UAE’s Economic Rise: Opportunities for Pakistan

28 March 2024

Published in: Pakistan Observer

In fewer than fifty years, the United Arab Emirates (UAE) has evolved from a small rentier state administered by the United Kingdom to a modern society with a diverse economy and a strong regional presence as well as a worldwide network of friends and partners. The once-divided and marginalized state is seen today as a rising middle power with the second-largest Arab economy. In the international arena, the UAE has clear ambitions: rather than being known just as a regional power, it aims to be more like Singapore, wielding technological and economic power that is greatly disproportionate to its size. But the story of UAE’s development is not complete without the mention of the Pakistani Diaspora played a vital part in its growth, particularly in sectors such as health, construction and education. On top of a deeply entrenched Pakistani Diaspora, UAE being the largest source of remittance for Pakistan and the third largest trading partner Diaspora signify strong Pak-UAE relations and situates Pakistan in a perfect position to leverage the rise of the UAE for the benefit of both nations.

The UAE’s remarkable technological ascent and economic diversification sprout from a heterogeneous approach cov-ering strategic initiatives and progressive policies. Key among these is substantial investment in cutting-edge infra-structure, spanning transportation, telecommunications and airports, laying a solid groundwork for both economic expansion and technological advancement. Moreover, concerted diversification efforts outlined in Vision 2021 and Vision 2030 have propelled the UAE away from oil dependency towards sectors like tourism, finance, real estate, renewable energy and technology. Even though oil and gas revenues still account for 15 percent of its GDP, its share in the composition of the economy is markedly less than other GCC states.

Initiatives like the Smart Dubai Initiative and Abu Dhabi Economic Vision 2030 further underscore the UAE’s com-mitment to leveraging technology for efficiency gains, enhancing government services and fostering knowledge-based industries, solidifying its position as a global innovation leader and premier investment destination in the MENA re-gion. According to the recent United Nations’ Technology and Innovation Report, the UAE is the leading Arab coun-try in technology and is ranked 37th out of 166 countries. Moreover, the UAE has also emerged as a thriving entre-preneurial hub with more than 40% of the country’s start-ups being technology-based. The prime example in this re-gard is Careem that was acquired by Uber for $3.1billion in 2019.

The increasing focus on the knowledge-based economy and technology in the UAE offers significant opportunities for Pakistan. With Pakistan producing 20,000 IT graduates annually, there’s a pool of talent ready to tap into these oppor-tunities. The migration of skilled workers to the UAE not only benefits the individuals themselves but also benefits Pakistan’s perennial current account deficit through remittances. On the flip side, UAE’s financial institutes can also invest in Pakistan’s budding IT sector, which has a huge upside potential, with up to 100 percent growth recorded last year. Besides, these investments would also ease the constraints faced by Pakistan in accessing the financial resources required to invest in advanced technologies, infrastructural development, and technology acquisition.

Furthermore, investment by the Pakistani Government in education and skills development programs tailored to emerging technologies can prepare Pakistan’s workforce to effectively leverage UAE’s technological advancements as the country currently lacks the expertise in sectors such as artificial intelligence, and advanced manufacturing. These education programs can include vocational training, STEM education initiatives and scholarships for advanced studies in relevant fields.

Additionally, the UAE relies heavily on food imports to meet the needs of its rising population. Investing in agricul-tural opportunities in Pakistan could indeed align well with the UAE’s National Food Security Strategy 2051, particu-larly in terms of diversifying food import sources. The Special Investment Facilitation Centre (SIFC) could play a crucial role in facilitating such investments by showcasing the agricultural investment potential in Pakistan to UAE investors. This move could enhance food security for the UAE while also fostering economic cooperation between the two countries.

Moreover, Pakistan can learn from the UAE’s success in developing a thriving tourism and hospitality industry. By following the UAE and promoting its rich cultural heritage, natural beauty and historical landmarks, Pakistan can at-tract tourists from all over the globe.

In conclusion, the relationship between Pakistan and the United Arab Emirates (UAE) stands poised for further growth and collaboration across various sectors. The UAE’s remarkable transformation into a global economic power-house, fuelled by visionary policies and strategic investments, presents abundant opportunities for Pakistan to lever-age. Furthermore, there are abundant areas in which closer cooperation can benefit and be a win-win situation for both nations.