Pakistan advances economic diplomacy with Iran and GCC countries
Pakistan has reaffirmed the strategic importance of its ties with Iran and the Gulf Cooperation Council countries, with Prime Minister Muhammad Shehbaz Sharif directing ambassadors to Gulf states to take a more proactive role in boosting trade, investment, energy cooperation and people-to-people contacts.
The meeting focused on strengthening economic diplomacy, increasing remittances, and addressing the concerns of the Pakistani diaspora in the region.
The Prime Minister chaired the session at the Prime Minister’s Office, attended by Deputy Prime Minister and Foreign Minister Senator Mohammad Ishaq Dar, Minister for Economic Affairs Ahad Khan Cheema, PM Advisor Dr. Syed Tauqir Shah, SAPM Syed Tariq Fatemi, and Foreign Secretary Amna Baloch, according to a press release issued.
Economic impact: Iran war on the Gulf States
The US and Israel’s war on Iran has cast a long shadow over the Gulf. It has placed many of the economies that make up the Gulf Cooperation Council (GCC) regional grouping – Bahrain, Kuwait, Oman, Qatar, the United Arab Emirates (UAE) and Saudi Arabia – under substantial strain.
Since the war began in February, the World Bank has downgraded its 2026 GDP growth forecast for the region from 4.4 percent to just 1.3 percent. Some thinktanks, including Oxford Economics, even predict that some GCC economies will enter recession in the second half of the year.
However, the effects of the war have differed across the region. While the Gulf states are often viewed as a unified economic bloc bound by a shared dependence on hydrocarbons, the conflict has revealed significant differences in their economic vulnerability and resilience.
Countries like Qatar and Kuwait have seen their oil and gas exports seriously disrupted by the effective closure of the Strait of Hormuz. But Saudi Arabia and the UAE, which have access to bypass infrastructure, have been partly able to circumvent this limitation.
Saudi Arabia has diverted 7 million barrels of crude per day through its east-west pipeline, allowing it to export oil from Yanbu on the Red Sea. The UAE, meanwhile, has utilised a pipeline from Habshan to Fujairah to export up to 1.8 million barrels of oil each day from the Gulf of Oman.
Oman built a space economy in three years
In just three years, since the unveiling of Oman’s Space Policy in 2023, the Sultanate of Oman has transitioned from laying the foundations of a national space sector to building an active and robust market.
Over the past three years, the Sultanate of Oman has announced a succession of monumental and unprecedented space projects.
From the establishment of Etlaq, the MENA region’s first commercial spaceport, Zone 88, a fully integrated space economic zone in Al Duqm that will include a space settlement centre and advanced technology facilities, or Spazers, a multinational satellite manufacturing joint venture in Oman which will localise the production of small satellites and other space-related technologies in country, the Sultanate of Oman has undoubtedly maintained strong and steady momentum in the sector.
However, what makes this momentum particularly striking is how recent Oman’s entry into this space has been. In just three years, since the unveiling of Oman’s Space Policy in 2023, the Sultanate of Oman has transitioned from laying the foundations of a national space sector to building an active and robust market.
Earlier this year, government officials confirmed this momentum, announcing that investments within Oman’s space sector, valued at RO 20 million between 2023 and 2024, had increased by 200 percent. The sector had also created around 400 direct and indirect jobs in the country, while the number of companies operating in the sector also grew by 127 percent, reaching 25 by the end of 2025.
But how was the Sultanate of Oman able to achieve this in just under three years?
The answer lies primarily in strategic planning and in the way Oman positioned space not as a standalone ambition, but as part of a wider national economic transformation.
Past two decades: strategic role of GCC sovereign funds in rebuilding
During the past two decades, the emergence of sovereign wealth funds (SWFs) marked a dramatic shift in the balance of strategic capital and assets, with consequential effects on global financial markets and long-term economic development. Presently, SWFs manage approximately $15.8 trillion globally, underscoring their growing influence in shaping cross-border capital flows and strategic investment trends.
Across the Gulf and the wider MENA region, sovereign investors such as the Public Investment Fund, Qatar Investment Authority, Abu Dhabi Investment Authority, and Mubadala have strengthened their positions as some of the world’s most influential institutional investors. Collectively, GCC sovereign wealth funds manage nearly $5 trillion in assets, representing roughly one-third of total global SWF assets under management.
What distinguishes GCC sovereign wealth funds is not only the scale of their capital but also the way they deploy it. Rather than acting as passive custodians of national reserves, these institutions have evolved into forward-looking strategic investors, allocating capital across technology, infrastructure, energy transition, artificial intelligence, and innovation ecosystems. In 2023 alone, major GCC SWFs deployed more than $82 billion into global investments, reflecting both their scale and growing sophistication.
Yet while these funds have expanded their global footprint from Silicon Valley to Asian markets, they also possess the capital, institutional expertise, and long-term investment horizons required to pursue a more active role closer to home. One anchored not only in financial returns but also in regional economic resilience and stability.
At a time when geopolitical uncertainty is making global capital more cautious and fragmented, regional sovereign investors are uniquely positioned to shape the Middle East’s next chapter of economic transformation.