Another very good direct investment. well done.
Dubai to invest over $30b in Pakistan
BY ISAAC JOHN (Chief Business Reporter)
1 June 2006
DUBAI — Leading Dubai business groups including Emaar and Dubai World yesterday announced in Islamabad investment commitments totalling more than $30 billion, which along with some $4 billion investments already committed by Etisalat and DP World recently, will account for nearly one-third of Pakistan’s gross domestic product (GDP) of $118 billion.
This phenomenal investment plans by Dubai groups in various property and industrial projects also signal the dawn of a new era of foreign direct investment flow into Pakistan, which last year attracted only $2 billion in FDI.
In addition to the investment programmes unveiled by Emaar and Dubai World, Dubai Islamic Bank yesterday also committed an investment to its operations in Pakistan, and said it will open 70 branches in the next 18 months. A Memorandum of Intent was signed between DIB and the State Bank of Pakistan to open the branches in the next 18 months.
The landmark investment commitments, made during the visit of His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, and Ruler of Dubai, comes close on the heels of an upgrading of Pakistan’s foreign-currency ceiling by two notches from B2 to Ba3, by Moody’s, and an upbeat economic forecast of 8 per cent growth made by Prime Minister Shaukat Aziz on record foreign investment and rising consumer spending. While Emaar Properties will spend $20.4 billion in real estate development in Karachi, Dubai World unveiled a $10 billion investment plan across different industries including infrastructure developments, industrial and real estate projects.
Yesterday, Emaar signed $18 billion accord with Port Qasim Authority to build a mixed-use development comprising homes, hotels and golf courses in Karachi, and announced three real estate developments in Islamabad and Karachi involving investment of $2.4 billion. These developments include a series of master planned communities that will set new benchmarks in commercial, residential and retail property within Pakistan.
Islamabad is home to two Emaar Pakistan projects — the Highlands and Canyon Views. With 1,500 acres between them the Islamabad communities offer 9,000 luxury single-family town homes and villas in a range of architectural styles with easy access to amenities including retail centres, community club houses, parks, lakes, schools and mosques.
Karachi will be home to Crescent Bay, a 75-acre development featuring high- and mid-rise towers for residential and commercial use, a shopping centre and five-star beachfront hotel. The towers will contain approximately 4,000 residential apartments.
Mohammed Ali Alabbar, Chairman, Emaar Properties said Pakistan represented a vital link in Emaar’s global and regional plans.
“These current projects are only a small and initial part of our commitment to providing world-class living and infrastructure in Pakistan. Pakistan will play an important role in the development of Emaar’s reputation in Asia, and remains one of our most significant commitments outside of the UAE,” Alabbar said.
Dubai World’s projects include construction of a modern waterfront off the Karachi coastline, besides the management and development of Pakistani Ports. DP World has already made a commitment of $1.6 billion to develop Gwadar Port. Early this year, UAE’s telecoms giant Etisalat concluded a landmark $2.6 billion acquisition of a 26 per cent stake in Pakistan telecoms firm PTCL.
Pakistan’s economy expanded 8.4 per cent in the year to June, the fastest pace in two decades. Pakistan’s long-term foreign-currency rating was raised in November 2004 by a level to B+, or the fourth non- investment grade, by Standard & Poor’s, after lowering to within two levels of default status in October 1998 after the country tested nuclear weapons and attracted sanctions including a ban on aid and loans from countries in Europe and the United States. Now Pakistan has foreign-exchange reserves of $13 billion, helped by record overseas direct investment of $3 billion in the 10 months to April 30.