October 31, 2001	Wednesday	Shaba’an 13, 1422

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HONG KONG, Oct 30: Foreign aid flows to Pakistan are crucial to its fragile finances, which have been further weakened by the US-led attacks on Afghanistan, Finance Minister Shaukat Aziz said on Tuesday.

Speaking on the second day of the World Economic Forum’s East Asia Summit here, Aziz said the impact of the Sept 11 terrorist attacks on the US and its aftermath had hit Pakistan hard.

“We generate a lot of revenue from consumption and from exports and imports. To the extent that they are reduced, then our revenue collections will be lower,” said Shaukat Aziz.

The worsening balance of payments and fiscal deficit had been partially alleviated by the lifting of economic sanctions on the country, a resumption of economic assistance, debt relief and better market access for Pakistani exports, he said.

He confirmed Pakistan had received $170 million in commitments from Washington and had been told “informally that another $500 million is coming.”

However, continued aid was essential to improve Pakistan’s debt and fiscal position, he said.

Pakistan’s currency had strengthened since the attacks on the US and the stock market had also risen, Aziz said.

“Secondly the stock market has gone up by about 20 per cent. This is because people now feel that with all the sanctions and the renewal of aid... that there will be better performance in the stock market.”

He maintained the country would see four per cent economic growth this year despite a warning from Pakistan’s central bank on Monday that growth for the 2001-02 fiscal year could be as low as 2.5 per cent because of the impact of the conflict in neighbouring Afghanistan.—AFP/Reuters

Mr Aziz has said that Pakistan is seeking fiscal support and greater and fairer access to world markets specially for textile sector in order to help improve its economy, Our Reporter from Islamabad quoting a ministry of finance’s handout adds.

He said the situation in Pakistan was quite close to normal. “Industrial output remains unaffected and business is being conducted as usual”, he said.

Mr Aziz also assured buyers from Pakistan that supplies will remain uninterrupted as they have been in the period preceding Sept 11, 2001.

He said that Pakistan was blessed with abundant resources foremost amongst which was human capital comparable to the best in the world. With a well established infrastructure particularly in the Information Technology (IT) and telecommunication sectors, Pakistan was placed to become a leading base for manufacturing in the years to come, he added.

Mr Aziz said that financial sector reforms initiated by the government of President Pervez Musharraf have started yielding very significant and heartening dividends.

He said that Intra South Asia trade needed promotion in an atmosphere of peace, trust and cooperation. Aziz said East Asia needed to be adopted a more holistic approach.

The focus, he said, now should be on South Asia where there existed a lot of opportunities for investors.