Gulf War Stops $60 Million Monthly Flow Of Pakistani Black Money To Dubai: Property And Currency Dealers Tell Dawn Illicit Flow From Pakistan To Dubai Has Largely Stopped Since US-Iran War Began Pakistani Investors Struggling To Recover Dubai Holdings As Property Prices Weaken There
According to Profit/Pakistan Today citing Dawn, the US-Iran Gulf war has effectively halted the estimated $60 million in illicit or “black” money that flowed monthly from Pakistan to Dubai for property investment and is now redirecting those funds back into Pakistan’s own real estate market, according to property and currency dealers.
Pakistan had been identified twice as the second-largest foreign investor in Dubai’s real estate market, with hundreds of millions of dollars invested in the emirate’s property sector. Dubai had served as a widely recognised destination for funds operating outside Pakistan’s formal economy. However, the conflict has made it difficult for Pakistani investors to recover their Dubai holdings, weakening property prices there while simultaneously pushing up prices in Pakistan.
In Karachi’s Defence area, property prices have increased by 50 to 60 per cent since the Gulf war began on February 28. Other parts of Karachi have seen gains of 20 to 25 per cent. Both buying and selling activity has increased as liquidity improves. Currency dealers told Dawn that higher remittances from Dubai indicate Pakistani investors are repatriating liquid assets from the UAE.
Market sources said currency dealers expect hundreds of millions of dollars to return to Pakistan from the Gulf once the situation stabilises, as the conflict has broadly reduced foreign investors’ confidence in Dubai.
The Gulf war closed one door for Pakistani black money. That money had to go somewhere. It went to Karachi.
Check out our previous coverage of Pakistan’s economy on The Trusted Times.
