Opportunities from ties with Kuwait

Pakistan and Kuwait share a longstanding and cordial relationship that has strengthened over time. Both countries have consistently demonstrated commitment to each other's development and prosperity. Their friendship has stood the test of time, proving their sincerity on multiple occasions.

During Iraq's invasion of Kuwait, the Pakistani community stood firmly with their Kuwaiti counterparts, refusing to leave the country. More recently, during the Covid-19 pandemic, Pakistan facilitated the supply of essential food items, such as meat, amid global disruptions.

Kuwait, in turn, has repeatedly extended its support to Pakistan during times of crisis. In 2005, the Kuwaiti government provided $100 million in aid for earthquake-affected areas, particularly in Kashmir. Notably, Kuwait allowed Pakistan to allocate the funds according to its needs and priorities.

Similarly, in 2010, Kuwait lifted a ban on public donations to support Pakistan's flood victims, further solidifying its role as a trusted partner. These instances highlight Kuwait's special relationship with Pakistan.

The leadership of Kuwait remains keen on strengthening bilateral ties, especially in economic, trade, and defence cooperation. In this regard, Kuwait appointed Nassar Abdulrahman J Almutairi as its Ambassador to Pakistan. A strong advocate for Pakistan, he has made sincere and effective efforts to enhance economic relations and attract investment. His commitment reflects Kuwait's broader vision to deepen its engagement with Pakistan.

A closer look at economic and investment ties between Pakistan and Kuwait reveals a series of success stories that have significantly contributed to both countries' growth.

Pakistan and Kuwait established Pakistan-Kuwait Investment Company (PKIC) in 1979 as a development financial institution. Initially launched with 62 million Pakistani rupees, PKIC has since expanded to Rs16 billion, with a total equity of Rs49.94 billion. Over the years, it has grown to hold assets worth Rs20 billion.

PKIC has successfully invested in several key projects, including Meezan Bank, Al-Meezan Investment Management Limited, and the National Clearing Company of Pakistan Limited. These investments underscore Kuwait's commitment to Pakistan's economic growth.

Another key player in Pakistan's economic landscape is EnerTech Holding Co, a subsidiary of the Kuwait Investment Authority. Focused on energy, clean technology, recycling, and water management, EnerTech has invested $190 million in the Nabisar-Vagihar water supply project in Thar, Sindh.

The Kuwait Foreign Petroleum Exploration Company (Kufpec) has also maintained a strong presence in Pakistan for years. A subsidiary of Kuwait Petroleum Corporation, Kufpec has invested nearly $1 billion in Pakistan's energy sector.

It holds stakes in major gas fields, including Qadirpur (13.25%), Bhit/Badhra (34%), Kadanwari (15.79%), and Zamzama (9.375%). It also operates the Makhad Block with an 82.5% working interest. Currently, Kufpec is focusing on expanding its investment to support Pakistan's oil and gas exploration efforts.

The Kuwait Fund for Arab Economic Development has been another major contributor, providing $428 million in financing for Pakistan's social sector, water conservation, and energy projects since 1977.

Kuwait is also home to a significant Pakistani expatriate community. Nearly 100,000 Pakistanis reside in Kuwait, with 70% working as unskilled labourers. Remittances from Kuwait to Pakistan amount to approximately $1 billion annually, reflecting the economic contribution of Pakistanis working in the Gulf state.

During the Covid-19 pandemic, both countries agreed to enhance labour cooperation, with Pakistan set to send 5,000 doctors and medical staff to Kuwait. This move is expected to further increase remittance inflows in the coming years.

Building on these successes, Pakistan and Kuwait have decided to expand and diversify their economic and investment partnership. Kuwait has proposed a $10 billion investment plan, focusing on key sectors such as water reservoirs, mining, mangrove forest expansion, information technology, and food security. This initiative aligns with Pakistan's priority areas, particularly in agriculture, where the country seeks greater investment.

Food and agriculture have emerged as critical areas of cooperation between Pakistan and Kuwait. Kuwait, a major food importer, sources over 85% of its food from global markets. Meeting its demand for halal meat involves importing live animals from countries like New Zealand and Brazil, which requires specialised animal hospitals on ships.

In this context, Pakistan offers an ideal alternative. By importing processed meat from Pakistan instead of live animals, Kuwait can reduce costs and logistical challenges while ensuring halal compliance.

To facilitate this cooperation, Pakistan and Kuwait should establish a dedicated entity similar to PKIC. A proposed Pak-Kuwait Food and Agriculture Company could attract investment in agricultural development and boost Pakistan's food exports. This would help narrow the trade gap between the two countries while providing Kuwait with a reliable, halal-certified, and cost-effective food source.

Beyond trade and investment, defence cooperation remains a key aspect of Pakistan-Kuwait relations. Pakistan's military has long enjoyed the trust of the Kuwaiti leadership, particularly for its support during the Iraqi invasion.

Both countries have vast opportunities for collaboration in defence training and capacity building. Recently, they signed agreements to strengthen military cooperation, with Pakistan's top military leadership visiting Kuwait to reinforce bilateral ties.

Pakistan and Kuwait have built a mutually beneficial partnership, and there remains significant potential for further strengthening this relationship. With smart and strategic policies, Pakistan can attract greater Kuwaiti investment, helping to revive its economy.

At the same time, Pakistan can provide Kuwait with quality food exports, skilled human capital, and expertise in various sectors. Thus, it is and will be a win-win cooperation.

THE WRITER IS A POLITICAL ECONOMIST AND A VISITING RESEARCH FELLOW AT HEBEI UNIVERSITY, CHINA