Gulf war disrupts Pakistan’s black money flow to Dubai

The Gulf war has reportedly slowed the flow of funds from Pakistan to Dubai, while some money already invested there is being redirected towards property in Pakistan, according to sources in the property and currency markets.

Thousands of Pakistanis have invested in Dubai, particularly in the property sector. Pakistan has twice been identified as the second-largest foreign investor in Dubai’s property market.

All Pakistan Builders Association Chairman Hassan Bakhshi said the monthly outflow of funds had been affected by the conflict.

“About $60 million in illegal (or black) money is created in Pakistan per month and has been invested in Dubai, but this has now stopped,” Bakhshi said.

He also said property prices in Defence had risen significantly since the Gulf conflict began, with investors increasingly turning towards the area.

“Property prices in Defence went up 50-60 per cent after the Gulf war started,” Bakhshi said.

According to Bakhshi, the legal security of property titles in Defence was among the factors attracting investment.

Thousands of Pakistanis had also used Dubai as a third-country base for conducting business with countries including India and Bangladesh, he said.

With the ongoing war-like situation, some investors are now seeking to recover funds held in Dubai, according to market sources.

Currency dealers said hundreds of millions of dollars could return to Pakistan from the Gulf once conditions normalise, arguing that the conflict had affected Dubai’s appeal among some foreign investors.

The market estimates and claims cited in the report could not be independently verified.