THE growing uncertainty and an estimated loss of $5 billion the economy is expected to bear after the Sept 11 attacks in the United States have forced the Pakistani government to seek the help of the western nations in averting the “imminent collapse situation”.

During the inter-provincial and the Federal Cabinet meetings held recently the country’s fragile economy was discussed, wherein it was reportedly decided that the issue should be formally taken up with the US and the British governments.

Some of the important key cabinet members, including the Interior Minister Lt Gen (retd) Moeenuddin Haider, two governors and few senior military officials were of the view that it is time that Pakistan sorted out the issues with the US-led coalition for bringing an end to the long-term damage being inflicted on the national economy. President Pervez Musharraf is believed to have said that he does not feel good at this stage to seek any package of assistance from the US and others because by doing so it would look as if Pakistan wants a “return” of its support in combating terrorism. The interior minister, former president Farooq Leghari and the PPP leader, Syed Iftikhar Hussain Gilani, in a recent meeting with General Musharraf have reportedly told the President that Pakistan should not waste time in seeking a bigger relief package, as any delay would tantamount to missing the opportunity as had happened on various previous occasions in the past.

“Why should we feel shy and refrain from seeking any package, as we are already suffering heavily on the economic front”, said Lt Gen (retd) Moeenuddin Haider. The issue, he said, was formally being taken up with the Americans and other western friends and added that the government was asking the US authorities to direct the US and the European companies to resume normal business activities in Pakistan. “We cannot sustain the pressure of more Afghan refugees as we need to look after our economy immediately”.

The former law minister, Iftikhar Gilani, stated that Pakistan should not commit the folly of providing all support to the US-led coalition and abstaining from seeking economic compensation. “There is an urgent need to inform the Americans that our economy too, has been hard hit after September 11 attacks and we also need support and that the country is not asking for any charity, keeping in mind the Gulf war episode.

While there are new developments requiring Pakistan to formally ask for economic assistance, the officials at the ministry of finance and commerce are at a loss over the statements made by their ministers - Shaukat Aziz and Razzak Daud. The finance minister had said in Washington that the Pakistani economy has withstood the recent pressure, while Razzak Daud, who was also in the US said that there had been a loss of $2.5 billion and that the country needs to be looked after under these circumstances. The Director of the Pakistan Institute of Development Economics, Dr A.R. Kamal, expressing his fears said that if Pakistan did not get a good aid package, things may worsen. The issue should be raised with the Americans. “The national loss of $2.5-3 billion on account of exports, pressure on the balance of payment position is likely to increase.

The government in these circumstances should negotiate for a bigger “grant package” rather than a loan and in case of failure, highly concessional loans should be sought to mitigate the economic effects, he said, adding that the IMF and the World Bank should offer better financial package at the same time, “we also need to get our loans restructured by the Paris Club to provide some relief”, he said. “In my view we need to be compensated by the US and the west at this crucial juncture”, Dr A.R. Kamal said.

The 20 per cent reduction in imports in dollar terms in a month and the fears that exports too, would end up at less then $8 billion has multiplied the economic worries of the government. The privatization front is also under distress as major transactions have been delayed. The government, which was anticipating to earn $1 billion through disinvestment of around 20 to 26 per cent shares of the Pakistan Telecommunication Company Limited (PTCL) by year-end is now forced to wait till January 2002, as this too, has been delayed. Same is the case with the nine oils wells of the ministry of petroleum and natural resources.

“There is no foreign buyer for our assets”, conceded an official of the Privatization Commission, predicating that we will have to pay a heavy price for September 11 events. The transactions in which foreign bidders are involved have already been delayed, but we do not know what would happen to those transactions in which domestic buyers have earlier shown lot of interest”, he said,adding that overall bleak economic prospects have forced the local investors as well to stay away from the privatization process.