The changing attitude of Western powers
From Shamim Ahmed
Apr 24 - 30, 2000
It appears that the sole super power of the world the United
States which indirectly control the operations of the world donor agencies, has
decided not to squeeze Pakistan economically and given a nod to them to restore normal
channel of assistance to support the bruised economy of the country. This is an impression
one gathers from the sympathetic tone of western diplomats in Pakistan about the present
government as well as the promising signals from donor agencies like Asian Development
Bank (ADB) and International Monetary Fund (IMF).
While talking to some of them at diplomatic functions (curiously at
their initiative) one notices a lot of change in the attitude of Western diplomats towards
the present government. They acknowledge, not in plain words however, that Gen. Musharraf
government is doing well to unearth the loot and corruption of democratically elected
rulers specially Benazir and Nawaz Sharif who ruled the country one after the other for
over a decade. One gets a clear impression that Western world would not abandon Pakistan
just because the country is being ruled by the present government. They are ready to grant
Gen. Musharraf reasonable time to cleanse the stable with only one demand that he should
not unnecessarily prolong his stay and restore the democratic rule as early as possible.
There may be more than one reasons for this positive change and
encouraging signals. It may be because that Gen. Musharraf was been successful, through
his many diplomatic initiatives, to convince US leadership of his sincerity and honesty of
purpose fully sharing the concerns of the super power about the region. He may have asked
for some time to implement the dotted programme. A cynical argument advanced is that the
Western powers donot want to abandon Pakistan despite military take over and other
pressing reason because they feel that by doing so they would only push it deeper into the
lap of terrorism and may even force it to export its nuclear technology to meet its urgent
Anyhow it now seems clear that Pakistans economic pressures will
be much eased and it would not find it difficult to prepare a workable budget for the next
year. Asian Development Bank has already announced a 3 year new package of US $ 2.8
billion while prospects for $ 2.5 billion for 3 years Poverty Reduction and Growth
Programme are also fairly bright. If properly managed the two package can safely put the
economy back on the track.
Leader of ADB mission, after 2 weeks stay in Pakistan Mr. Marshuk Ali
Shah announced at a press conference in Islamabad last week that the bank will offer $ 2.8
billion to Pakistan under a new three year programme agreed with the government. However,
the programme (2000-2003) will be continued if it is in line with the loan programmes of
the International Monetary Fund (IMF).
"Since Pakistan is still under partial international sanctions,
our assistance will mainly confine to basic human needs, development of social
infrastructure and poverty alleviation", said the leader of the ADB mission. Briefing
reporters, he said the ADB mission had concluded talks with the government officials on
offering a new three year $ 2.8 billion lending programme. Out of $ 2.8 billion, 64 per
cent of the assistance amounting to $ 1.8 billion would be in soft loans, he added.
"In addition to that, the ADB will also provide grant technical assistance of some $
He said the ADBs "Country Programming Mission for 2000"
remained in the country for two weeks and concluded its deliberations with the senior
government officials and the representatives of all the four provinces.
The proposed programme represented a mix of area development programme,
education and health, infrastructure development and deepening of the reforms of the
capital market. The new programme also includes assistance for restructuring of the power
sector, legal and judicial reforms and rural micro finance.
Mr. Shah said the ADB had not provided any funding in 1998 owing to
sanctions. "But we offered $ 403 million, out of $ 800 million programme meant for
1999". The bank was also offering funds for boosting exports and maintaining foreign
exchange reserves level. Under the "Country Operational Framework Programme",
the ADBs assistance also focused on human and social development, improving economic
efficiency, export competitiveness and governance and institutional strengthening, he
Before leaving for Washington members of Pakistani team headed by
Finance Minister, Mr. Shaukat Aziz, for final talks with IMF Board, Governor State Bank,
Dr. Ishrat Hussain and Secretary General Finance, Mr. Moin Afzal told newsmen in Islamabad
last week that Pakistan had a fairly sound case for the grant of $ 2.5 billion IMF
assistance under its new Poverty Reduction Growth Facility (PRGF) programme.
"Performance of the economy over the past few months and prospects in the coming
months are good", the two officials revealed adding that the position provided
Islamabad a good change to secure new funding line from the IMF.
"The near-term economic scenario is stable and comfortable as the
GDP growth rate is estimated to be 4.4 per cent as compared to 3.1 per cent in the last
financial year", said Mr. Afzal. He said inflation had come down to three per cent
and foreign exchange reserves remained stable.