The UAE plans to invest $1 billion in Pakistani companies in various economic sectors as it looks to expand its investments in the South Asian nation, state news agency Wam said.
The move aims to explore new investment opportunities and areas for cooperation in projects across sectors and will further expand bilateral economic ties of the two countries, Wam said on Friday, attributing the information to an official source in Abu Dhabi.
The UAE’s new investment plans mark the keenness of the UAE and Pakistan to continue cooperation in “various fields”, which include gas, energy infrastructure, renewable energy, health care, biotechnology, agricultural technology, logistics, digital communications, e-commerce and financial services, the news agency said.
The UAE, the Arab world's second-largest economy is keen to the expand bilateral trade and investment relations with the countries across continents. UAE state-owned companies and government entities have multi-billion dollar plans to invest in Egypt and Jordan in the Middle East and the India and Indonesia in Asia.
The UAE has completed Comprehensive Economic Partnership Agreements with countries including India, Israel and Indonesia and is negotiating similar pacts with several other nations that will further expand its bilateral trade and investments ties.
Pakistan is facing widening fiscal deficit amid worsening political turmoil in the country. In July, it reached a staff-level agreement with the International Monetary Fund to resume its loan programme, which will help pave the way for the country to secure more than $1.17 billion and help 'stabilise' its battered economy.
The agreement is subject to the approval of the IMF’s executive board and will take the total amount of assistance extended by the fund to the country to $4.2bn, the Washington-based lender said in a statement at the time.
Pakistan in the past has turned to its GCC allies for investments and deposits to help lessen its financial strain.
In 2020, the UAE pledged Dh734.5m ($200 million) to support small and medium-sized enterprises in Pakistan through the Khalifa Fund for Enterprise Development, an initiative aimed at boosting entrepreneurship, assisting the Pakistani government’s efforts to create a stable and balanced national economy.
In 2018, the country deposited $3 billion (Dh11 billion) in the Pakistani central bank, the State Bank of Pakistan to support the country's fiscal and monetary policy.
The UAE has a long history of strong, political cultural and economic relations with Pakistan, which was among the first countries to recognise the UAE after it was founded in 1971. Strong ties were established between the countries from the outset, and have flourished in decades since.