Dubai is in trouble. The pearl of the Persian Gulf whose fame and fortune washed distant shores is suddenly losing its lustre. Dubai World, a major investment company in Dubai and the jewel in the city-state’s crown, has run up an astounding $60bn debt.
The conglomerate is unable to meet its scheduled debt repayments and has sought a suspension. So much for its boast that ‘the sun never sets on Dubai World’. Dubai World claims to be one of the largest holding companies in the world, with its investment portfolio spreading across 100 cities and encompassing industries and sectors ranging from ports management, property development, hospitality and tourism, free -zone operations and private equity investment.
Neither the governments of Dubai nor Abu Dhabi are willing to guarantee repayment of the debt. Abu Dhabi has, however, indicated partial help to its sister emirate. To further allay fears the UAE’s Central Bank has created a fund to provide banks with additional liquidity.
The impact of Dubai’s financial crisis on Pakistan is expected to be minimal. Remittances and trade could be marginally affected, as also Pakistani banks in case these have extended loans to any of the delinquent entities. Dubai-owned companies with operations in Pakistan might be vulnerable.
On an individual basis Pakistanis employed in industries and businesses owned by Dubai World could be laid off as the company embarks on a restructuring programme.
Separately, and unrelated to Dubai World but aggravated by it, quite a few Pakistanis who made investments in real estate in Dubai and the adjoining emirates are likely to have suffered serious financial setbacks.
It is a sad commentary on the investment environment in Pakistan that Pakistani investors opt to invest abroad rather than in their own country. When your own nationals are shy to invest in Pakistan, it would be doubly difficult to persuade foreigners to bring their funds to Pakistan.
Dubai has over decades become a part of Pakistan’s folklore. It has found its way into Pakistani literature, drama and films. It came to symbolise hope, opportunity, wellbeing and even opulence.
For two principal reasons Dubai was different from the other El Dorados sought by Pakistanis.
Geographically, it was closest to Pakistan and the locals spoke or at least understood a variant of Urdu. So the adjustment to the new clime was comfortable. As a bonus many Dubai Arabs had had a prolonged exposure to Pakistan through business, not always above board, falconeering and studies. They had developed a soft corner for the country and its people.
This was demonstrated by its shrewd but wise ruler and the founder of modern Dubai Sheikh Rashid bin Saeed Al Makhtoum when he gifted prime land for the Pakistani consulate general in Dubai and followed up with funds for the construction of the premises at Khalid bin Waleed Road.
The ‘push and pull’ factor carried thousands of Pakistanis to Dubai. The surplus petro-dollars and the need to build everything from houses and buildings to roads and bridges served as a magnet for Pakistanis from its economically depressed towns and cities. ‘Dubai Chalo’ (Let’s head for Dubai) became the rallying cry for myriads of Pakistanis of all skills and even those without any.
The government of Prime Minister Zulfikar Ali Bhutto in the 1970s responded with its customary alacrity in meeting the aspirations of its citizens.
Passports which were as difficult to obtain as a British visa nowadays could be had within 24 hours. Procedures both within Pakistan and in Pakistan missions abroad were streamlined to facilitate employment of Pakistanis in Dubai as also the other Arab states awash with oil revenues.
Dubai was not just the destination of different categories of workers. It also hosted many Pakistani business tycoons, some falling in the category of Dr Mahbub ul Haq’s 22 families as well as businessmen cum politicians unhinged by Bhutto’s egalitarian transformation of post-1971 Pakistan.
Even though Dubai’s current financial travails might not have cast their menacing shadow over Pakistan, the latter’s ties with the emirate are too old and too intertwined for Pakistanis to be immune to the pain and anguish of the government and the people of Dubai.
A lot of Pakistani sweat, and at times blood, has gone into the making of modern Dubai, not to mention the ‘Dubai Syndrome’, a psychological malady involving emotional and physical deprivation caused by prolonged absence of menfolk from their wives and children.
Against all odds, the people of Dubai and their rulers transformed a backwater entrepot, which in the 1970s essentially had two main roads and a bridge over the creek, into a pulsating modern state. They worked with their tribal cousins, the Nahyans, to create and sustain for the past 38 years the federation called the United Arab Emirates. These very people who have such major accomplishments to their credit are willing and capable of overcoming the present crisis.
The UAE, with its capital in oil-rich Abu Dhabi, cannot afford to allow the contagion to spread. In the coming months Dubai, with moral and material support from the other constituents in the federation, is likely to amply demonstrate its buoyancy. Pakistan and Pakistanis, estimated to be well over a million in the UAE, should do everything they can to hasten the process.
ghazalakhan27@hotmail.com
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