Finance minister warns of ‘shocks’ that Pakistan can’t absorb

Published: January 6, 2012

“Any decision should be taken while keeping in mind the multidimensional paradigm of security, prosperity of the country and economic diplomacy,” Finance Minister Abdul Hafeez Shaikh. PHOTO: AFP

ISLAMABAD: 

Pakistan may face international isolation on the economic front if drastic steps are taken during the reviewing of bilateral terms with the United States, the country’s finance minister cautioned on Thursday.

The warning from Finance Minister Abdul Hafeez Sheikh came at a meeting of the Parliamentary Committee on National Security, which on Thursday finalised its draft recommendations for its review of ties with the US.

“There are some shocks Pakistan can absorb but there are others it can’t,” Sheikh was quoted as saying at the parliamentary committee meeting.

The review was ordered by the government following the November 26 Nato airstrikes that killed 24 Pakistani soldiers in Mohmand Agency and led to a new low in relations between the allies.

“A single incident must not determine our relations with the US,” Sheikh said in an apparent reference to the steps taken by the government following the Nato airstrikes.

“Any decision should be taken while keeping in mind the multidimensional paradigm of security, prosperity of the country and economic diplomacy,” he added.

The minister, while spelling out alternatives, argued that the country should adopt a ‘balanced’ approach towards its relations with the US.

Briefing the 17-member all-party bicameral parliamentary panel, Sheikh was quoted as saying that Washington might use its influence over international financial institutions to hurt the country’s economic interests.

The minister went on to give a detailed briefing about the likely implications the country may face in the event of a move to pull out of the US alliance.

A committee member, who asked to remain anonymous, said that, according to the finance minister, the country’s fragile economy would face a daunting task if the relationship between Pakistan and the US deteriorated further.

“It is not about American aid but its clout over the IMF, World Bank and other financial institutions that can pose a real challenge for us,” said the committee member referring to the elaborate briefing given by the finance minister.

However, some of the members present questioned the finance minister’s wisdom, arguing that in the past Pakistan’s economy had survived ‘crippling sanctions’ imposed by the US – referring to sanctions placed on Pakistan after it tested nuclear devices in 1998 in a tit-for-tat response to tests carried out in India.

“Pakistan survived then and can survive now,” said an opposition lawmaker, who drafted his own proposals for the review of ties with the US.

The committee headed by Senator Mian Raza Rabbani has finalised the draft recommendations and forwarded them to the defence and foreign ministries for their input.

Rabbani told reporters that the committee will meet next Tuesday to fine-tune the final recommendations before they are handed over to Prime Minister Yousaf Raza Gilani.

The government will then present the committee’s proposals before a joint session of Parliament to seek its approval. The joint sitting is expected to be convened in mid-January.

The review is being eagerly awaited and closely watched by local and international observers since it is meant to reshape and herald a new era in Pakistan’s relations with the US and more significantly have a major impact on the Afghan endgame.

(Read: Healing of Pakistan-US rift on cards?)

Published in The Express Tribune, January 6th, 2012.

Reader Comments (47)

  • A Shahid
    Jan 6, 2012 - 6:45AM

    Whilst no one can advocate taking an express animosity route with the US but one day we have to absorb these shocks anyway if we are to become a sovereign nation. It is about time we rely on our own resources and make the much needed reforms.

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  • foruchandan
    Jan 6, 2012 - 7:08AM

    good for u….u will see ….then world economy was growing…now ….anyways u guys also know it better…eat grass but not bow down to USA :)

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  • Patriotic
    Jan 6, 2012 - 7:31AM

    We just never want to stand on our own feet…Pathetic! the US aid may have been supporting our economy, but it’s not guaranteed to last for ever. We have got to change, and make our economy more strong by increasing production of value added products and start producing electronics and other such modern day devices.

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  • M. A. Changezi
    Jan 6, 2012 - 8:38AM

    Blockquote

    Blockquote> “A single incident must not determine our relations with the US,” Blockquote

    Blockquote

    LOL!

    Blockquote

    Blockquote> “Any decision should be taken while keeping in mind the multidimensional paradigm of security, prosperity of the country and economic diplomacy,”Blockquote

    Blockquote

    There is no prosperity in allying yourself with the U.S. I mean why are we not learning? Recommend

  • Harry Stone
    Jan 6, 2012 - 8:45AM

    Am sure these factors have been considered by the panel as it draws up it list of demands for the US.

