UAE Crown Prince seals $3 billion financial assistance for Pakistan

Prime Minister Imran Khan and Crown Prince of UAE H.H Sheikh Muhamed bin Zayed Al Nahyan standing in respect of the National Anthem during Official Welcome Ceremony at PM House in Islamabad on January 6, 2019

The relations between the United Arab Emirates (UAE) and Pakistan are based on mutual love and respect and they have blossomed into a variety of fruitful partnerships and friendship. The close ties between the two countries are the main element of the growing partnership. The second major pillar of the distinctive bilateral relations between the two countries is the harmony in views on issues of regional and global importance.

Pakistan and the UAE share the same principles of tolerance and inclusiveness as being the main guarantees for peace and stability in the region. The third pillar of these bilateral relations is the human factor is the main element in the UAE’s humanitarian policy. The relentless humanitarian and developmental efforts made by the UAE’s wise leadership are the basic pillars of the country’s foreign policy established by the founding father Shaikh Zayed and have been maintained by Shaikh Khalifa.

In recent years, the bilateral relations between the United Arab Emirates and Pakistan have acquired new dimensions at all political, economic and social levels emerging into trust-worthy strategic partnership and are still continuing. UAE has become hub of investments, exports, technologies, tourism and renewable energies and large number of Pakistanis is contributing in the UAE’s economic boom. In Pakistan, UAE surely has encouraged investment and helps in greater trade and commerce activities. UAE is one of largest investors in Pakistan but bilateral trade has been steadily growing over years and people-to-people contacts are constantly on increase.

Apart from trade and economic relations, Pakistan UAE military ties are time tested. The Pakistani military has a historic role in helping to train and equip the UAE military, such as training fighter pilots of the UAE air force and other defence related equipment and technology acquisitions. Apart from exchange of delegates at official and unofficial level, military conducts joint exercises to strengthen their capabilities.

A strong and strategic alliance exists between the two countries, with the Pakistani community in UAE, estimated at 1.6 million people, considered the biggest expatriate Pakistani community in the world, officials said. Their remittances from working in the UAE amount to $433.42 million (Dh1.59 billion) annually. In addition, many in Pakistan’s private sector have invested in Dubai’s real estate sector. On the other hand, it is estimated that UAE investments in Pakistan stand at $3 billion (Dh11 billion). Pakistan exports $869 million worth of goods to the UAE, and imports goods worth $7.5 billion in return. While Pakistan’s exports to UAE include mainly rice, textiles and leather, Pakistani analysts believe this does not signify the “true potential” of opportunities between the two countries.

In May last year, UAE and Pakistan signed a $200 million (Dh734 million) cooperation agreement to execute Phase III of the UAE Pakistan Assistance Programme (UAE PAP). The UAE PAP has been launched with the objective of providing help and humanitarian assistance to the people of Pakistan and support their development initiatives for a better future. Its mission is to execute development aid projects that offer sustainability and continuous benefits to beneficiaries over the long run. The launch of the third phase of the UAE’s development and humanitarian projects in Pakistan underscored the commitment of the UAE to stand constantly by the people of Pakistan, affirming that the PAP is a pioneering model and a tangible guide to success of the humanitarian development effort of the UAE leadership.

In November last, Pakistan and the United Arab Emirates (UAE) resolved to strengthen bilateral trade and economic ties, besides fostering cooperation to deal with transnational organised crime, including money laundering, drug and human trafficking. Bilateral ties were discussed in the meetings between the Emirati leadership and Prime Minister Imran Khan who paid a day-long visit to the Emirates, at the invitation of UAE Armed Forces Deputy Supreme Commander and Abu Dhabi Crown Prince Sheikh Muhammad bin Zayed Al Nahyan. In the delegation-level talks with Crown Prince Sheikh Muhammad bin Zayed, the two sides focused on all areas of bilateral, regional, and global interest.

Expressing satisfaction at the positive trajectory of relations, the two leaders agreed to take immediate measures to further elevate their historic partnership. They resolved to strengthen trade and economic ties and eliminate all impediments to a seamless flow of trade and investment between the two countries. They expressed satisfaction over the fruitful outcome of the visit of the high-level UAE economic delegation to Pakistan recently and reiterated their resolve to transform the existing special relations into a Strategic Long-Term Economic Partnership by adopting a direct, transparent and time bound approach.

The two sides agreed to chalk out a comprehensive roadmap to accelerate cooperation and partnership in areas encompassing trade, investment, economic development, energy, infrastructure and agriculture, with a view to accrue early dividends from the economic partnership. PM Khan and the crown prince decided to hold the next Pakistan-UAE Joint Ministerial Commission, to be co-chaired by the respective foreign ministers, in Abu Dhabi in February 2019. They further reaffirmed their commitment to hold the Senior Officials’ Bilateral Political Consultations between the foreign ministries and fast track finalisation of pending agreements at the earliest.

But the current visit of visit by Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces to Islamabad has infused a new spirit in already wonderful cordial relations between both the countries. Because the strategic, all-round ties between Pakistan and the United Arab Emirates (UAE) have entered a new phase when the two countries decided to constitute a task force for taking all necessary measures to enhance bilateral trade.

The development came during a meeting between Prime Minister Imran Khan and Crown Prince of Abu Dhabi Sheikh Mohamed bin Zayed Al Nahyan at the Prime Minister’s Office (PMO) here. Sheikh Mohamed visited Pakistan after 12 years during which he was expected to announce investment packages for Pakistan. Both sides also discussed various regional and global issues and expressed complete unanimity of views in this regard.

