PAKISTAN has long maintained strong ties with the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE), and the recent camaraderie between the UAE President and Pakistan’s Prime Minister highlighted the depth of their relationship. This bond goes beyond personal connections, reflecting a deep-rooted alliance that has seen the Arab nations support Pakistan through economic crises. As Pakistan strives for economic stabilization, it looks to the Gulf region, as a key partner.
Through the Special Investment Facilitation Council, Pakistan has invited Gulf countries, especially the UAE, to invest in sectors such as agriculture, mining, energy and infrastructure. The UAE President has expressed interest, with a recent reaffirmation of the $10 billion investment pledged during Prime Minister Shehbaz Sharif’s earlier visit. However, Pakistan’s failure to create a business-friendly environment has hindered the realization of these investments. Internal inefficiencies continue to deter foreign investors, despite the goodwill from its Arab allies.
Pakistan’s inability to meet international investment standards remains a recurring issue. In May 2024, a Saudi delegation visited to explore investment opportunities but left without making commitments due to incomplete preparations on Pakistan’s part. A similar situation occurred in October when a Gulf delegation found the groundwork lacking. Gulf investors recognize Pakistan’s potential but are seeking well-structured opportunities, which Pakistan has failed to present due to a lack of reforms. Arab nations have pointed out Pakistan’s structural financial issues and a lack of trust in its financial system. Saudi Arabia, while maintaining diplomatic norms, recently sent a clear message: they expect Pakistan to implement reforms and take responsibility for its economic challenges, much as they are imposing taxes on their own citizens.
Another challenge for foreign investors is Pakistan’s security situation. While security forces have made strides to improve the environment, global perceptions of instability remain. Pakistan must continue addressing these concerns to assure potential investors of the safety of their investments. The UAE’s suspension of work visas for Pakistani labourers has also disrupted employment opportunities. The government must prioritize resolving this issue to sustain the inflow of remittances, vital for Pakistan’s economy.
While seeking large-scale foreign investments, Pakistan must also strengthen its small and medium enterprises (SMEs), the backbone of its economy. The government has taken steps by engaging international experts, simplifying loan processes for SMEs and improving coordination between federal and provincial authorities. Prime Minister Shehbaz Sharif has emphasized the importance of integrating local industries into the global supply chain. However, consistent efforts from both levels of government are required to support SME growth. These enterprises play a crucial role in the country’s economic framework and should complement efforts to attract large-scale foreign investments.
The UAE has been a reliable ally, extending financial assistance to Pakistan in its most challenging times. Its willingness to invest reflects the depth of the bilateral relationship. However, Pakistan must now leverage this goodwill by addressing its structural inefficiencies in governance, financial transparency and infrastructure. By doing so, Pakistan can create a business environment that meets international standards. UAE’s support, coupled with strategic reforms by Pakistan, can pave the way for a prosperous partnership, ensuring a brighter future for both nations.
—The writer is contributing columnist, based in Turbat, Balochistan.
