By Tirthankar Mitra
An offer from United Arab Emirates to invest in Pakistan is a feasible route to pull it out of its entrenched economic crisis. The offer comes in the wake of a spurt in the volume of capital flow from Emirates and Saudi Arabia into India.
The UAE offer comes at a time when Pakistan is about to tee off on another IMF programme for structural adjustment. It is the 23rd such endeavour since 1958 which does not speak well of its economic policy planners or the captains of industry.
India’s economic engagement with the Gulf countries has been somewhat belated. But it started with a flourish since 2014 following a change of course which saw UAE and Saudi Arabia occupying some of the top slots in the list of India’s most valued strategic partners.
Religious solidarity, a regular flow of economic assistance,. assurance of regional security and concessional oil supply facility by UAE marked the foundation of its relations with Pakistan. Exclusive privileges enjoyed by Gulf rulers in Pakistan cemented the relation. .
Buying Pakistan’s public assets which its governments want to privatise are part of the UAE offer. Modernizing Karachi port and inking a trade liberalisation agreement are part of the offer which have run into controversy in the country though its government do not have too many options but to give its nod to it.
UAE’s offer of its investment in Pakistan has to be viewed in the backdrop of the latter showing an increasing population growth and shrinking economic potential. It does not make the two countries equal partners in any economic deal they enter into.
Pakistan’s economic heft has been found to be falling short of its target of its assuming a command position at the international level. An Islamic country which boasts to be an atomic power is not enough.
A pointer to this shortcoming came to the fore when in 2019 Saudi Arabia’s leadership in the Islamic World was sought to be challenged by the then Pakistan Prime Minister Imran Khan, he was quickly put into place. Khan’s efforts to turn the tables on Saudi Arabia by allying with Turkey and Malaysia came to nought.
The economic crisis in Pakistan can be traced to its rulers reluctance to sweeping economic. changes. On the strength of its strategic location, the powers that be in this country have their eyes on extracting impressive economic assistance from China, Gulf and of course the US.
But conditions have changed and so have priorities. While China has never been generous, American economic aid has reduced to a trickle after its withdrawal from Afghanisthan while the Gulf is no longer willing to hand over freebies.
There has been a significant change of scene following India’s engagement with Gulf countries. Pakistan’s relations with the Gulf countries no longer loom larger than that of India.
There is no denying that India’s present relations with UAE and Saudi Arabia have put the relations of these two countries with Pakistan in the shade.
India is. Interested in Pakistan’s economic recovery since economic instability can push its rulers into a military misadventure with India. Pakistan’s present government is aware of the ground reality. So the ruling coalition is looking from economic assistance from all sources, especially the Gulf nations. (IPA Service)
