Pakistan’s rich invest $100m in Dubai real estate show

[Naveed Yaseen]

By Sabihuddin Ghausi
KARACHI, Oct 8: More than 100 Pakistan’s super rich persons — stock brokers, bankers, textile tycoons, cement barons, builders and developers, retired civil and military bureaucrats and practicing professionals (doctors, chartered accountants and lawyers) — are said to have invested more than 100 million dollars (Rs7.5 billion) in booking construction projects during the last two days in the UAE Cityscape exhibition being held in Dubai.

This report of outflow of capital from Pakistan to Dubai construction business is being brought by a few businessmen who participated and visited the 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 a good number of Pakistanis, thronged the exhibition place in the last two days and booked their investment for projects in the offices of the construction companies,’’ a top Pakistani builder who is a regular visitor for the last seven years said on Wednesday.

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.

Over one billion dollars investment is said to have been made in the last two days in booking of construction projects.

The returning visitors from UAE Cityscape exhibition to Karachi estimate the final investment figures will exceed $2.5bn, of which “at least 10 per cent will be from our 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 in the name of his close relative.

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 of few banks in the country.

“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,’’ the businessman said.

Estimates of capital outflow from Pakistan, mostly to Dubai, in the last 10 to 11 months after Nov 3, 2007, emergency promulgation varies from $30 billion to $4 and 5 billion.

A top builder is convinced of massive outflow of $30 billion which is almost 20 per cent of Pakistan’s total economy.

A few economists hold stock brokers from taking out hot money which in any case should not be more than four or five billion dollars.

Businessmen say whatever is the amount of capital outflow from Pakistan in the last 11 months, the main reason for this financial haemorrhage is government’s inability to create a sense of security among its citizens and investors.

“In the last eight years, we had Shaukat Aziz as finance minister and prime minister,’’ the builder said who pointed out that after ceasing to hold any office of authority Mr Shaukat Aziz is no more in Pakistan.

He never brought back his assets in Pakistan. Even the present elected leaders have their property in Dubai, London and New York and may be in many other parts of the world.

Let these leaders bring back their assets to Pakistan where they rule and command people to create confidence in businessmen.

“Such a gesture from elected leaders will be more convincing and effective rather than a statement from Governor of State Bank of Pakistan or any state functionary,’’ he declared.

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 good money. Back home in Pakistan, there are many hurdles in doing business with India and with Indians.

http://www.dawn.com/2008/10/09/ebr5.htm