The UAE Wants Its Money Back, But We Are Still Brothers |
Pakistani leaders prepared a full ceremonial welcome for Mohammed bin Zayed on 26 December last year—JF-17 escort, 21-gun salute at Nur Khan Airbase, reception by Field Marshal Asim Munir, Prime Minister Shehbaz Sharif, and Foreign Minister Ishaq Dar, and a red zone lined with UAE flags and portraits for a formal state reception at the Prime Minister’s House.
The visit did not follow that script. MBZ met the country’s top civilian and military leadership at the airport and departed soon after without attending the planned public engagements.
The visit took place as Saudi Arabia and the UAE were in disagreement over Yemen, particularly the Southern Transitional Council, with tensions extending into the Red Sea, Sudan, and wider regional alignments with Israel. This divergence had begun to shape competing approaches within the Gulf, making the Islamabad discussions more than ceremonial. This same period saw a financial issue come to the fore.
Pakistan did not take sides. It refused to enter intra-Gulf rivalries and did not agree to any strategic or defence positioning against another Gulf state. It maintained its position of balance and offered to mediate between both sides.
A couple of weeks later, Pakistan requested the UAE to roll over approximately $2.5 billion in deposits and reduce the interest rate from about 6.5 per cent to near 3 per cent. The rate was the issue. The UAE facility had become the most expensive among Pakistan’s bilateral arrangements.Pakistan pursued the matter directly. The request was raised at the leadership level. President Zardari travelled to Bahrain and then to the UAE. Diplomatic and military channels remained active. The objective was clear: extend the deposit at a lower cost.
The UAE did not revise the terms. It retained the higher rate and allowed only two-month rollover periods. As this period is now expiring, Pakistan has begun repaying the deposits this month in phases from its State Bank reserves.
This is a repayment decision, not a rupture. Yet social media has gone berserk.
India is currently jealous of Pakistan’s leadership role in Iran diplomacy. Hence, Indian mainstream coverage quickly framed the repayment as a diplomatic setback rather than a financial decision. Reports and television segments presented it as the UAE “declining further........