Pakistan can become Ukraine’s gateway to the Southern and Central Asian markets, believes Volodymyr Reznichenko, the Ukrainian Minister of Foreign Affairs diplomat responsible for Ukraine’s relations with Pakistan.
While the two countries have always enjoyed cordial relations, trade has been meager and foreign direct investment nonexistent.
The Ukrainian and Pakistani foreign ministries have developed a plan to change this.
In a phone call on Aug. 10, Foreign Minister Dmytro Kuleba and his Pakistani counterpart Shah Mahmood Qureshi agreed to revive a long-dormant joint Ukrainian-Pakistani Economic Cooperation Council, the first meeting of which is planned in the coming months.
Oleg Urusky, the minister for strategic industries, will head the Ukrainian team.
Turning east
In the past year, the Ministry of Foreign Affairs has dramatically increased its promotion of diplomatic and economic cooperation with Asian nations. Pakistan is one of the priorities.
Although the initial plans for such a commission were signed in 2012, they lay dormant until 2018, when the first steps were taken to revive them.
Progress was delayed by the Kerch Strait incident in November 2018, when Russia illegally seized three Ukrainian patrol boats and kidnapped their crews off the coast of Crimea, but the Ministry pushed on with the project regardless.
“In 2019, objective realities forced us to diversify our positions in the world,” says Reznichenko.
Although the COVID-19 pandemic extended the delay, the commission’s first meeting is finally coming up. Reznichenko expects it to be held in the final months of this year or the beginning of the next one.
This spring, the Ukrainian Embassy in Pakistan hosted a delegation of over 20 Ukrainian businesspeople, who wanted to explore investment opportunities in the world’s fifth most populous country.
In October, representatives from Pakistani chambers of commerce will come to Ukraine for a reciprocal visit.
According to Reznichenko, the Ukrainian delegation was made up mostly of textile and clothing manufacturers: textiles and fabrics made up over 60% of Ukraine’s imports from Pakistan in 2020.
Diversifying trade links
Trade between Ukraine and Pakistan has typically been dominated by the military-industrial sector –roughly $1.6 billion since 1996.
Pakistan has held military exercises with Russia since 2016, but this has not stopped them from signing two contracts for tank and aircraft maintenance with Ukrainian companies in 2021.
While Ukraine’s foreign minister is eager to maintain and expand this profitable line of business, Reznichenko says that diversification is important too.
Ukraine’s exports to Pakistan shot up in 2020, driven almost entirely by sales of Ukrainian grain. This unusual spike in trade was caused by a combination of a bad harvest in Pakistan and pandemic-related global supply line failures.
Ukraine covered 75% of Pakistan’s grain deficit in 2020, which Reznichenko says made Ukraine the “guarantor of Pakistan’s food security.”
However, he insists that there are also plenty of other sectors ripe for growth: Ukrainian engineering expertise in railways, mining, water grids, and power stations is very attractive to Pakistani investors.
“It could be construction, engineering services, sales of building materials and machinery, or consultations from our experts,” he said.
“Increased cooperation in these fields could be a pre-condition for our relations with Pakistan reaching a whole new level.”
Moreover, Pakistan wants wider input from Ukrainian agriculture than simply buying crops: the populous Asian nation could benefit greatly from purchases of Ukrainian fertilizer and grain elevators to modernise its own farms, which need to feed a population of 225 million.
Ultimately for Reznikov, the upside of deepening cooperation with Pakistan is that there are no significant geopolitical issues dividing the two countries.
“We don’t have any problematic areas with Pakistan.”
