Thursday, October 9, 2008

Pakistan to Dubai ! Pakistanis invest in Dubai !

Pakistan’s rich invest $1 billion in Dubai show

KARACHI, Oct 8: Pakistani investers hopped over the Gulf to look into the posibilites of investing in Dubai after the recent debacle of the Pakistani Stock Market. Reports from UAE Cityscape exhibition speculate that Pakistanis ended up buying $1 billion worth of property in and around Dubai.

There have also been reports of capital outflow from Pakistan to Dubai during this exhibition mainly for buying business locations in Dubai . Cityscape being held at Dubai International Exhibition Centre from Oct 6 to 9.

Cityscape is said to be the biggest exhibition event of construction business anywhere in the world and attracts investors from all corners.“More than 40,000 visitors from all around the world, including Pakistanis thronged the exhibition in the last two days and invested in various projects ’’ a top Pakistani builder who is a regular visitor for the last seven years said "the Pakistani interest was unprecedented".

The exhibition was initially scheduled to close on Wednesday but has been extended till Thursday because of big response from investors from all around the world. One invested at the show said that, "Over one billion dollars investment is said to have been made in the last two days in booking of construction projects". Another Karachi businessman affiliated to the UAE company estimateed that the final investment figures will exceed $2.5bn, of which “at least 10 per cent will be from Pakistani investors.”

Sponsors of the UAE exhibition include over a dozen world’s top construction companies that operate on global level. One of these companies was given a contract for development of 4,000 acres of sea front in Karachi which evoked a considerable protest from human right activists as project involved dislocation of thousands of poor fishermen and other people from coastal areas.A well known high profile stock broker from Karachi announced the launching of 16 towers construction project in the exhibition.

The outflow of capital from Pakistani goes on unabated for the last several months amid reports of deepening crisis of financial sector and wild rumours on viability or sustainance of the previous financial policies . One businessman commented on the scenario after the Pakistani Rupee went on a free fall “It is yet to be seen if the statement given on Tuesday by the Governor of State Bank of Pakistan is able to revive sagging confidence of people in banks and financial sector. But there is no hope this time’’.

Estimates of capital outflow from Pakistan, mostly to Dubai, in the last 10 to 11 months after January of 2008 varies from $4 billion to $30 billion.

A top builder from Pakistan said about the massive outflow cash from Pakistan, "Where did the money go form the stock market ? There were $70 billion in it. Its all gone. Its ended up in Dubai". He speculated that the outflow is around $30 billion which is almost 20 per cent of Pakistan’s total economy.

Businessmen blame financial haemorrhage which just took over and sat 6 months. A Businessman summed it up by saying, "The new Govenment took over and sat idle. Ishaq Dar was given the ropes of the financial ship. Dar's had no policies. He didn't want to continue the
present policies and did not have his own. He came and blamed the previous government for the ills. He presented a scenario that the previous Government was faking economic successes. He rocked the ship. After a month of his being finance minister the Rupee dropped to Rs. 70 and the KSE index went down to 10,000 from 18,000. Moody and Poors dropped Pakistans ratings. Government totally lost confidence and after the departure of President Musharraf the Stock Market took a free fall as if there was no tomorrow. The government’s inability to act evaporated the sense of security and the investors pulled out from Pakistan and the Stock Market. Now the Rupee is almost Rs.80 to a dollar and there is no hope. We were almost on the boat. Now the boat has sunk".

A builder pointed out that “In the last eight years, we had Shaukat Aziz as our finance minister and then the prime minister. He was former banker and knew how to pull money into Pakistan. We had a constant inflow of investment for 8 years and development. Now its the other way round. Money has vanished. It went to the US and EU but after the financial debacle there its all in the Middle East. Some Pakistani's are not shy of trading with India via Dubai".

Many top Pakistani business houses have shifted their offices in Dubai and are involved in roaring cross-country trade.A few Pakistani businessmen are jointly working with Indians in business and making a fortune. Back home in Pakistan, there are many hurdles in doing business with India.

A Pakistani invester commented, "Right now there is no hope of improvement ! We have lost 10 years. This government should have kept the policies of the previous government intact for a while. We call it the - Dar Effect". Shaukat Tareen are you listening ?

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