January 13, 2002	Sunday	Shawwal 28, 1422

KARACHI, Jan 12: Although the external trade had sustained the shocks of September 11 and its aftermath, the worse was yet to come as uncertainty still prevailed, industry sources said on Saturday.

Government officials had feared a shortfall of over one billion dollars in $10.1 billion export target as a consequence of the terror attacks in the United States.

However, Pakistan’s exports of 4.45 billion dollars for the first six months of fiscal 2001-02 year were better than expected.

“Yes the official external trade statistics do not reflect the negative impacts of the September 11 and the consequent events but the toll has now started to take effect,” said Nadeem Maqbool, chairman of All Pakistan Textile Mills Association.

Textile and ancillary exports account for about 50 per cent of the country’s total exports.

Industry experts said the financial impact of September 11 would become apparent during the next quarter (January-March).

“Our own estimates show that yarn offtake has plunged by 10 per cent during the past few months implying an industrial slowdown,” Maqbool said.

The textile industry had not received export orders from its clients in Europe, the United States and other traditional partners and this would be reflected in the next quarter of the fiscal year, he said.

“In the months of October and December (2001) the textile exporters have received less orders (than normal) or in some cases no orders,” Maqbool said, adding “this would be evident in the next quarter.”

Some exporters, however, believe the trade incentives granted to Pakistan by the European Union as its reward for joining the anti-terror coalition would offset the downturn.

“The EU agreement, which offers Pakistani textile exporters a greater access to its markets with effect from January 1, 2002, will help balance some of our losses,” Shabbir Ahmed, a leading bedwear exporter said.

But the Pakistani economy faces another potentially crippling challenge — the tense military stand-off with nuclear rival India.

Both Pakistan and India have amassed troops along their border and exchanged tit-for-tat sanctions following the December 13 attack on the Indian parliament, which New Delhi says was carried out by two Pakistan-based militant groups.

Nevertheless, the State Bank in its December quarterly report put a cheerful face on the country’s economic standing.

“Although, uncertainty still remains following September 11, the (economic) reforms implemented during the past year have improved Pakistan’s macroeconomic fundamentals, making the economy more resilient to such shocks,” the report said.

In return for the government following the guidelines laid down by the International Monetary Fund and other multilateral donors, Pakistan was granted last month a 1.3 billion dollar poverty reduction and growth fund plan and the rescheduling of 12.5 billion dollars of its external debt for 30 years.

However, the bank warned that: “Lingering doubts will remain about Pakistan’s economic prospects and the speed with which things will return to normal.”—AFP