Russia-Ukraine war could derail Pakistan’s economy, devalue country’s currency

With the increase in global prices of oil and gas amid the Russia-Ukraine War, Pakistan could be adversely impacted leading to devaluation of the country’s currency, increasing current account deficit and spiking inflation, say experts. The economic sanctions imposed on Russia may also derail other initiatives underconsideration between Russia and Pakistan as part of ‘Cooperation Roadmap 2021-26’. This will affect delivery and maintenance of transport aircraft and helicopters,modernization and repair of Pakistan railways, construction including up-gradationof industrial facilities in metallurgy, chemical and pharma sectors and powerengineering.

It will also have a negative impact on the Pakistan army’s modernization plan fortanks and overhaul of the Pakistan Air Force’s IL-78 aircraft. Implementation ofUSD 2.5 billion Pakistan stream gas pipeline may also get delayed. On the other hand, experts also view that the ongoing Russia-Ukraine conflictwould provide Islamabad with an opportunity to enhance bilateral ties with Moscowby remaining neutral and finalizing its long-term agreements in LNG, LPG & crudeoil at competitive prices to fulfil its energy requirements.

Pakistan observers noted that Islamabad could exploit Russia’s edge in science &technology by seeking transfer of technology in the fields of science, space,medical and artificial intelligence. Pakistan could offer country-specific special zones to Russian investors forboosting investment and also seek the latter’s help to manufacture high-qualitysteel & high-quality containers in Pakistan. On February 24, Russia launched a special military operation in Ukraine after theDonetsk and Luhansk people’s republics requested help in ‘defending themselves’.

The Russian Defense Ministry said the special operation is targeting Ukrainianmilitary infrastructure only and the civilian population is not in danger.
The West however denies these claims by the Russians and in response, Westernnations have imposed comprehensive sanctions on Moscow. In addition, theyintroduced sanctions on Belarus for supporting Russia’s operation in Ukraine.

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