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  • Hu Jintao
    Jan 6, 2012 - 8:46AM

    we are sure that china will help on this issue also and by doing that china can prove one more time that they are our all weather friends.
    pak-china friendship zindabad.

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  • Ch Allah Daad
    Jan 6, 2012 - 9:38AM

    All stake holders should stop power games and focus on economy to save the country from complete breakdown. Don’t they understand that in current situation, winner will also get nothing.

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  • Gabriel
    Jan 6, 2012 - 9:53AM

    @Patriotic:
    Cant agree more brother. i wish this new year brings some sort of peace and comfort to pakistani nation. Ameen

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  • Jan 6, 2012 - 10:09AM

    @Patriotic:

    The irony is to build those modern day products you need investment from US/West based firms.

    If US sanctions Pakistan, companies like Samsung, Nokia, Vodafone will just move out of Pakistan, with Pakistan losing millions of jobs in just one strike. You see you dont need Nukes when you can cripple a Country like this. These kind of sanctions are useless against North Korea, because they have no such industry, but very effective against Pakistan.

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  • MAD
    Jan 6, 2012 - 10:23AM

    THis statementb reminds me of that Lyari torture video. Isnt that how we’re being treated.

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  • Parvez
    Jan 6, 2012 - 10:49AM

    Pakistan is shock resistant. We have withstood shock after shock, delivered by both civilian and military rulers. Possibly this shock ‘ you ‘ will not survive, but ‘ we ‘ will.

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  • Yuri Kondratyuk
    Jan 6, 2012 - 10:55AM

    Mr. Abdul Hafeez Shaikh, it’s about time you said it!

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  • Truthbetold
    Jan 6, 2012 - 11:06AM

    ““Any decision should be taken while keeping in mind the multidimensional paradigm of security, prosperity of the country and economic diplomacy,”

    That sounds like euphemism for “we won’t last a month without foreign doleouts”.

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  • M omar
    Jan 6, 2012 - 11:29AM

    Madresa student will create islamic economy

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  • Pakistani
    Jan 6, 2012 - 11:30AM

    I will want to live a life full of shocks -be it unbearable- than to live a servant’s life. The day we understand this is the day we become a independent nation.

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  • Waqar ahmed
    Jan 6, 2012 - 12:09PM

    if doing away with American aid will take us in the stone age, then so it be. We have to start living within our means if we want to get respect in this world. Get somebody who would give us a policy of not depending on loans and foreign aid. This nation is great and can do great things. Wish we had GREAT leaders.Recommend

  • Jan 6, 2012 - 12:26PM

    @Yuri Kondratyuk:
    @Hu Jintao:
    @M. A. Changezi:
    We must listen to Mr. Skeikh. He is a learned fellow and all learned people are called coward because they can see complications, results and destruction of a wrong action of any one. Pakistan if try to go against US and its allies may see a future of wide destruction like Libya, or Vietnam or Iraq.

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  • jai zardari
    Jan 6, 2012 - 12:39PM

    all commentators on this forum are educated and ,ost probably well off so sanctions or any economic problems are unlikely to effect them,neither will the financial crises effect mullas,beurocrates media men and politicians
    it will only make the poor to eat grass and the rich will have more horses to ride

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  • RajX
    Jan 6, 2012 - 12:48PM

    I am sure Pakistan will survive financial shocks but most people here wouldn’t imagine what survival would be like. Remember what happened to Iraq. Iraq was destroyed even before the US invaded the country. The destruction was through sanctions. Historically, Countries which have messed with the US have faced nasty consequences. Gaddafi and saddam are just two example but there are many more.

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  • Ali
    Jan 6, 2012 - 12:49PM

    This is the difference between Iran and Pakistan!

    They like to get imposed by international community but haev the courage to face tough times and dont rely on any toppling demons…on the other hand, one jolt and we end up like a cry baby!…pakistan need to learn from neighbours

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  • Ali Wali
    Jan 6, 2012 - 1:02PM

    We should concentrate on micro economy, that way with the population of almost 200 millions our economy can become less reliant on foreign factors.

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  • Skywalker
    Jan 6, 2012 - 1:12PM

    What most Paksitanis are not realising in their narrow jingoism is the extent to which US actions would cripple them once US leaves Afgahnistan in anger. US would declare Pakistan a terrorist state, impose severe sanctions, international trade and funding would totally dry up (no exports and imports), millions of poor and middle class Paksitanis would loose their jobs, all Pakistan’s allies including China and Saudi Arabia would have to toe the US line (since their business interests lie with US) and Pakistan would become another North Koera or Iran.

