Pakistan PM’s Geo-Economic Priorities at SCO Summit
(Asghar Ali Mubarak)
With Pakistan PM at the center of attention at the Shanghai Cooperation Organization Summit, Shahbaz Sharif’s visit to Bishkek is not just a formal diplomatic visit, but a serious attempt to implement Pakistan’s geo-economic priorities. Pakistan has formally assumed the presidency of the Shanghai Cooperation Organization (SCO), and the next historic summit (Council of Heads of State) will be held in Islamabad in 2027. During this prestigious presidency, Pakistan’s central vision is to promote connectivity, digital innovation, and shared prosperity, with IT, artificial intelligence (AI), affordable energy transfer, and disaster management given priority. Another important feature of this period is that Lahore has been designated as the “Cultural and Tourism Capital” of the organization. The government has already started preparations for the infrastructure, eco-friendly transport, and foolproof security of the federal capital for this grand summit to be held in Islamabad. The possible arrival of the heads of state of China, Russia, Iran, and Central Asian states will not only enhance Pakistan’s global and regional diplomatic prestige. Still, it will also give a new and lasting boost to foreign investment and geo-economic ties in the country.
In the context of the current economic challenges, Pakistan’s strong stance on an influential forum like the SCO is crucial to support the country’s economy and increase its influence in the regional bloc. If these diplomatic efforts are accompanied by internal political and economic stability, Pakistan can emerge as a major hub for trade and energy transmission in the region. Shahbaz Sharif’s participation in the Shanghai Cooperation Organization (SCO) summit in Bishkek is a very important and multifaceted event in terms of regional diplomacy, economic cooperation, and protection of Pakistan’s strategic interests. This visit covers the importance of Pakistan and its impact on the regional and global scenario.
Pakistan’s Strategic Location;
The Shanghai Cooperation Organization is one of the world’s largest regional organizations, representing a large portion of the world’s population and a vast geographical area.
Central Powers: The organization includes global powers like China and Russia, as well as Central Asian states.
Role of Pakistan: Pakistan sees this forum as an important platform to expand its geographical and economic network.
Prime Minister Shehbaz Sharif presented Pakistan’s national and regional interests in a comprehensive manner during the Bishkek meeting. The salient points of his agenda were as follows:
- Promoting Economic Connectivity and Geo-Economics of CPEC:
Highlighting the importance of Phase-2 of the China-Pakistan Economic Corridor (CPEC) for sustainable development.
Access to Central Asia: Making Pakistan’s ports (Gwadar and Karachi) the shortest trade route for Central Asian landlocked countries. - Climate Change: Pakistan is responsible for less than 1% of global greenhouse gas emissions, but is the most vulnerable to climate damage. Call for global funding: Call for financial and technical cooperation from developed countries to deal with floods and other natural disasters.
- Joint commitment to eliminate terrorism and regional security:
Reaffirmation of Pakistan’s firm commitment to peace and security in the region under the Shanghai Cooperation Organization’s Counter-Terrorism Structure (RATS).
Situation in Afghanistan: Emphasis on the joint role of the international community for stability and economic recovery in neighboring Afghanistan. Side-line meetings and review of diplomatic achievements;
The most important feature of the summit was the bilateral (Side-line) meetings of Prime Minister Shehbaz Sharif with other world leaders.
Main agenda of the leader/country meeting: Expected outcomes;
Accelerating the pace of China-CPEC projects and new investments; further strengthening security and economic partnership; cooperation in the Russian energy sector and supply of cheap petroleum products; helping to overcome the energy crisis in Central Asian states; transit trade and road connectivity; access to new markets for Pakistani products,
Key benefits: Ending diplomatic isolation: Demonstrating Pakistan’s active diplomatic role at the global and regional levels.
Diversification in trade: New trade agreements with the Eurasian region by reducing dependence on traditional Western markets.Energy corridors: Opportunity to advance major regional projects such as the TAPI gas pipeline. Countering India’s presence and negative propaganda within the organization at the diplomatic level. Internal Security: Ensuring the safety of foreign investors (especially Chinese citizens) so that economic projects are not affected. The scenario of Pak-India diplomatic relations within the Shanghai Cooperation Organization (SCO) framework appears to be a mixed bag of traditional tensions and multilateral diplomatic constraints. After Pakistan assumes the presidency of the 2027 summit, there is little chance of any major magical change or thaw in diplomatic relations between the two countries; however, under the SCO protocol, Pakistan is obliged to send invitations to all member states, including India. The Indian Ministry of External Affairs has made it clear in this regard that they deal with the SCO as an institution rather than separate bilateral relations with Pakistan, and the decision on Pakistan’s participation will be taken by “appropriate authorities at the appropriate time”.This coldness was also clearly visible at the recent Bishkek meeting, where the Indian leadership adopted the strongest stance on eliminating terrorism and stopping its funding, while Pakistan, as always, rejected these allegations. Therefore, the likely scenario during the next summit in Islamabad will be that the two countries, leaving aside their mutual disputes (such as Kashmir and cross-border terrorism), will remain confined to the agenda of the regional relations, security and trade forum in the presence of China and Russia, due to which only “limited diplomatic handshakes” are expected without any major bilateral developments. Prime Minister Shehbaz Sharif’s meetings with the top leaders of China and Russia on the sidelines of the Shanghai Cooperation Organization (SCO) summit have led to progress on several important strategic and economic agreements. The details of these specific agreements and cooperation are divided into the following sections: Agreements with China and CPEC Phase-2. The main thrust of the agreements with China was to accelerate the pace of the second phase of CPEC and increase regional connectivity: During the summit and on its sidelines, Pakistan and China signed memorandums of understanding worth billions of dollars, aimed at modernizing infrastructure.
