Pakistan can leverage new-found UAE-Turkey friendship

KARACHI: Pakistan could stand to benefit from the apparent thawing of relations between the UAE and Turkey, whose ties the past decade have been strained.

The UAE plans to launch a $10-billion fund to support investments in Turkey as the two signed several deals recently. The fund will focus on sectors like energy, food and healthcare.

The two have also signed cooperation agreements for their wealth funds, stock exchanges and central banks, plus a nearly $5-billion swap deal in local currencies.

Their relations were badly strained in the wake of the 2011 Arab Spring uprisings and amid a battle for influence.

Some experts say countries in the Middle East now want to improve relations with regional players as the United States’ attempts to end active involvement could lead to a power vacuum. It could even be seen as a part of a wider trend of de-escalation in the region.

This could be to Pakistan’s advantage as the South Asian nation is working hard to attract more investment from not just the UAE and Turkey but also Saudi Arabia.

Pakistan’s Board of Investment Chairman Azfar Ahsan (BoI) said Pakistan is introducing 103 “massive reforms” recently that are “directly linked with FDI and investment opportunities with different countries, including UAE and Turkey”. The idea is to improve internal regulation to attract investment and then improve FDI.

He said PM Imran Khan is set to visit Turkey in May and that “many Turkish investors including Dawlance and Coca-Cola Içecek (CCI) are doing very well, and we are facilitating them.”

CCI is one of the largest Turkish investors operating in the Pakistani food industry. In December, CCI announced an investment of $50 million for a project in Khyber Pakhtunkhwa.

Meanwhile Turkish company Arçelik bought Pakistan’s home appliances brand Dawlance for $243-million in 2016 and Arçelik has also said it wants to invest heavily in Pakistan.

Ahsan said he recently met with the Turkish ambassador to discuss bilateral relations with plans to “to attract and engage more investment from various sectors from Turkey.”

As for the UAE, he said relations are very good right now as Pakistan “aggressively participates” at the Expo 2020, with its pavilion among the top most visited.

The PM intends to visit the country next month and the BoI will be holding several investor meet ups for different sectors. It has already hosted several such events at the Expo.

“We are in collaboration with UAE based investors and we are looking for investment particularly in the housing and IT sector… We are optimistic we will attract more investment.”

He also played up a $15 million investment in Pakistan by Brother Gas to set up an industrial gas plant in Faisalabad and said “other players are in the pipeline. We are in regular communication with all of them”.

Ahsan said the BoI is trying to get UAE investors to work with local investors and form joint ventures as, in his opinion, that is the best model for collaboration.

He added IT and construction sectors are key focus for Pakistan, where he feels joint ventures and investment opportunities are aplenty when it comes to the UAE.

Another country that will play a significant role in this is Saudi Arabia. The BoI is working closely with Khalid Al-Falih, the country’s investment minister, and is planning an investment meetup in Riyadh next month as a follow up to the PM’s last visit.

“This is not a one-time affair. The BoI wants to host again and again and we are focusing on the outreach and engagement of multiple sectors and investors.

“We are expecting FDI in 2022 from Saudi,” added Ahsan, in the form of government to government, government to business and business to business investment.

He said Saudi is an “aggressive player, while Riyadh is the centre of attraction for the global community these days and the Saudi Vision 2030 [a framework to reduce dependence on oil and diversify its economy] is very clear” and one Pakistan can benefit from.

When it comes to all three countries the BoI and the government “is active and all ministries are collaborating for this,” said Ahsan.

Going forward, he hoped Pakistan can participate in many more expos around the world including the World Economic Forum and other platforms in Asia and Africa to create awareness about its investment opportunities.

“All these activities are part of creating awareness and marketing and branding Pakistan without which you can’t create an enabling environment” for investors.

Copyright Business Recorder, 2022