Author:
Publication: The Times of India
Date: December 1, 2001
The Pakistani economy, already in
crisis since 1998, has been hit particularly hard by the U.S.-led military
offensive launched in Afghanistan. With investors more leery, tourism oft
manufacturing orders down and production costs on the rise, Pakistan has
suffered more than its share of economic grief from Washington's Afghan
venture.
"The whole Asian region has been
affected by an economic slowdown brought about by the war in Afghanistan,
but Pakistan is in the front line," said Yoshihiro Iwasaki, regional director
for the Asian Development Bank (ADB). The Institute of Policy Studies (IPS)
here sounded the same theme in its latest newsletter in which it said,
"The negative financial fallout of the U.S. military action in Afghanistan
will be substantial for Pakistan."
Pakistani officials estimate that
the country has racked up some $2.5 billion in economic losses since the
September 11 terror attacks that prompted the U.S. military action. If
President Pervez Musharraf s gamble to support the American action paid
off quickly in a lifting of sanctions, in pledges of economic aid and debt
relief, some analysts wonder if it will be worth it in the long term. "The
key challenge before the government today is to ensure that the positive
benefits from the removal of sanctions exceed the negative consequence
of the crisis, So far, this is not happening," the IPS study said.
Since U.S. warplanes started pounding
Afghanistan, Pakistan has come to be seen as more risky by investors. Manufacturing
orders have been cancelled or cut back in all sectors and production costs
are up because of soaring insurance rates, making exports less competitive.
Tourists and businessmen have been steering clear of Pakistan, thousands
of people here are losing their jobs. "Nobody at present considers investing
in Pakistan, whether we are supported by the U.S. or not," said economist
Faisal Bari from the University of Lahore.
Employment is Mr Bari's main concern.
According to some estimates, the unemployment rate here has climbed to
20 per cent and does not look like coming down soon with the economic growth
projections cut back to 2.5 per cent for 2001-2. But Pakistanis do not
need figures to tell them times are hard. Handyman Khairulla Iqbal walks
each morning about 20 km from Rawalpindi to Islamabad looking for work
in the capital. But since September, he has made the trek in vain. "The
American war has deprived us of our jobs," he lament&
While Pakistan has been unable to
escape the consequences of the war, Islamabad has had no more success in
achieving the main objective of its alliance with Washington: cancellation
of its $38 billion debt. The debt amounts to a staggering 64 per cent of
the gross domestic product. But up to now, Pakistan has won little more
than some rescheduling pledges for its war effort, despite a parade of
world leaders here in recent months.
Some Pakistani companies are seeking
compensation in the U.S. for problems created by the war. Civil aviation
officials have urged their government to seek damages from the Americans
for what they say is a million dollars a week in losses since October.
According to a civil aviation official,
the number of international flights landing in Pakistan has plunged by
70 per cent since October 7. Pakistan is now looking at the reconstruction
of post-Taliban Afghanistan to reignite its economy. The long border between
the two countries makes Pakistan a natural partner for the Afghans and
international organisations. (AFP)