Inter To reduce international financial shocks and dependence on the dollar, the two countries agreed to move forward with the mechanism of transferring mutual trade and CPEC transactions to Chinese yuan and Pakistani rupees (local currencies).
Industrial relocation: A working plan was formulated to relocate textile, manufacturing, and IT sectors from China to Pakistan’s Special Economic Zones (SEZs).
Historic Trade and Transport Agreements with Russia Pakistan’s relations with Russia have undergone a major strategic shift in recent years, under which the following specific agreements are being implemented: A historic Memorandum of Understanding (MoU) has been signed between Pakistan and Russia for direct regional trade, under which the Pakistan-Russia freight train service is being launched, which will connect Pakistan to Russia via Iran, Turkmenistan, Azerbaijan and Kazakhstan. An agreement on technical cooperation to ensure continuous supply of crude oil from Russia at concessional rates and adapt Pakistani refineries to Russian oil has been advanced. Along with this, consultations were also held on the infrastructure for future gas supply through pipelines. Pakistan has agreed to progress regular negotiations for a Preferential Trade Agreement (PTA) with the Russian-led Eurasian Economic Union (EAEU) so that the volume of mutual trade can be brought to $1 billion as soon as possible. Russia has provided wheat and other agricultural commodities to ensure Pakistan’s food security. Increased Agreement Signed, Internal Security and Counter-Terrorism: A formal Memorandum of Understanding (MoU) has been signed between the Ministries of Interior of the two countries under the Joint Strategy on Security, Control of Cybercrime and Countering Terrorist Networks (especially Threats Emerging from Afghanistan), Strategic and Economic Cooperation between Pakistan, China and Russia is a prime example of the strength of the regional bloc and the protection of geo-economic interests. Pakistan-China relations are decades-long and evergreen, with the practical axis being CPEC Phase-2, construction of Gwadar Port, industrial transfer, and settlement of mutual trade in local currencies (yuan and rupee). On the other hand, Pakistan’s relations with Russia have undergone a historic strategic shift in recent years, with the focus being the launch of direct freight train service under the International North-South Transport Corridor (INSTC), promotion of barter trade (things for things), and access to new markets through the Eurasian Economic Union. In the energy sector, while China is supporting Pakistan in green energy and hydropower projects, Russia is helping Pakistan solve its energy crisis through cheap crude oil, gas supplies, and the upgrading of Pakistani refineries. Overall, Pakistan’s cooperation with China is based on infrastructure and long-term investment, while the partnership with Russia revolves around trade diversification and meeting immediate energy needs, which together make Pakistan an important geographical center of the Eurasian bloc. The immediate impact of the decisions of the Shanghai Cooperation Organization (SCO) and the recent agreements with China and Russia on the Pakistani economy is very significant, and they are playing a significant role in stabilizing the country’s economy. The continuous import of crude oil from Russia at concessional rates has immediately reduced the pressure on Pakistan’s import bill, which is saving valuable foreign exchange reserves.
The improvement in the energy mix with Russian energy and Chinese cooperation is making it possible to provide cheap electricity and fuel to industries, which has reduced the cost of local production.
After the pilot container freight train agreement with Russia and the Preferential Trade Agreement (PTA) with the Eurasian Economic Union (EAEU), exports of rice, textiles, fruits and vegetables from Pakistan to Russia and Central Asia are starting immediately.
Compared to the sea route, the freight transport time through the proposed rail corridor has been reduced from 35-45 days to just 20-25 days, which will immediately reduce the logistics costs for Pakistani traders. are decreasing
The use of local currencies (yuan and rupee) for trade settlement with China has led to a rapid decline in the demand for US dollars in the open market and interbank, which has stabilized the value of the rupee. Thanks to the ‘thing-for-thing’ trade model with Russia and Central Asian states, Pakistan is able to import key industrial raw materials and wheat without spending dollars. Under the CPEC Phase-2 Action Plan (2025–2029), joint projects between Chinese and Pakistani companies have begun immediately. The government has declared boosting domestic exports a national emergency and mobilised the private sector.
Agreements to transfer manufacturing and textile units from China to Pakistan are creating new local employment opportunities and boosting the manufacturing sector. Linking CPEC-2 with Pakistan’s “Climate Prosperity Plan” and China’s “Green BRI” is leading to immediate Chinese investment in eco-friendly projects, electric vehicles (EVs) and solar power.
