DUBAI // Pakistan is waging a war against militancy in an effort to keep pro-Taliban forces at bay. Losing this war would see the country deprived of more than just territory. Troops are not just fighting to save the sovereignty of Pakistan, which is desperately trying to avoid sharing the same fate as neighbouring Afghanistan.
Their efforts in north-western Pakistan are also protecting a fragile economic base that has threatened to collapse several times during the past decade.
Growing terrorist attacks and a corresponding rise in the body count among civilians and security personnel alike, coupled with a global economic slowdown, have led to a dramatic decline in foreign direct investments (FDI).
This is a clear indication, analysts say, that the security situation in the country needs to improve, and improve really quickly, for foreign investors to once again tread on Pakistani soil.
"Lower levels of confidence and liquidity have combined with concerns about the security situation that is affecting [investment] inflows into Pakistan," says Claudine Fry, a South Asia analyst at Control Risks in London.
From July to November last year, Pakistan received US$774 million (Dh2.84 billion) in FDI, a 52 per cent drop compared with a similar period in 2008, says the Board of Investment, a Pakistani body set up to promote foreign investment in the country.
If the financial toll has been severe, the human cost has been greater.
The South Asia Terrorism Portal, a terrorism and security analysis organisation in New Delhi, says the total number of people killed in violence in Pakistan nearly doubled from 3,599 in 2007 to 6,715 in 2008. The 2008 toll includes 2,155 civilians, 654 members of the security forces and 3,906 people believed to be terrorists.
There was no respite for civilians or the security forces when the government launched an operation against pro-Taliban groups last year, in which 1,600 people thought to be extremists and 158 soldiers were killed. The number of civilians displaced from Pakistan's Swat region alone during the fighting is close to 300,000.
Last year, retaliation from hardliners saw 87 terrorist attacks in North West Frontier Province (NWFP) alone that killed 824 people, including 228 security personnel from various organisations.
In other provinces, suicide bombers have attacked the Pakistani army's headquarters and the offices of the country's premier intelligence agency, Inter-Services Intelligence, crowded markets, mosques, schools and universities.
Continuing terrorist attacks will only make attracting foreign investment more difficult. Pakistan's economy has been in a parlous state for the past two years.
The government twice had to approach the IMF for loans totalling more than $11bn.
To date it has received only $6.34bn. Pakistan also sought financial help from a group of friendly countries last year and approached the World Bank and the Asian Development Bank to meet its growing balance of payments deficit and to stabilise its fragile foreign currency reserves, largely reliant on foreign aid and borrowings.
The country's long-term investment potential is not in dispute, but today the government is struggling to attract foreign investment. Traditionally, whenever Pakistan had faced economic troubles, help had always been at hand from the Gulf region, either in the form of direct aid or via partnerships.
This time is no different as Pakistan has approached investors from the UAE for a quick cash boost in return for the government's stakes in nine of the country's top corporations.
Officials from Pakistan's privatisation commission along with JPMorgan Chase, the lead manager on the project, have recently concluded a series of presentations to investment houses including the Abu Dhabi Investment Authority, one the largest sovereign wealth funds in the world, the Emirates Investment Authority and Invest AD.
The government is looking to sell its holdings in firms including the largest lender, National Bank of Pakistan, which has assets of more than $10bn.
Also up for grabs are government holdings in the Oil and Gas Development Corp, Pakistan Petroleum, Faisalabad Electric Supply Company, Kot Addu Power, Jamshoro Power, Pakistan Post Office and State Life Insurance Corp of Pakistan, the country's biggest life insurer. The government is also offering its remaining 42 per cent stake in Habib Bank, the largest private commercial bank.
Pakistan's minister for privatisation, Waqar Ahmed Khan, said the government's stake in various corporations could be worth as much as $100bn.
"This amount can be raised and used in a variety of ways with the right approach to privatisation process and deal-making," he said.
In his optimistic view, the government can sell five of its corporate holdings in the first half of this year.
However, data posted on the Board of Investment's website paints a different picture: Pakistan has not recorded a single privatisation deal in the past 18 months.
Ms Fry says all is not as bleak as it appears for Pakistan. Despite serious security problems and political uncertainty, there are still signs of investor appetite for engagement in the country.
"There are signs of resilience among investors, particularly those with a long-established presence in the country," she says.
However, those who are already in Pakistan are finding it difficult to operate in a politically influenced business environment. One example is the experience of Etisalat, the UAE's largest telecommunications operator, which is in a dispute with the Pakistani government over a 2006 stake it bought in Pakistan Telecommunication for $2.6bn.
Etisalat has withheld payments worth close to $1bn as it seeks a transfer of valuable commercial property that is included in the original share purchase agreement.
Political instability, conflicts within state institutions and threats of militancy and economic upheaval have put the country in a precarious situation.
