UAE to support business in Pakistan despite state of emergency

The UAE is the largest single investor in Pakistan, pumping in $13bn in 2005-2006, and has a relationship with the country that dates back more than three decades.

Having geographical proximity and shared interests has helped the two countries to reach strong trade levels amounting to $4.1bn in 2005-2006.

It doesn't take a savvy businessman to tell you that when a country is politically unstable it's time to pull out or at the very least slow down further investments.

"This is normal, whenever there is a problem in a country business is likely to be affected, but when it comes to trade between the UAE and Pakistan nothing will change," said Mohamed Bin Majed Al Aleeli, General Manager of the Economics Department in the Ministry of Finance and Industry.

Last June, UAE officials signed a Memorandum of Understanding (MOU) with Pakistan agreeing to double the amount of in investments made over the coming year. Since June 2006 to March 2007 UAE investments reached $343.2m, representing 8.9 per cent of Pakistan's total FDI, which Al Aleeli believes will continue to grow.

Al Ghurair Group is one of the UAE based companies that invested heavily in Pakistan in fast consumer goods such as food products and petroleum.

"I cannot disclose the amount of investments we have in Pakistan, but I can tell you that we are and will continue our operations since its one of our biggest markets," said an employee at Al Ghurair Group who spoke to AME Info under condition of anonymity.

With a population close to 165 million, a developing economy and a wide range of resources Pakistan is the sleeper hit of the region. "Pakistan still has so many economic sectors that are still in their infancy and are in need for further development like real estate, telecommunications, banking and general infrastructure," said Al Aleeli.

Dubai's Emaar Properties, one of the largest real estate companies the Middle East with projects in 16 countries told the press on 5 November that it had no plan to halt its $43bn project to build a city near Karachi. Similarly UAE telecom operator Etisalat continues to hold 26 per cent stake in the Pakistani telecom company and has no plans to back out.

Looking at the matters from a political angle some might argue that the USA's decision to review its financial aid to Pakistan might alarm some companies and governments that strive US's approval.

"I don't think that the UAE companies or government care too much about this issue mainly because the UAE has a very strong ties to Iran and of course everyone knows what the US thinks of Iran," says Giyas Gokket, researcher at the National Bank of Abu Dhabi.

He further shrugged off the potential of a complete halt of business between the two countries. "These things happen all the time in Pakistan and I highly doubt that any long term implications on business will happen, it's all a matter of time and things will be back to normal," predicts Gokket.

And practically being a second home to more than 700,000 Pakistani expats it is rather unlikely that UAE will stop supporting its oldest ally.

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