ISLAMABAD, Feb 10: Pakistan has decided to buy textile machinery from Russia by competing with other countries, including India, according to the prime minister’s adviser on finance Shaukat Aziz.

“We have decided to penetrate the Russian market and initially we will be encouraging our private sector to purchase abandoned and unutilized Russian textile machinery,” he said.

Speaking at a news conference with Commerce Minister Humayun Akhtar, Mr Aziz said that Pakistani businessmen who had been buying US and Japanese textile machinery would now be importing Russian machinery after what he termed the “landmark” visit of President Gen Pervez Musharraf to Moscow.

He said that a decision had been taken during the president’s visit to offer access to Russia to reach warm waters through the Gwadar port.

“Through Gwadar, Russia can export its energy to many countries.”

He said that Russia had supported the gas pipeline project from Iran to India via Pakistan for which an MOU with a Russian company had already been signed.

Pakistan, he said, had also shown its interest in reviving the textile industry in Russia’s Ivanova region.

The commerce minister said the government had decided to set up a warehouse in Moscow where Pakistani products would be displayed.

Responding to a question, he said Pakistan did not have any objection to extending the Most Favoured Nation (MFN) status to Russia.

Nevertheless, he clarified that since Russia was not a member of the World Trade Organisation (WHO), MFN status could not be offered to Moscow. “But we have decided to support Russia to get into the WTO,” he added.

The current $80 million annual volume of trade between Pakistan and Russia, Mr Aziz said, needed to be significantly increased, and both sides had agreed to do so.

Both Mr Aziz and Mr Akhtar said they did not believe that the decision to enhance trade and economic relations with Russia would cause business problems with the United States and China.

“The US government itself is look-ing for good trade relations with Russia. Why would we be asked not to have such relations with the Russians?” Mr Khan said.

Mr Aziz said the Pakistan Steel Mills would be expanded under a phased balancing, modernisation, replacement and expansion (BMRE) programme for which Russia was expected to offer a $90 million loan.

“We have three options to utilize this $90 million loan. First, this could just be a loan or we ourselves should fund this expansion programme from our own resources or there could be a barter with Russia.”

Giving details, industries and production secretary Dr Akram Sheikh said that $100 million were required to undertake the first phase of expansion of the Steel Mills.

He said the existing production level would be increased from 1.1 million tons to 1.5 million tons. The expansion programme would help double the value addition of products. “The expansion of the steel mills will increase its profit from Rs500 million to Rs2 billion besides creating thousands of new jobs,” the secretary said.