Mar 31 - Apr 06, 2003  
ISSUE # 13  

Despite the fact that a prolong war in Iraq may hit the supply as well as the prices of the petroleum products all over the world, supply in Pakistan may not disrupt as the country has alternative options for importing oil. There is no need of any panic regarding supply side as the government has already arranged stocks for 30 days, while we have alternative options for oil supply in case war prolongs. However, the price factor would certainly affect the economies both in the developing as well as the developed world. 
The situation once again reminds that Pakistan which has succeeded to reduce its

dependence on imported oil by 50 per cent should gear up its efforts to optimize its indigenous energy resources.

Besides, developing the domestic gas and coal resources, situation demands for accelerated efforts for expediting the cross border gas pipeline project on war footings.




Rising shipping costs are feared to push the costs of all sea-bound cargoes to and from Pakistan to unaffordable and uneconomic levels. According to sources in the business community the US-led invasion of Iraq has resulted in increased freight charges even on routes beyond the area of conflict, the Gulf and for that matter the Red Sea, Suez Canal and Mediterranean.


The second quarterly report of SBP highlights better performance of Pakistan's economy during the first half of current fiscal year, consolidation and also hints towards meeting most of the targets. There is growing concern about prolonged war in Iraq that may cause economic slow down, higher inflation and lower exports. However, higher foreign exchange reserves have the potential to absorb this external shock.