Discussions about Middle Eastern investment have been ongoing for the past two to three years, but now we’re beginning to see early signs of actual inflows. Last week, First Women Bank Limited (FWBL) was acquired by the UAE giant International Holding Company (IHC). About a year ago, Saudi oil giant Aramco bought a small Oil Marketing Company (OMC) in Pakistan.

While the transactions’ sizes are modest, they indicate major Middle Eastern groups positioning themselves in Pakistan. The FWBL deal, valued at $14.6 million, is a rounding error for IHC, which boasts a market capitalization of $240 billion. Still, the valuation is sound — Rs5 billion against a net equity of Rs3.2 billion.

With such big names stepping in, does the government’s optimism about Middle Eastern investors seem justified? Is the tide finally turning? Is this the dawn of a new era for Gulf investment, or just a series of isolated cases?

Following the defence pact with Saudi Arabia, there appears to be a serious Saudi interest. Government-to-government packages are advancing, and business-to-business engagements are growing steadily. Islamabad is hopeful of emerging from IMF programmes on the strength of Middle Eastern loans and investments.

The geopolitical dividend may come from enhanced economic cooperation between........

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