“Pakistan’s chronic debt malaise: Why Abu Dhabi’s patience is wearing thin”, First Post, April 06, 2026
“It seems Pakistan is in the basket again. Its own reports note that the country has decided to return $3.5 billion in debt to the UAE by the end of the month to retain its ‘dignity’. That’s going to blow a large-sized hole in their forex reserves. Diplomatic tensions have been going on for some time, but the fact that Abu Dhabi chose to turn the screws indicates a larger unease with Islamabad’s policies in a highly complicated neighbourhood. This is a layered relationship, and no one reason is behind this.
The UAE Once Bet Big on Pakistan
The UAE has long been a major economic partner to Pakistan, providing it with loans, and more importantly, it is one of the largest investors in the country. Taken together, it’s rather formidable. Its foreign ministry notes investment in telecommunications, banking, real estate and oil sectors, while state companies have contributed to stabilising the country by purchasing shares in Pakistani companies offered for privatisation.
For instance, the Abu Dhabi Group purchased Al Falah Bank and UBL Bank. Emirati Telecommunications also purchased some shares of the Pakistan Telecommunications Company for an amount exceeding $2 billion, while the Abu Dhabi Ports Company signed a framework agreement for the operation and development of Karachi Port Trust. Total investments are some $10 billion. Apart from this was a rolling deposit of $2 bn to shore up its monetary support in terms of the requirements of the International Monetary Fund (IMF). The UAE irritation was, however, apparent as the terms of the loan steadily increased from about 3 per cent to 6 per cent, even while the term was extended last year to months rather than the usual annual rollover. Apart from that was the withdrawal from the plan to operate Islamabad International Airport because it could not find a competent local operator……”
Read full article at firstpost.com
