WASHINGTON, Sept 30: Pakistan needs economic assistance to defeat terrorists who use the country as a hub, Deputy Defence Secretary Paul Wolfowitz said on Monday.

Mr Wolfowitz told the inaugural session of the US-Pakistan Business Council that the Bush administration greatly valued the help provided by President Pervez Musharraf to fight terrorism.

“Without this support we could not have won this war,” he said.

“But, unfortunately, today some of the worst schools for terrorism and religious extremism are in Pakistan,” he said.

He said the US government was confident of defeating “terrorists in Pakistan and elsewhere” with the assistance from the Musharraf government, but only the efforts of the government cannot win this war.

“We need support from the business community as well to make this world a safer place.”

While praising the Musharraf government for its “continued support for fighting terrorism,” Mr Wolfowitz also mentioned the arrest of prominent Al Qaeda leader Ramzi bin Al Shibh.

“Arrested and handed over to US authorities by Pakistan, Al Shibh continues to provide valuable information to us,” he said.

Emphasizing that terrorism cannot be fought without economic prosperity, Wolfowitz assured Pakistan the Bush administration would help “in this enormous task.”

Mr Wolfowitz said so far the United States has given $670 million to Pakistan to compensate for the expenses incurred in the war against terror, more than $300 million during the last week.

“We also have provided economic assistance worth $2 billion and are negotiating with Congress for an additional $1 billion promised by President Bush last week when he met the Pakistani ambassador,” he said.

Wolfowitz said the Musharraf government faced a daunting task in fighting terrorism.

“I don’t envy the agenda that President Musharraf has to face every morning and I don’t envy his job,” he said.

In a videotaped message to the inaugural session, Gen Musharraf urged US investors to invest in Pakistan because the country “ now has a credible and competitive environment.

“There’s no reason why investment should remain low now,” he said.

Gen Musharraf reminded US and Pakistani business leaders attending the session that US Overseas Private Investment Corporation and Exim Bank were both offering assurances and incentives to those willing to invest in the country. OPIC, he said, had set aside a special fund of $300 million for the insurance of businesses going to Pakistan.

Earl Anthony Wayne, US assistant secretary of state for Economic and Business Affairs, told participants Pakistan had incurred losses because of its support to the war on terror and the United States “recognizes that there has been an economic loss and wants to provide strong commitment to Pakistan’s economy.”

He said the Pakistani economy was already showing signs of improvement and imports from Pakistan to the United States had gone up and this year total imports from Pakistan were expected to go up to $1 billion.

Finance Minister Shaukat Aziz said the Pakistani government recognized that it was important to maintain law and order to encourage investment and said the government was “determined to root out (violent) behaviour with our full might.”

He said Pakistan no longer treated an overseas investor differently from a domestic investor, adding that overseas investors were now free to invest anywhere they wanted. He hoped that the US-Pakistan Business Council will “strengthen the relationship of economic cooperation.”