Deputy PM says Pakistan seeks to convert $1 billion UAE deposit into investment

Deputy Prime Minister and Foreign Minister, Ishaq Dar chairs a committee meeting to review progress on the special package for Overseas Pakistanis, on September 12, 2025. (Foreign Office/File)
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Updated 28 December 2025
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Deputy PM says Pakistan seeks to convert $1 billion UAE deposit into investment

  • Ishaq Dar says the UAE will acquire shares in Pakistani companies using the amount, with transaction to be completed by March 31
  • The UAE’s remaining $2 billion in deposits, part of funds used to shore up Pakistan’s foreign reserves, are due for rollover in January

ISLAMABAD: Pakistan is seeking to convert part of its financial support from the United Arab Emirates into long-term investment to reduce external debt, Deputy Prime Minister Ishaq Dar said on Saturday, following talks with UAE President Sheikh Mohamed bin Zayed Al Nahyan during his visit to Islamabad.

Dar said Pakistan was engaged with the UAE on converting $1 billion in deposits into equity investment, potentially involving stakes in companies linked to the Fauji Fertilizer Group, a move that would end Pakistan’s repayment obligation on that portion of the funds.

The UAE has been one of Pakistan’s key financial backers in recent years, providing $3 billion in deposits to the central bank as part of a broader effort to stabilize the country’s external finances and unlock support from the International Monetary Fund.

Speaking at a year-end briefing, Dar said Pakistan had already begun discussions with the UAE on rolling over the first $1 billion tranche, but Islamabad now wanted to replace short-term borrowing with investment.

“They will be acquiring some shares, and this liability will end,” Dar said, adding that discussions were under way for the transaction to be completed by March 31.

Dar said the Fauji Foundation Group was taking the lead in the process, with plans for partial disinvestment by Fauji-linked and other companies to facilitate the deal.

He added that Pakistan also raised the issue of a separate $2 billion rollover due in January during talks with the UAE leadership, saying Islamabad had conveyed that converting debt into investment would be preferable to repeated rollovers.

The issue was discussed during Al Nahyan’s visit, which Dar described as cordial, adding that the UAE had expressed willingness to expand its investment footprint in Pakistan.

Pakistan has relied on repeated rollovers of deposits from friendly countries to manage its balance-of-payments pressures, a practice economists say provides short-term relief but adds to debt vulnerabilities unless replaced with foreign direct investment.

The country acquired $5 billion from Saudi Arabia and $4 billion from China, which, along with the UAE, helped shore up its foreign reserves and meet IMF conditions at a time when its external account was under severe pressure.

Dar said Pakistan was now focused on shifting from temporary financing toward longer-term capital inflows to stabilize its economy and reduce reliance on external borrowing.


11 killed, at least 60 missing after huge Karachi shopping plaza blaze

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11 killed, at least 60 missing after huge Karachi shopping plaza blaze

  • Videos showed flames rising as firefighters labored through Sunday night to stop fire that started on Saturday 
  • Firefighters said lack of ventilation in the ‌mall caused the building to ‌fill ⁠with ​smoke ‌and slowed rescue efforts

ISLAMABAD: The provincial government of Sindh has ordered an official inquiry after a fire at a major shopping plaza in the port city of Karachi killed 11 people and destroyed more than 1,200 shops, officials said on Monday, dealing a severe blow to one of the city’s busiest commercial districts.

The blaze broke out late Saturday at Gul Plaza in Karachi’s Saddar business area and spread rapidly through multiple floors, according to emergency officials. Firefighters battled flames for hours to bring the fire under control, which was still blazing late into Sunday night.

Deadly fires in commercial buildings are a recurring problem in Karachi, a city of more than 20 million people, where overcrowding, outdated infrastructure and weak enforcement of fire safety regulations have repeatedly resulted in mass casualties and economic losses.

“Karachi fire death toll rises to 11,” said Chief Police Surgeon for Karachi Dr. Summaiya Syed Tariq.

“The fire has been extinguished but light smoke is still rising and the recovery of bodies has now begun,” says Muhamamd Amin, an official of Edhi present on the spot.

Taking notice of the incident, Chief Minister Murad Ali Shah on Sunday evening directed the Karachi commissioner to launch an immediate inquiry and examine whether safety failures or regulatory lapses contributed to the scale of the disaster.

“Fire safety arrangements in the building must be checked, and strict action should be taken against those responsible if negligence or carelessness is proven,” Shah said in a statement.

The cause of the fire has not yet been determined. Police said a formal investigation would begin once firefighting operations were fully completed.

Officials briefed the chief minister that more than 1,200 shops were gutted in the fire, wiping out inventories and investments built over decades.

Firefighting operations managed to bring 60 to 70 percent of the blaze under control, while rescue and cooling operations continued well into Sunday. One firefighter was among the six who died.

Speaking to reporters later on Sunday, Shah provided new details on the scale and timeline of the emergency response, saying municipal authorities acted within minutes of receiving the alert.

“The first fire tender reached the site at 10:27 p.m. and firefighting operations began immediately,” the chief minister said, adding that at least 26 fire tenders, four snorkel vehicles and 10 water bowzers were deployed, with additional support provided by the Pakistan Navy and the Civil Aviation Authority.

Shah said preliminary information indicated that 58 to 60 people were initially reported missing after the blaze, though rescue and cooling operations were still underway and authorities were continuing to verify the figures. He added that the fire occurred during the peak wedding shopping season, compounding losses for traders and shoppers in the area.

He said the intensity of the blaze and limited access points inside the building made it difficult for firefighters to enter quickly, contributing to the scale of damage.

$10 MILLION LOSSES

The fire tragedy has also triggered urgent concern within Karachi’s business community.

The Karachi Chamber of Commerce and Industry (KCCI) announced the formation of a dedicated committee to coordinate relief efforts, document losses and press the government for compensation and rehabilitation of affected traders.

KCCI said preliminary assessments showed that over 1,000 small and medium-sized businesses had been completely destroyed, leaving many families without income. The chamber appealed to both provincial and federal authorities to announce a special compensation package, citing precedents such as the 2009 Bolton Market arson, after which funds were approved to rebuild fire-hit markets and compensate nearly 2,000 affectees.

Ateeq Mir, a traders’ representative, estimated that losses to businesses from the fire would be over $10 million. 

“There is no compensation for life but we will try our best that the small businessmen that have encountered losses here, we will try in a transparent manner … to compensate their losses,” Chief Minister Shah told reporters.

Separately, Prime Minister Shehbaz Sharif held a telephone conversation with Shah on Sunday evening, the premier’s office said, to offer full federal support to provincial authorities.

Sharif said a “coordinated and effective system is essential” to control fires quickly in densely populated urban areas and stressed the need for stronger preventive mechanisms to avert similar tragedies in the future. He said the federal government was prepared to work with provincial authorities to help establish an integrated fire-response and safety framework, adding that Islamabad stood with the affected families and the Sindh government during the crisis.

Battling large fires in Karachi’s dense commercial districts is notoriously difficult, reflecting a mix of urban congestion, weak regulation, and chronic enforcement failures. Many markets and plazas are built with narrow access points, encroachments and illegal extensions that block fire tenders and delay rescue operations, while buildings often lack functional fire exits, sprinklers or alarm systems. 

Although safety regulations exist on paper, inspections are sporadic, and penalties rarely enforced, allowing hazardous electrical wiring, overloaded circuits and flammable materials to go unchecked. In such tightly packed areas, fires can spread rapidly from shop to shop and floor to floor, leaving firefighters little room to maneuver and sharply increasing the risk to both occupants and emergency crews.