For the first time in history, Russia to invest $8 billions in Pakistan: Report

For the first time in history, Russia to invest $8 billions in Pakistan: Report

ISLAMABAD - Pakistan and Russia have finally agreed to settle a 4-decade old trade dispute, with the latter agreeing to invest $8 billion.

During the ’80s, some companies in USSR were importing textile products from Pakistan. For facilitating the trade process, USSR 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 Sindh High Court (SHC). SHC issued a stay order which stopped 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 Sindh High Court. As a result, the agreement was never officially signed.

In 2017, the Pakistani companies 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.

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.

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.

Via: *The Express Tribune* link