The recent visit to Pakistan by the Russian defence minister, the first in four decades, has been hailed as a highly significant step forward for the country. Analysts see it as a right step in realigning Pakistan's foreign policy, starting with a military partnership, which eventually should lead to the broadening of economic and social ties.
Lately, Pakistan's nuclear arch-rival India has shown a marked tilt toward the United States in military trade and investment, making Pakistan uncomfortable. For decades the Soviet Union, and later Russia, provided up to 75% of India's military hardware needs. In the recent past, the United States has increased its military relationship with Delhi: last year India bought $1.9 billion worth of weapons to become the largest military hardware importer from the US.
He shift in relations with India is occurring as the United States exits Afghanistan and as the most important Afghanistan-Pakistan strategic ties, which began after the events of 9/11, are rapidly fraying.
The transition to the new era depends largely on the success of the unity government of President Ashraf Ghani and Chief Executive Officer Abdullah Abdullah, the runner-up in the presidential poll. It is hoped that they can reshape the country and provide more credible governance than the weak Karzai regime of the past. Abdullah appears interested in building relationships with all the important countries in the region, including Pakistan, India, China and Russia; he is also trying to make peace with the Taliban at home.
Nonetheless, the shift of American focus in the region from Pakistan to India is a wake-up call for Islamabad, which would do well to look east to diversify trade and investment. The efforts are visible on the economic front, as both public and private-sector players increasingly are eyeing China. The latter is committing to invest and lend between $35 billion and $45 billion in the next five to seven years.
Because China trails the other big powers in military technology, it makes sense for Pakistan to look to Russia for military imports. However, the purchase of twenty MI-35 helicopters from Russia is nothing to get excited about. There are two reasons for this: First, the purchase is being made in cash, and anyone will sell anything for cash; a government-to-government barter-trade deal might have been more significant. Second, the MI-35 helicopters are in no way close to the F-16 jets and other hardware that Pakistan received as part of US aid and trade packages back when Washington thought it could count on Pakistan to keep the Taliban at bay.
Interestingly, though, while Russian Defence Minister Sergei Shoigu was meeting Pakistan's political leadership and signing a new defence pact, Pakistan's army chief was in Washington. Gen Raheel Sharif was busy assuring the US leadership that Pakistan's military is not discriminating in its efforts to eradicate militants from the region. This is actually a good sign. Islamabad has been deliberating how to maintain its strategic position in fighting terrorism that is hurting both Pakistan and Afghanistan at a time when US and Nato forces are exiting. At the same time, it is diversifying relations by opening up ties with Russia.
Pakistan-Russia trade in fiscal 2014 ending June 30 amounted to $532 million, a figure that Islamabad feels is far below potential.
The effort to woo Moscow began under the previous government when Russian President Vladimir Putin was scheduled to visit Pakistan in 2012. However, the trip did not materialise and now the current government is trying to engage more with Russia on the economic front. One potentially groundbreaking deal almost came to pass in the Musharraf era, when a Russian company in 2006 led a consortium that offered to buy state-owned Pakistan Steel Mill (PSM). However, the Supreme Court sided with trade unionists and anti-privatisation campaigners in sidelining the deal.
PSM has deteriorated further in the last eight years and is a constant drain on taxpayers' money. It is pertinent to note that it was the Russians, prior to the Cold War, who helped to build PSM and Oil and Gas Development Company, which is also trying to raise fresh funds. Any rebuilding of the relationship should include an industrial partnership.
Additionally, Russia can provide assistance in resolving Pakistan's energy woes. The Prime Minister's Office has invited Russian companies to invest in the energy sector to take advantage of business-friendly policies. In addition to helping build energy infrastructure, Russia could also be approached about exporting gas to Pakistan.
Russia might welcome the opportunity for a new customer, at a time when events in Ukraine are prompting European countries to consider non-Russian sources of energy, and the US is expected to offer cheaper shale gas to EU countries. Russia may need to look southward and eastward for oil and gas buyers and Pakistan is in dire need of gas.