UAE investment in Pakistan to remain intact

ABU DHABI/DUBAI — UAE and Pakistan economic relations will remain strong and the resignation of President Pervez Musharraf will have no negative impact on trade and businesses, investors have said.

Talking to Khaleej Times on Monday, they said project investment from the UAE and Gulf will remain intact, however, portfolio investment into Pakistan may be slightly hit in the short term.

Investors said commercial ties between the two countries will remain unaffected with the resignation of President Musharraf. However, bankers, economists and investors did see some fears in short term, in case remaining political issues are not resolved amicably. But for long term, they all agreed that Pakistan has substantial potential to attract investment into its fast growing economy.

'We see no impact on our operations in Pakistan,' a spokesperson for DP World said.

A general manager at Abu Dhabi’s leading investment group, who declined to be named, said: “We are cautious in our investment plans for Pakistan for the time being… we are watching the situation emerging out of the resignation, very carefully, in case it further deteriorate.”

He added the group is confident of its long-term investments in industry, real estate and other diversified businesses.

Shariq Azhar, a former CEO of an investment company, which has made over $500 million investments in Pakistan’s property sector, said that events unfolding in next couple of weeks will determine the flow of investments into Pakistan.

With respect to investment from the UAE and the Gulf, Azhar said that political stability could attract investments, as the country’s market size is a big attraction, itself.

Mehmood Suliman-Ray, a fund manager who has made investments in stocks and securities, said his fund has no plan to pull investments from Pakistan.

“We have long-term investment interests there… as fundamentals are strong and the current situation does not cause any worry.”

Marios Maratheftis, chief economist at Standard Chartered Bank said President Musharraf's resignation has saved the country from a further political stand-off, which would help stabilise the economy.

He said there are some concerns for the economy in the short term. 'Macroeconomic figures i-e budget deficit, current account deficit, rising CPI would be difficult to fix.'

On the investments into Pakistan's real estate sector, Maratheftis said they would not be affected, as Pakistan is a big market, and the growing economy was liberal and reforms process was underway.

Tanvir Khawaja, director, Pakistan Business Council, said it would be a positive move for the country in general and the economy in particular. He said Pakistani stocks and rupee reacted strongly and made a major recovery after the announcement of his resignation.

In reply to a question, he said economic ties between Pakistan and Gulf states will not be affected with the change of personalities. 'The UAE, Saudi Arabia and other Gulf states have strong relations with Pakistani nation and are not linked with persons,' he said.

A senior diplomat seeking anonymity said President Musharraf resignation will bring boom in the economy. He said the resignation will have no 'negative impact' on Pakistan-UAE business relations in near future.

'There is no major meeting scheduled in coming weeks so the 'business will remain as usual' between the two countries,' he said.

haseebhaider@khaleejtimes.com , muzaffarrizvi@khaleejtimes.com

Readers comments

Lets hope for the best towards the political stability and honest / good governance! Pakistan is undoubtedly a very lucrative market for foreign investment minus, law & order (Terrorism) –Abu Aman, Abu Dhabi