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  • A2Z
    Jan 6, 2012 - 1:15PM

    So instead of coming out with a plan, this person is telling us to beg more dollarsRecommend

  • hindustan ki shakti
    Jan 6, 2012 - 1:40PM

    @Waqar ahmed:
    Yeah
    Now I am proud to be your neighbour.Recommend

  • apj
    Jan 6, 2012 - 1:42PM

    beggars cant be choosers

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  • Jan 6, 2012 - 1:50PM

    Vienna,January 6,2012
    Pakistan should realize,in this world there are no NO unilateral
    options on external relations with any country of choice.Not even
    with the carved out Kosovo, carved out with the help of Pakistan.
    It is better to make up with strongest in more realistic terms
    for the sake of survival and security.Look at the falling packs of
    card houses built in the Middle East.Your investment there apart,
    the harvesting is held up.The message is water finds its own
    level at raise or falling levels.That applies to the ET Pakistani
    readers, who claim even part Pakistani media is their sole
    sovereign domain.
    Taravadu Taranga Trust for Media Monitoring TTTMM India
    –kulamarva Balakrishna

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  • Kawab
    Jan 6, 2012 - 1:58PM

    Pakistan has all the resources, the best of people and a strong determination to succeed. What is missing is a strong leadership to eliminate corruption and to be able to harnesss the capabilities of this nation to make it as prosperous as our founders once believed it would. If we can do that and really work for the people, maybe one day we can become self reliant and successfull.

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  • Truth Teller
    Jan 6, 2012 - 2:50PM

    Hafiz Shaikh the Only one in Government who is talking sense. USA can make & break the COUNTRIES!Recommend

  • Rana Amjad
    Jan 6, 2012 - 2:52PM

    God help Pakistan from emotional & sentimental planners out to destroy the very foundations of this country by following the isolation policies.

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  • naeem hussain
    Jan 6, 2012 - 3:53PM

    Mr Sheikh single incident has taken twenty six precious lives of our sons. You are wrong you should try to be honest and generate revenue within the country. If your brother or son would have been among the twenty six martyrs you were going to take some steps but now you do not care.

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  • J Oberoi
    Jan 6, 2012 - 4:16PM

    One thing I can say with reasonable conviction is that the Pakistani people and the economy are indeed very resilient. They can still go on with life as usual despite devastating shocks of all kinds to their nation. A lot of nations would have fallen apart from pressures like this.

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  • AaK
    Jan 6, 2012 - 4:17PM

    The greatest leader of this time, Mullah Muhammad Umar Mujahid when asked, a few days before the evasion of US army in afghanistan, why he is not accepting their demands to avoid the war. The briliant reply was ‘There is no reason to believe that they will stop there unjust demands if we meet this one, we have to say no at some point, so why not this time’

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  • hedgefunder
    Jan 6, 2012 - 4:42PM

    @Hu Jintao:
    we are sure that china will help on this issue also and by doing that china can prove one more time that they are our all weather friends.
    pak-china friendship zindabad.

    When has China ever stood by you in past 60 odd years???
    Please feel free to point out the events !!!
    Check as to the amount of Aid China provided during the earthquake & flood crises too !!
    It will be an eye opener for the likes of you.
    This friendship is simply based on Chinese interests in Trade and their Stratigic options in the region , nothing else !!!

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  • hedgefunder
    Jan 6, 2012 - 4:49PM

    “A single incident must not determine our relations with the US,”

    There have been thousand times more casualties and damage created by their assets within the country, which is all ok and forgotten, yet this single incident is going to be a paramount issue.
    The US relations were always going to end up this way, ever since the location of OBL was discovered.
    Pakistani Army was well aware of the situation and knew the consequences of the fall out too, hence the stand they chose to make on the border incident.
    Finance minister is quite right in his statement, that Pakistan simply will not be able to absorb the impact on the country’s finances and economy !Recommend

  • khurshid
    Jan 6, 2012 - 5:22PM

    @hedgefinder I agree with you. The US has all but apologized for the incident saying it was an unfortunate accident. In today’s news we learn of 15 FC men executed in cold blood , each one having over 40 bullets. Yet our policy towards them (taliban, TTP etc) remains ambivalent, at best. No one it seems is outraged. the media, judiciray the army and we the people seem to think 15 FC jawans being murdered in cold blood is OK so long as its not the US doing it.Recommend

