There’s no denying that the on-going Russia-Ukraine war has hit the economies of developed and developing countries. The recent G-7 and Bircs summits promised to give maximum relief to the masses and control inflation.
After the pandemic the economies of Europe, United States, Britiain, Japan and China geared up substantially and boosted the developing economies significantly. But the Russia-Ukraine war paved the way for economic distabalization in the world.
Some analysts expected complete submission of the US and NATO in the region after the Russia-Ukraine fighting. They also hoped a new regional block, consisting of Pakistan, Russia, China, Turkey and Afghanistan, would take shape. But they have been proven wrong on both counts.
The Russia-Pakistan ties are in the initial stages. The chances of import of low price fuel to Pakistan from Russia are low. Russia is not in a position to offer any kind of financial assistance or fuel concessions to Pakistan. India on the other hand, is still getting oil and weapons from Russia. Undoubtedly, India is a strong ally of the US and Europe against China.
At the G7 summit last month at the luxury German hotel, leaders hoped to demonstrate resolve, unity and practicality to weaken the “Russian president’s war machine”. The price cap on oil and gas remained the sticking points.
But, for Indian Prime Minister Narendra Modi, who attended the summits in June, trade with Russia remains a political balance act. For before the invasion of Ukraine, India’s imports of Russian oil were negligible due to high freight costs. Recently, imports of Russian oil to India have increased. India’s Nayara Agency’s Vadinar, an oil refinery in Gujarat, purchased Russian oil in March 2022 – “just before international restrictions on its exports were introduced – after a gap of a year, buying about 1.8m barrels from Trafigura,” Reuters reported.
The chances of import of low price fuel to Pakistan from Russia are low. Russia is not in a position to offer any kind of financial assistance or fuel concessions to Pakistan. India on the other hand, is still getting oil and weapons from Russia.
Writing for The Guardian, Alex Lawson, said, “The volumes that India has been buying and exporting, however, suggest that some of the refined Russian crude may ultimately be used in Europe’s filling stations” – for it is not clear where the Russian crude brought by India will be used.
In the recent G-7 meeting it was also decided to pay sixty million dollars to the developing countries under “build a better world project” to counter China’s one belt project which presents a soft image of China in the world.
Given the political, economic and strategic challenges facing Pakistan, it should immediately reviews its foreign policy choices. Since the invasion of Ukraine, the world is in turmoil. Turkey has reviewed its foreign policy options and normalized relations with the United States, Saudia Arabia and even Israel. The recent price hikes in fuel and energy directly affected the import bills of the developing countries. The affects of these economic after shocks can be seen in Sri Lanka.
The developing countries want more relief in their loans but due to high interest rates further delays in the payment of loans will affect their long-term economic policies. The recent economic assistance to Pakistan by China, Saudia Arabia and IMF will help Pakistan to sustain for a short term. However, for Pakistan, only economic stability will lead to political stability and independent foreign policy. Further loans from the IMF for subsidy will not serve the long-term economic interests of the country.