PAKISTAN’S economic woes are refusing to go away as the promises of help and assistance made by so many world leaders in the last eight weeks continue to remain only that.

And it was highly disappointing to hear the US President announce his government’s intention to put together an assistance package of a paltry billion dollars for Pakistan as against an expected loss of $3 billion to the economy during the year as a direct result of the negative developments following the September 11 tragedy.

This loss is in addition to the loss that the economy was expected to experience as a result of the pre-September 11 world-wide recession that has deepened further since. On the market access request, President Bush referred to the need of some legislation before such an access could be provided to Pakistani goods in the US market without saying how long would it take him to get such a legislation passed or when would that come about. He did mention his government’s willingness to support Pakistan’s efforts to get a third round of debt relief in three years. But then this was already on the cards as the IMF and the World Bank were already considering a request from Islamabad for a medium-term loan of $2.5 billion from the Poverty Reduction and Growth Facility (PRGF) whose approval by the multilateral aid agencies is a pre-condition for seeking the help of the Paris Club for debt relief.

But this support of the US for Pakistan’s request seemingly does not extend to the actual amount requested for as so far the loan which the IMF and the World Bank are talking about does not even amount to a billion dollars.

There is also no sign of any change of heart on the part of the shipping and insurance companies and they do not seem to be ready yet to review their decision to apply very high war-risk- related rates on Pakistani export-import goods despite so many requests at the highest level and despite also the fact that with the military victories of the Northern Alliance in Afghanistan Pakistan was no more in the way of shooting and therefore should be taken out of the so-called war zone by the shipping and insurance companies.

The same impression, that Pakistan being still in the war zone is also discouraging customers of Pakistani goods in foreign countries from placing new orders fearing disruption in supplies and on the other hand no foreign investor seems willing even to take a fresh look at Pakistan’s potential. This has led to Pakistan failing to meet the World Bank-IMF deadlines for privatizing some of its public sector utilities and banks which recorded in the last year which itself was very low at about 3 per cent. With the fall in the growth rate the budgetary deficit is likely to go beyond 4 per cent of the GDP fixed for this year and may even touch six per cent of the GDP which was what this government had started with when it took over the reins of the government in 1999. All those structural and other reforms which the government has been so proudly claiming to have introduced over the last 24 months seem to have been nullified in the first year of its rule by the drought and now by the war. Drought is a natural calamity on which one can hardly have any control.

But wars could be avoided. And that is exactly what Pakistan has not been doing for the last 20 years. And in the last 10 years it had been involved in two low intensity wars which had affected its economy very seriously. Unless the Pakistani establishment vows not to get involved in such adventures in future, there is actually no hope of Pakistan ever getting out of the economic mess it has fallen no matter how many far reaching reforms are introduced in total isolation of the ground realities.