It was way back in 2011 when the United Arab Emirates (UAE) held first-ever single-country exhibition in Karachi, Pakistan. The basic reason for the event was to increase bilateral trade and business opportunities for the investors of both the brotherly countries. During the event it was emphasized that the UAE was second largest investor in Pakistan with $21 billion investment in key sectors like energy, telecommunication, real estate, aviation and banking. There were lots of hopes that the bilateral trade would skyrocket since the potential did exist.
Almost after seven years, the trade between both the countries has not surged as envisaged. The bilateral trade between Pakistan and UAE stands at around $9 billion, far below the actual potential. Currently, Pakistan’s exports to the UAE are around $2 billion whereas Pakistan imports products worth $7 billion. The UAE like Saudi Arabia is one of the leading oil suppliers to Pakistan whereas Pakistan exports agro-based products to the UAE.
The recent visit of Mr Imran Khan, the Prime Minister of Pakistan, to the UAE has rekindled hopes for whopping economic ties between both the countries. Prime Minister Imran Khan, during his visit to the United Arab Emirates, met his counterpart Sheikh Mohammed bin Rashid Al Maktoum as well as Sheikh Mohammed bin Zayed bin Sultan Al-Nahyan, the Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces. The outcome of the meetings between the leaders augurs well for the economic ties. Though there are no commitments, the UAE might facilitate Pakistan, like Saudi Arabia, in oil supply through preferential treatment which is badly needed by Pakistan in the given circumstances.
Bilateral trade between India and the UAE is around $55 billion with a target of $100 billion set for 2025. Pakistanis have invested over $100 billion in UAE which is one of the largest investment by a single country and hundreds of Pakistani companies are doing business in economic freezones of the UAE. Pakistan needs to invite UAE investors likewise since Pakistan has and is going further to have EPZs which would be great opportunity for the UAE investors.
The recent initiative by the Prime Minister of Pakistan regarding beefing up the agriculture sector in general and livestock in particular could be highlighted since UAE investors would eagerly invest in these sectors as UAE is one of the leading importers of agro-based products from across the world. Pakistan needs to ensure that the two-way trade spikes and the trade imbalance with the UAE is addressed since Pakistan is already facing the conundrum of current account deficit. Attracting FDI from UAE is one of the best options to address this issue. Agro industries, horticulture, farming, dairy farming, livestock etc. are the sectors which may attract quick bucks and lasting relations.
It would be great for the economy and export of Pakistan in case Pakistan and the UAE sign the currency swap agreement. India has recently signed such agreement with the UAE which would boost the economic ties between them. Along with the economic ties, Pakistan needs to ensure that the political ties with the UAE are further strengthened since some countries in the world do take advantage of political ties and endeavor to transform political ties in economic ties whereby increasing trade.
The Annual Investment Meetings and Expo 2020 in UAE could bring a host of opportunities for the business communities of Pakistan and the UAE to explore possibilities for enhancing their business prospects. This event would be attended by over 100 countries and during this event, Pakistan could make its presence as one of the emerging economies of the world.
Pakistan may offset its problems of current account deficit with the foreign remittances. Around $20 billion are being sent by the overseas Pakistanis which prop up the economy of Pakistan to great extent. There are around nine million Pakistanis working abroad. Over two million Pakistanis are working in the UAE. According to a recent report by the International Labor Organization (ILO), the labor market demand for low and semi-skilled migrant workers in the Gulf Cooperation Council (GCC) countries’ private sector is projected to remain high in the short-term, as there are numerous mega projects coming up including the ‘Expo 2020’ in Dubai, UAE. Pakistan must concentrate on the vocational training programs to meet the demand of the skilled and semi-skilled work force in the GCC which ultimately would uplift the economy of Pakistan.