According to the finance ministry, the two countries have finalised a $6.2 billion bailout package. It comprises $3.2 billion worth of oil supplies on deferred payment, on top of the $3 billion BoP support already announced late last year when Imran Khan visited the UAE .

Sheikh Mohamed affirmed his keenness to develop cooperation with Pakistan to serve the two countries’ common interests. In December, the UAE deposited $3 billion (equivalent to Dh11 billion) in the State Bank of Pakistan to support the bank’s liquidity and foreign currency reserves.

In December, the UAE deposited US$3 billion (equivalent to AED11 billion) in the State Bank of Pakistan to support the bank’s liquidity and foreign currency reserves. The move is an affirmation of the UAE’s commitment – since the time of the Founding Father, late Sheikh Zayed bin Sultan Al Nahyan- to stand by the Pakistani nation. The UAE, he noted, focuses on supporting efforts to achieve development, security and peace at regional and international levels through its constructive initiatives. These initiatives are aimed at achieving stability and prosperity for all peoples. It also continues to promote the values of tolerance, dialogue, coexistence and cooperation in the face of various regional and international challenges.

Prime Minister Imran Khan thanked the UAE for the generous $3 billion balance of payment support and said the assistance testified to the UAE’s continued commitment to and friendship with Pakistan. He welcomed the UAE’s interest in investing in oil, gas, logistics, ports and construction sectors. The two sides expressed satisfaction over the ongoing defence and security cooperation and vowed to further boost collaboration in areas of training, joint exercises and defence production. They strongly condemned terrorism in all its forms and manifestations and expressed their resolve to work closely to root out this scourge.

Sheikh Mohamed bin Zayed Al Nahyan recognised the efforts and unparalleled sacrifices made by Pakistan to eliminate terrorism and extremism. Prime Minister Imran Khan briefed him on the situation in the Indian Held Kashmir and the plight of Kashmiris. He also briefed him on the PTI government’s people-centric reform agenda and the steps taken to promote transparency and accountability at all levels of government. He also briefed the distinguished guest on Pakistan’s continued support and facilitation to the Afghan-owned and Afghan-led reconciliation process. He also appreciated the UAE’s role in hosting the Afghan reconciliation talks in Abu Dhabi. The two leaders agreed to work closely for lasting peace and stability in the war-plagued Afghanistan. The crown prince thanked the premier for the warm welcome and hospitality extended to him and his delegation. Imran Khan personally drove the crown prince of Abu Dhabi to the Prime Minister’s House (PM) as a gesture of exclusive affection for the visiting leader where meetings and talks were held.

At the delegation level talks between Pakistan and the United Arab Emirates discussed bilateral relations and matters of mutual, regional and international interest. During his one-on-one meeting with Imran Khan, bilateral relations and regional situation among other matters of mutual interest were discussed. The sides also held delegation level talks. Pakistani and the UAE leaders have met thrice in three months. The prime minister visited the UAE twice after assuming office in August to seek economic assistance.

The UAE announced that it will provide Pakistan with an aid package which will include $9billion in oil payments and a $3billion deposit in the State Bank of Pakistan. The Middle Eastern country will also reportedly announce investment in various fields in Pakistan. The UAE is Pakistan’s largest trading partner in the Middle East and a major source of investments. More than 1.6 million expatriate Pakistani currently reside in the UAE who contribute around $4.5 billion annually to the GDP. Pakistan and Abu Dhabi are also likely to sign a deal for investment of $1 billion by the emirate in setting up oil storages at Gwadar Port and laying a white oil pipeline during the crown prince’s visit. Meanwhile the UAE agreed to invest $1 billion through Mubadala, a global investment company. With this capital injection, the total UAE assistance and investment package for Pakistan will rise to $7.2 billion. It also includes a $3.2-billion oil credit facility and $3 billion in cash support for balance of payment.

As joint statement issued after the UAE royal’s visit said Prime Minister Khan thanked the crown prince for the generous balance-of-payments support of $3 billion, which appears to have materialised first out of the total financial package. The two leaders held wide-ranging talks that focused on all areas of bilateral relations. Taking note of the positive trajectory of relations, the two leaders expressed their determination to further strengthen this historic and mutually beneficial relationship.

The two sides also discussed issues of regional and global importance, with Khan briefing the crown prince on the situation in Indian occupied Kashmir and the plight of the Kashmiri people.
During the meeting, Prime Minister Khan and Crown Prince Sheikh Mohammed noted that the Pakistan-UAE Joint Ministerial Commission, to be co-chaired by the two countries’ foreign ministers in Abu Dhabi next month, could play a pivotal role in chalking out a comprehensive roadmap and in fast-tracking the approval of pending agreements and memorandum of understandings (MoUs).

The two leaders expressed their satisfaction over the ongoing defence and security cooperation between the two countries and resolved to explore further collaboration in the areas of training, joint exercises and defence production. The new support package from the UAE is the same size and has the same terms and conditions as those given by Saudi Arabia. The total financing support from the UAE and Saudi Arabia, including the ITFC’s trade finance, is to be around $13.9-14 billion when cash deposits of $3bn each from the two countries are also included, according to a cabinet member. Additionally, a $5-6 billion worth of deep-conversion oil refinery is to be set up by Parco at Khalifa Point and an expected petro-chemical complex by Saudi Arabia at the Gwadar Oil City.

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