Pakistan’s economy can no longer sustain the cost of war as the money so far disbursed by the US to compensate the damages the country has suffered while fighting the war on terror is only 14% of the total losses, says a leading economist.
Dr Ashfaque Hasan Khan, Dean of NUST Business School and former member of former military ruler Pervez Musharraf’s core economic team, said that despite enormous sacrifices, the international community neither recognises nor appreciates the country’s efforts.
He was addressing the audience of the 14th International American Studies Conference, jointly organised by the US Embassy and Quaid-e-Azam University, on Wednesday.
According to figures published in the economic survey of Pakistan, the war on terrorism has caused direct and indirect losses worth $70 billion, while the US has disbursed only $9.97 billion under the Coalition Support Fund, he said.
He also held the country’s leadership responsible for the world’s apathy towards Pakistan’s problems rooted in the war on terrorism. He said the president, prime minister and finance ministry seldom highlight these sufferings with the international community.
Contrary to the US claims of giving huge assistance to Islamabad, the country has received only $4.8 billion in cash assistance from Washington, which comes up to roughly $437 million per annum, said Khan during his presentation, which was based on figures compiled by the finance ministry. He said in total the US has given less than $15 billion in the last 11 years.
He, however, said the CSF reimbursements did matter for the country as the money would relieve pressures on foreign currency reserves. “Had the last tranche of $1.2 billion, released in July, not come timely, the rupee would have depreciated to Rs100 against a dollar,” he said. The disbursement provided a two-month relief to the government.
Khan further said the country has reached a point where it can no longer bear the cost of war, which has adversely affected investment and privatisation, stressed the fiscal position and impacted exports.
“Pakistan needs the US for multiple reasons but it does not need cash assistance,” he said, while suggesting the US give market access to the country.
Over the last 11 years, the role of the US in Pakistan’s development is on a decline, he said. Citing official figures, he said Pakistan’s exports to the US in terms of their share in the total exports have declined by a tenth. In 2001-02 the exports to the US were 24.4% of the total exports, and have come down to 14.7% in 2011-12.
Published in The Express Tribune, November 8th, 2012.