The fact remains that the
tests have pricked the balloon of Indian war hysteria
By AMANULLAH BASHAR
June 03 - 09, 2002
"If you want peace, be prepared for war",
the truth in this saying prevailed soon after Pakistan successfully
test-fired its indigenously developed medium range ballistic missiles
on May 25.
The war tension, which was earlier mounting both in
India and Pakistan due to constant threats by the Indian leaders, was
reflected in the crash of stock markets in the two countries.
The tense situation however greatly subsided as
soon as Pakistan takes the timely decision to test a series of
Although the Indian Prime Minister Atal Behari
Vajpayee tried to play down the missile test by Pakistan by saying
that "we are not taking it with any greater amount of
seriousness", yet the fact remains that the tests have pricked
the balloon of Indian war hysteria.
The decision to go for test was taken by Pakistan
amid heightened tension and fears of war between the two nuclear-armed
President Pervez Musharraf on that occasion said
that Pakistan is ready for war and no one should be mistaken about it.
He added that we do not want war, but we are neither scared of it. He
said that the country is passing through a critical phase but Pakistan
would surmount the crisis with success and honour, he said
Commenting on the Indian reaction to the missile
test of Hataf (Ghauri) that they were not impressed by this missile,
the President said "We do not want to impress you, we are showing
our defence capabilities." The Indians were earlier talking of
giving two weeks or two months time to Pakistan. President Musharraf
said, "We are not impressed by such talks, either." He
called for keeping the national interest supreme and foremost, above
every other thing.
Haroon Bari, President of Karachi Chamber of
Commerce and Industry (KCCI) while talking to PAGE appreciated
the timely decision taken by the government. He said that the defence
capability demonstrated by Pakistan in the form of missile tests that
had greatly helped restoring the confidence of the business community
in Pakistan. He said that the business community has risen to the
occasion and will play its due role in the hour of the need.
Haroon Bari feels that the international community
knows that people of Pakistan have always stood for the cause of
humanity and have supported the efforts of the international forces
against terrorism. It should be the moral obligation of the
international forces to come to the help of Pakistan when some Hindu
extremists are out to wage war against Pakistan.
The KCCI president said firmly that there is no
panic of war among the business community in Pakistan. He however said
that as a result of border tension the overall performance of the
economy might hurt especially in the area of external trade.
The month of May 2002, however, proved to the most
eventful month of 2002 due to the ongoing tension between India and
Pakistan, which had struck the bourses of both countries. However, no
major fluctuation was witnessed in the currency markets.
Although both countries remain eye to eye which may
continue to have its repercussions on local equity values, no major
change is expected in the local market in the near future.
Since January 2002 Dollar against rupee appreciated
by 0.6 per cent. During May 2002 Pakistani rupee remained firm against
the Greenback and no major oscillation was seen in the rupee/dollar
parity. On May 1, 2002, Rupee stood at Rs60.10 and closed at Rs60.12
on May 28, 2002 showing a depreciation of only 0.03 per cent against
the US Dollar.
Keeping in mind all the negatives on the political
front, the only change is seen from May 20,22, 2002. Rupee appreciated
by 0.23 per cent against dollar but on the very next day on May 22 it
nose dived against the Dollar by 0.20 per cent and closed at Rs60.10
in the inter-bank market.
The major reason for a stable Pak Rupee/dollar
parity is mainly foreign grants by the International Financial
Institutions and various countries which has in turn led to a build up
in the country's reserves. Furthermore no major downturn was witnessed
on the country's trade account in the aftermath of 11/9 due to a
turnaround in the US economy. These collectively have led to continued
strength of the rupee against the Greenback. The other reason of the
stability could that the currency markets are less over reactionary in
nature than equities.
The situation remains dire as both countries remain
prepared for a possible conflict. Both continue to trade heavy fire
across the borders. Although both countries seem to be at the brink of
war, chances that the regional crisis may be averted are high, as
there remains considerable Western interest in the region. A crisis in
the form of a conflict in the Indian subcontinent would serve to
dampen the West ongoing fight against global terrorism.