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02-07-2006, 22:30 PM
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#1 (permalink)
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Real Madrid CF
Senior Contributor
Join Date: 03-07-05
Location: Mumbai
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Pakistan & $40 billion 'window of opportunity'
Economic Micracle of pakistan
Quote:
$40 billion 'window of opportunity'
Dr Farrukh Saleem
America sent our way a paltry $91million in 2001. Then came September 11. In 2002, we got a wholesome $1,151 million. In 2003, Bush announced a five-year $3 billion aid package. In 2004 and 2005 we received $411 million and $726 million, respectively. Thanks to Bush, the World Bank -- where America has 265,219 votes -- committed a three-year $4.5 billion loan. Thanks to Bush, the Asian Development Bank -- where America has 565,919 votes -- committed $1 billion a year for the next three years. Japan resumed her yen loans, the equivalent of $500 million a year, and the UK promised an additional $150 million a year. Additionally, expatriate Pakistanis keep sending back an average of $350 million a month.
To top it all, the US Department of Defence has been depositing a cool $100 million a month into our treasury for the last four years. The US forgave $3 billion worth of bilateral debt, and then convinced the Paris Club lender nations to reschedule a large portion of our $38 billion bilateral debt on easy terms. Add it all up -- and thank Osama -- for the total bonanza is going to be a colossal $40 billion.
Yes, our large scale manufacturing (LSM) is growing like it has never done before. Yes, construction activity is at its best since 1987. The stock market is booming and corporate Pakistan is richer than ever.
To be certain, the $40 billion 'window of opportunity' that opened up right after 9/11 shall eventually close. We ran a budgetary deficit as well as a trade deficit before the window opened up. We were, in effect, a twin-deficit economy.
Count the years and the 'window of opportunity' has now been open for more than four years. Here is what we have managed to achieve: From July 2005 to December 2005, we imported goods and services worth $13.6 billion and our exports stood at $8 billion; a six-month trade deficit of $5.6 billion. Our annual budget now shows total resources of Rs698 billion and expenditures of Rs986 billion; a deficit of Rs288 billion. Somehow, we continue to be a twin-deficit economy.
On December 25, 1979, another 'window of opportunity' had opened up when Leonid Brezhnev sent in troops to invade Afghanistan. On January 21, 1980, President James E Carter, in his state of the union address, identified Pakistan as a 'front-line state' in America's global 'war against communism'. During that 'window of opportunity' the CIA pumped in some $5 billion to $8 billion. Prince Turki al-Faisal, the then head of Istakhbarat, Saudi Arabia's secret service, matched the CIA dollar-for-dollar. Pakistani expatriates sent in an additional $3 to $4 billion a year. The total bonanza from our previous 'window of opportunity' had added up to some $30 billion.
On February15, 1989, the last Soviet soldier walked out of Afghanistan, and soon afterwards our 'window of opportunity' was no more. Alas, we had nothing to show for the $30 billion bonanza.
Our macro economy is now doing better than ever before but what about our micro economy? Yes, our gross domestic product is growing like never before but who is minding our gross domestic problems? Parts of Pakistan are shining like never before but how many Pakistani lives has 'shining Pakistan' really touched? How many additional Pakistanis now have access to basic necessities? Is justice being dispensed? Are we using this 'window of opportunity' to build either a political or an economic infrastructure to keep us going when the window is no more?
The writer is an Islamabad-based freelance columnist
Email: farrukh15@hotmail.com
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02-08-2006, 23:53 PM
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#2 (permalink)
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Real Madrid CF
Senior Contributor
Join Date: 03-07-05
Location: Mumbai
Country:
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Quote:
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To top it all, the US Department of Defence has been depositing a cool $100 million a month into our treasury for the last four years. The US forgave $3 billion worth of bilateral debt, and then convinced the Paris Club lender nations to reschedule a large portion of our $38 billion bilateral debt on easy terms. Add it all up -- and thank Osama -- for the total bonanza is going to be a colossal $40 billion.
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Secret of turn around of pakistani economy. |
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