ON September 11, President General Musharraf pledged “unstinted cooperation” to the United States of America. Everyone at the Ministry of Finance, from the highest down to the lowest functionary, has since leaped into an extended fantasy.
The dream began with the Americans liquidating our $38 billion external debt. In the second phase, expectations came down to bilateral debt of $ 12 billion. In the third phase, they were further diluted to the US and Japanese debt of $3 billion and $5 billion, respectively. In the fourth phase of day-dreaming, there were no debt write-offs but the Ministry insisted that donors would meet our $8 billion financing gap. In almost all the following phases billion dollar figures finally cam down to hundreds of millions and ‘debt re-profiling’ replaced write-offs.
Wake up. Welcome to reality. Neither the Japanese, our single largest bilateral creditor, nor the Americans are in the business of debt write-offs. In the case of Japan, the parliament will not even consider a debt write-off for a nuclear state. Then there is all that multilateral debt, the writing-off of which is not even a possibility at this stage.
Yes, there is the Highly Indebted Poor Countries (HIPC) scheme under which debts may be written-off. Currently, the HIPC has 34 African countries, 4 Latin American countries, 1 in the Middle East and 3 in Asia namely Lao, Vietnam and Myanmar.
Next comes the questions as to why do we even expect the Americans to write our debts off. What have we really done for them or, more appropriately, what can our leadership really do for them? What’s the worth of granting their carrier-based aircraft a few corridors into our airspace? Let us say a few hundred dollars per sortie.
This essentially is hostile territory for American ground troops and they realize that as well. A few hundred soldiers based in Pasni, Jacobabad or Dalbandin could be worth a few millions more.
How about intelligence? Their electronic intelligence is way ahead of our own and the unfortunate part is that we ourselves do not have much human intelligence deployed within Afghanistan. Furthermore, the military strategies and the hardware that the Americans use are way beyond the comprehension of our personnel and we cannot help them in those areas either. Pakistan, however, is part of the coalition and that must have a lot of diplomatic worth of the U.S.
On the brighter side, President Bush has now asked the Congress to lower duties on Pakistan’s textiles and Moody’s Investors Services has raised our foreign currency bank deposit rating one notch from ‘Ca’ to ‘Caa1’.
To be certain, the Americans for safeguarding their own national interests, are going to grant a few hundred million dollars here and a few hundred there and they shall also help us get a couple of billion dollars in the form of a new Poverty Reduction and Growth Facility (talks on that have been going on even before the September 11 incident). Bilateral debts will be rescheduled and in some cases re-profiled (that however has been a routine and not an anomaly).
ON September 11, President General Musharraf pledged “unstinted cooperation” to the United States of America. Everyone at the Ministry of Finance, from the highest down to the lowest functionary, has since leaped into an extended fantasy.