  • hedgefunder
    Jan 6, 2012 - 6:05PM

    @khurshid:
    It is in the long term interest of Pakistan and its people to start acknowledging the facts and facing them too.
    If only this country had more level headed people, that have ability to grasp the situation on hand, rather than carried away with their all weather friend or their Ghairat !
    There is no Ghairat, when a person can not provide shelter or food for his family !!!Recommend

  • Cautious
    Jan 6, 2012 - 6:09PM

    Your Finance Minister isn’t just talking about USA aid being cut off – after May 2 that’s probably going to happened anyway. He’s talking about the USA’s ability to effectively isolate you from the World’s economic resources – isolating you from the ability to access basic things like energy etc. You may not care about your World image but whether you like or not the USA has the “soft power” to get you classified as a sponsor of terrorism with all the associated fall out. Your bankrupt, running out of energy and hard currency reserves. To fix your energy problems alone will take 10+ years of major capital infusions – picking a fight with the one country that could either provide those resources or cut you off from outside help isn’t very bright – but then again this is Pakistan where emotion counts more than logic.

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  • R.Khan
    Jan 6, 2012 - 6:20PM

    Hafiz Shaikh, Please make the Army understand the implications of isolation policies since you are the only person, they would listen seriously. All DHA plots would be going for a song & there would be no buyers. Just like Iran’s economy which used to buy 9 Tummam to a dollar & now 20000 Tummam to a dollar. Rs. 20000 will buy one dollar, Are we READY!

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  • antanu
    Jan 6, 2012 - 6:37PM

    @Ali:
    Dont compare…Iran has the power of petrol…

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  • Paki-Australian
    Jan 6, 2012 - 6:43PM

    To my ignorant yet enthusiastic brothers:
    PK has no resources, energy, foreign reserves, political stability, social responsibility and now apparently common sense! NADA, NONE!

    While our economy is showing signs if revival, make most of the US & Intl aid. We’re doomed without it, certainly!

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  • hedgefunder
    Jan 6, 2012 - 7:44PM

    @R.Khan:
    The general opinion in your country suggest that you are ready for this, as than perhaps Iran will solve your energy crises and China will solve your financial and economic crises !
    One suggestion, that Pakistan actually conduct some due dilligence with these Nations as to the likelihood of their assistance in this areas first, before makinjg future foreign policy decisions.
    As the very economic survival of the Nation could depend on the decisions made by the Army & Govt.

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  • khurshid
    Jan 6, 2012 - 8:06PM

    @hedgefinder. The term Ghairat in Pakistan seems to have taken on a very malignant meaning. We kill for our ghairat if our females marry of their own choice; we kill for ghairat if someone says a blasphemy law needs to be amended, we plunder, loot and arson in its name if someone says something sacrilegious thousands of miles away. The list is endless. A nation bred on propaganda and raised on a diet of chauvinism and contempt for other cultures and religions.

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  • Cautious
    Jan 6, 2012 - 8:11PM

    @ Hu Jintao. Is this the same China that voted with the American’s for sanctions against Iran — gave nominal amt of contributions during your earthquake and floods disasters — pulled out of commitments because of violence in Karachi – or is there another China that I am unaware of? It takes more than providing someone with nuclear fuel for atomic weapons to make a true “all weather friend”.

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  • Nand
    Jan 7, 2012 - 12:21AM

    There no sense of realization in Pakistan leadership that in current times no civilized country can thrive and try to achieve means with terrorism and bullying as tools.

    Governance of a nation is meant for economic progress which in turn is possible by international cooperation and by being a part of the environment in the days of globalization.

    Religion is personal and it can not be national policy and allow the country to be ruled by Mullahs.

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  • R.Khan
    Jan 7, 2012 - 3:51AM

    We are a nation of idiots & morons, who are living in their own make believe cuckoo world.

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  • Singh
    Jan 7, 2012 - 9:25AM

    One question only.
    If US, EU pull out of Pakistan, Where you guys sell or buy your product?
    Is it China, Libya or any Arab nation?
    Is Pakistan has R&D to invest which can bring revenue to pay its bills?
    Do you guys ever use brain?
    Pity on you.

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  • Khan Bhai
    Jan 7, 2012 - 11:33PM

    This is obviously a political signal he is sending to the security committee.

    @Paki-Australian: Thank you for your long distance advice. Now back to catching kangaroos.

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