Islamabad: Deputy Prime Minister and Foreign Minister Ishaq Dar announced today that the United Arab Emirates (UAE) will acquire shares in the Fauji Foundation Group to settle a $1 billion external liability owed by Pakistan. The transaction, expected to be finalized by March 31, 2026, aims to convert a previous UAE rollover deposit into equity investment, providing immediate relief to Pakistan’s strained foreign reserves amid ongoing economic challenges. Dar described the deal as a significant boost to bilateral ties, following the recent visit of UAE President Sheikh Mohamed bin Zayed Al Nahyan on December 26. During the visit, discussions focused on deepening economic cooperation, with assurances of an additional $2 billion loan rollover.
The Fauji Foundation, a military-affiliated charitable trust managing a vast conglomerate valued at billions, operates in sectors including fertilizers, cement, power, food, and banking. Its assets primarily benefit ex-servicemen and their families, though it functions independently of direct government ownership.The announcement has ignited debate over the implications of involving a foreign entity in a foundation closely tied to Pakistan’s military establishment. Critics argue that offering shares in such a strategic conglomerate raises questions about sovereignty and the use of non-state assets to address government liabilities.Pakistan Tehreek-e-Insaf (PTI) economic spokesperson Muzzammil Aslam questioned the deal on X (formerly Twitter), highlighting that the Fauji Foundation is not a state-owned entity. “How can shares of a private welfare trust be used to settle government debts?” Aslam posted, implying potential misuse of assets meant for military welfare. Supporters, including government officials, view the arrangement as pragmatic, easing balance-of-payments pressures without immediate cash outflows.
Dar emphasized Pakistan’s improving diplomatic standing and financial support from allies like the UAE, China, and Saudi Arabia. Analysts note that the deal reflects Pakistan’s reliance on friendly Gulf nations for rollovers and investments, as the country navigates IMF conditions and privatization drives. However, concerns persist about long-term foreign influence in sensitive economic sectors.The transaction underscores Pakistan’s delicate economic tightrope, balancing short-term stability with debates over national assets and institutional autonomy.