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UAE allocates $200m to support economic projects in Pakistan

Last week, Pakistan pulled out of summit in Malaysia under pressure from Saudi Arabia, which has given Islamabad billions in economic aid
Pakistan's premier is conflicted by needing financial aid from UAE and Saudi Arabia, while trying to maintain his country's independence (AFP/File photo)

The oil-rich United Arab Emirates (UAE) has allocated $200m to support small- and medium-sized economic projects in Pakistan, its state news agency said.

Abu Dhabi's Crown Prince Mohammed bin Zayed (MBZ), de facto ruler of the UAE, was in Pakistan's capital Islamabad on Thursday meeting Prime Minister Imran Khan when the Emirates News Agency (WAM) made the announcement.

According to the news agency, MBZ ordered the United Arab Emirates Khalifa Fund for Enterprise Development to allocate the funds to help develop Pakistan's entrepreneurship and innovation sector.

Last year, the UAE began the implementation of the UAE-Pakistan Assistance Programme, a similar $200m initiative, to create 40 or so humanitarian and development projects.

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The programme aims to assist the development of various sectors in the South Asian nation, including food assistance and clean drinking water programmes, anti-polio vaccination campaigns and the construction of a 42km (26 mile) highway in the Balochistan region.

Since his election in 2017, Khan has worked to obtain necessary funds to address Pakistan's financial difficulties.

The country has secured more than $9bn in loans from Saudi Arabia, the UAE and China, while also imposing painful austerity measures in order to tap into a $6bn bailout by the International Monetary Fund.

The aid he is receiving, however, has come at huge political cost, analysts say.

Last week, he decided to pull out of a summit of Muslim countries in Malaysia after coming under pressure from Saudi Arabia, a country that has given Khan's government billions in economic aid.

The Pakistani premier is trying to pull off a tricky balancing act, between needing billions in financial support from the UAE and Saudi Arabia, yet also striving to assert his country's independence.

Khan told MEE in late 2018 in the aftermath of Jamal Khashoggi's murder, that he was shocked by the journalist's killing, but his country needed to prioritise relations with Riyadh because of its financial situation.