- The Washington Times - Friday, January 10, 2003

ISLAMABAD, Pakistan The events of September 11, 2001, pushed most world economies into the dumps. But for Pakistan, they appear to have marked a turning point in the other direction.

Though millions here still live on less than $1 a day, Pakistan's economy has sprung to life in no small part because of its decision to join the U.S.-led war on terrorism 15 months ago.

Since then, international sanctions have been lifted, U.S. aid has poured into the country and efforts to rebuild neighboring Afghanistan have created a business boom. Pakistanis living abroad, heartened by their homeland's rising fortunes, are sending more money home.

Analysts say growth and company profits are up; budget deficits and interest rates are down. As stocks worldwide tanked, they shot through the roof here, with the Karachi Stock Exchange surging 112 percent in 2002 the highest percentage gain last year of any major bourse on earth.

"Pakistan has turned around a deteriorating macro [-economic] situation of a few years ago to a rapidly improving one," according to an upbeat World Bank report released last weekend.

The United States agrees.

"September 11 was a turning point," said Terry White, a spokesman at the U.S. Embassy in Islamabad, the capital. "Pakistan was really teetering before then."

For Pakistan, the benefits are doubly ironic. It initially looked set to lose big.

It had backed the hard-line Taliban in neighboring Afghanistan that the United States blamed for aiding Osama bin Laden, chief suspect in the September 11 attacks. So Pakistan was at risk of becoming the odd man out.

Pakistan was also two years into military rule, imposed after Gen. Pervez Musharraf staged a bloodless coup. Economic sanctions were slapped on Pakistan and India for 1998 nuclear tests. But after Pakistan sided with Washington as it sought to oust the Taliban, Western nations rewarded it by dropping sanctions. Washington also kicked in $1 billion in aid $600 million of which did not have to be repaid.

Pakistan also benefited by selling construction materials to rebuild war-ravaged Afghanistan, according to Ashfaque Khan, a top economic adviser to Pakistan's government. He said the production of cement in Pakistan had increased sharply as a result.

But Pakistan's most consequential post-September 11 windfall may have come from the flood of cash that poured in as Pakistanis abroad withdrew money from foreign accounts and sent it home.The bigger coffers have, in turn, eased budgetary pressures and strengthened the Pakistani rupee by almost 10 percent against the dollar.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide