This year marked the 50th anniversary of the “diplomatic relations and exemplary friendship” between Pakistan and the United Arab Emirates. Pakistan was the first to recognize the federation of seven Emirates in 1971 and enjoying brotherly ties with the UAE since then. The bilateral relations are driven by ideological affinities, coupled with political and economic cooperation. Presently, the UAE is one of the largest trading partners of Pakistan.
In 2014, trade between the two stood at $9 billion. The UAE has lent a $2 billion loan as part of its $ 6.2 billion bailout package announced in August 2018 to help the PTI government address international debt obligations. In December 2019, the UAE deposited $3 billion in the State Bank of Pakistan to enhance its liquidity and foreign currency reserves. Moreover, around 1.6 million Pakistani expats are working in the UAE and contributing about $4.5 billion annually to the GDP of Pakistan. During the FY 20, imports from the UAE to Pakistan stood at $6.4 billion. While the country’s exports to Dubai alone amounted to $1.3 billion, an increase of 14 compared to previous records. On the other hand, Pakistan sent essential food supplies to the UAE during Covid-19. Important industrial needs were also imported from the UAE including raw materials and machinery. Therefore, the trade relations are expected to further expand given Pakistan avails the opportunity to actively participate in Dubai Expo. Pakistan’s Pavilion at the expo symbolizes the unflinching, fraternal and friendly relations. This participation also showcased Pakistan’s “economic diplomacy initiative” and reinforced strong bilateral economic linkages. “While visiting Pakistan Pavilion at the expo, foreign minister Qureshi, appreciated the role of the Pakistani community in the UAE and stressed that Pakistan’s participation at the expo is an example of the enhancing Pakistan-UAE economic linkages.”
This cordiality has been maintained disregard of the governments in power. The PTI government is keen to attract foreign direct investment and ensure mutually beneficial political and economic ties with the UAE. Representatives of UAE’s private sector have visited and would likely invest in the special economic zones. Indeed, the Emirates is the economic hub of the Middle East and the private sector associations in Pakistan have expedited efforts to invite delegations from the UAE for joint ventures in value-added textile, high-end sports goods, pharmaceuticals, and health care products. Similarly, the foreign minister and president of Pakistan during their high-profile visits to UAE this year encouraged entrepreneurs to seek opportunities to establish strong ties in the business sector. The UAE foreign office has also stated that they will be keenly looking into the matter of work visas to Pakistanis, halted in November 2020. Pakistan has expressed urgency on this count. It is very likely that liberal regime for long-term business visas would soon be announced for Pakistan. Moreover, the Covid era uncovers opportunities in previously unexplored sectors. These include IT and ICT services, telemedicine, and education. Pakistan’s digital trade integration policy offers prospects of success for startups and mature firms in the Gulf.
The two partners are closely aligned in regional development, peace and stability. In the wake of Taliban takeover and humanitarian crisis in Afghanistan, the UAE ensured Pakistan of its full support for the promotion of peace and stability in Afghanistan. Pakistan organized an extraordinary moot of foreign ministers of OIC members in Islamabad on 19th December, where the UAE Participated and applauded the efforts of Pakistan to support Afghanistan. Last but not the least, the UAE has been offering its services and offices for mediation between India and Pakistan over Kashmir. UAE’s Ambassador to Washington Yousef Al Otaiba had confirmed that the Gulf States are mediating between India and Pakistan to help the nuclear-armed rivals forge a “healthy and functional” relationship. This geostrategic milieu can potentially lead to China-UAE cooperation on BRI thus augmenting regional trade and investment. Given UAE’s reliance on friendly states to meet security needs, Pakistan offers security and military cooperation. Likewise, Pakistan offers trained and skilled labour so as to boost foreign remittance and ensure value-addition to the relations. In the CPEC context, linking Gwadar and Dubai will transform this region into a new global economic hub.