Pakistan Shifts Focus from Aid to Trade, Eyes Deeper Economic Ties with Gulf States

Pakistan is reshaping its economic strategy, moving away from dependence on foreign aid and turning toward trade and investment partnerships especially with Gulf countries. The shift reflects Islamabad’s push for long-term, self-sustaining growth.

“No More Aid, Only Economic Partnerships”

Finance Minister Muhammad Aurangzeb outlined the new direction in an interview with CNN Business Arabia, saying Pakistan no longer wants aid-based assistance. Instead, the government aims to strengthen exports and attract foreign direct investment to support economic growth and job creation.

“We are not looking for aid flows anymore,” Aurangzeb said, while acknowledging the long-standing support of Gulf nations. He stressed that future relations with Gulf Cooperation Council (GCC) countries would be built on mutually beneficial trade and investment rather than financial assistance.

Improving Economy Enables the Shift

The finance minister said Pakistan’s improving economic indicators have made this transition possible. Inflation, which peaked at 38 percent in 2023, has now dropped to single-digit levels. Fiscal discipline has strengthened, while foreign exchange reserves have improved to cover about 2.5 months of imports.

He also pointed out that all three major international credit rating agencies have upgraded Pakistan’s outlook this year, signaling growing confidence in the country’s economic recovery.

Gulf Remittances and Investment Talks Gain Pace

Aurangzeb highlighted the strong role of the Gulf region in Pakistan’s economy, noting that remittances from GCC countries reached $38 billion last fiscal year and are expected to rise to $42 billion this year.

He revealed that negotiations for a free trade agreement with the GCC are at an advanced stage. At the same time, discussions are ongoing with Gulf investors in key sectors such as energy, technology, mining, and agriculture.

A Long-Term Economic Vision

Officials say the new approach reflects Pakistan’s broader vision to build a resilient economy based on trade, investment, and productivity reducing reliance on aid and strengthening regional economic partnerships.