Pakistan needs to rise above the challenge.
Surviving on foreign aid, which has continued to flow because Pakistan is a front-line state in the war on terrorism, and boosting foreign exchange reserves through borrowing are not the answer.
@Email:skhan@thenational.ae
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
More coverage from the Future Forum
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- Join parent networks
- Look beyond school fees
- Keep an open mind
About Proto21
Date started: May 2018
Founder: Pir Arkam
Based: Dubai
Sector: Additive manufacturing (aka, 3D printing)
Staff: 18
Funding: Invested, supported and partnered by Joseph Group
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
the pledge
I pledge to uphold the duty of tolerance
I pledge to take a first stand against hate and injustice
I pledge to respect and accept people whose abilities, beliefs and culture are different from my own
I pledge to wish for others what I wish for myself
I pledge to live in harmony with my community
I pledge to always be open to dialogue and forgiveness
I pledge to do my part to create peace for all
I pledge to exercise benevolence and choose kindness in all my dealings with my community
I pledge to always stand up for these values: Zayed's values for tolerance and human fraternity
Race 3
Produced: Salman Khan Films and Tips Films
Director: Remo D’Souza
Cast: Salman Khan, Anil Kapoor, Jacqueline Fernandez, Bobby Deol, Daisy Shah, Saqib Salem
Rating: 2.5 stars
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Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Spain drain
CONVICTED
Lionel Messi Found guilty in 2016 of of using companies in Belize, Britain, Switzerland and Uruguay to avoid paying €4.1m in taxes on income earned from image rights. Sentenced to 21 months in jail and fined more than €2m. But prison sentence has since been replaced by another fine of €252,000.
Javier Mascherano Accepted one-year suspended sentence in January 2016 for tax fraud after found guilty of failing to pay €1.5m in taxes for 2011 and 2012. Unlike Messi he avoided trial by admitting to tax evasion.
Angel di Maria Argentina and Paris Saint-Germain star Angel di Maria was fined and given a 16-month prison sentence for tax fraud during his time at Real Madrid. But he is unlikely to go to prison as is normal in Spain for first offences for non-violent crimes carrying sentence of less than two years.
SUSPECTED
Cristiano Ronaldo Real Madrid's star striker, accused of evading €14.7m in taxes, appears in court on Monday. Portuguese star faces four charges of fraud through offshore companies.
Jose Mourinho Manchester United manager accused of evading €3.3m in tax in 2011 and 2012, during time in charge at Real Madrid. But Gestifute, which represents him, says he has already settled matter with Spanish tax authorities.
Samuel Eto'o In November 2016, Spanish prosecutors sought jail sentence of 10 years and fines totalling €18m for Cameroonian, accused of failing to pay €3.9m in taxes during time at Barcelona from 2004 to 2009.
Radamel Falcao Colombian striker Falcao suspected of failing to correctly declare €7.4m of income earned from image rights between 2012 and 2013 while at Atletico Madrid. He has since paid €8.2m to Spanish tax authorities, a sum that includes interest on the original amount.
Jorge Mendes Portuguese super-agent put under official investigation last month by Spanish court investigating alleged tax evasion by Falcao, a client of his. He defended himself, telling closed-door hearing he "never" advised players in tax matters.
SPECS
Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now
Elvis
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In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
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The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
What you as a drone operator need to know
A permit and licence is required to fly a drone legally in Dubai.
Sanad Academy is the United Arab Emirate’s first RPA (Remotely Piloted Aircraft) training and certification specialists endorsed by the Dubai Civil Aviation authority.
It is responsible to train, test and certify drone operators and drones in UAE with DCAA Endorsement.
“We are teaching people how to fly in accordance with the laws of the UAE,” said Ahmad Al Hamadi, a trainer at Sanad.
“We can show how the aircraft work and how they are operated. They are relatively easy to use, but they need responsible pilots.
“Pilots have to be mature. They are given a map of where they can and can’t fly in the UAE and we make these points clear in the lectures we give.
“You cannot fly a drone without registration under any circumstances.”
Larger drones are harder to fly, and have a different response to location control. There are no brakes in the air, so the larger drones have more power.
The Sanad Academy has a designated area to fly off the Al Ain Road near Skydive Dubai to show pilots how to fly responsibly.
“As UAS technology becomes mainstream, it is important to build wider awareness on how to integrate it into commerce and our personal lives,” said Major General Abdulla Khalifa Al Marri, Commander-in-Chief, Dubai Police.
“Operators must undergo proper training and certification to ensure safety and compliance.
“Dubai’s airspace will undoubtedly experience increased traffic as UAS innovations become commonplace, the Forum allows commercial users to learn of best practice applications to implement UAS safely and legally, while benefitting a whole range of industries.”
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
