Russia will now sign the agreement on behalf of Islamabad. 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.
After this 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.
