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Post-May upheaval fails to affect Pakistan’s economy: Ashfaq

* Says Int’l community sees Musharraf’s re-election as evidence of Pakistan’s economic stability

By Khalid Hasan

WASHINGTON: Despite the upheaval that has gripped Pakistan since May, the economy has remained resilient with both foreign investment and remittances from expatriates staying unaffected, according to Dr Ashfaq Hasan Khan, special secretary and adviser to the Finance Ministry.

In a speech at the Johns Hopkins University on Monday, he said, “Pakistan today is bracketed with such growing economies as Vietnam. He said political controversies, protest marches and even street violence in recent months have no adverse effect on Pakistan’s economic indicators.”

He said that between July 2006 and February 2007, monthly remittances form abroad averaged at $427 million, compared with $482 million between February and October 2007. Foreign investment in the first period averaged $578 million every month, compared with $687 million in the second period, he added.

“Foreign exchange reserves at the end of the first period stood at $13.3 billion, while the figure at the end of the first week of October was $16.3 billion. The stock market in the earlier period stood at 10,474 points and at 14,466 points in the second period,” he said.

He said that the dollar-rupee exchange rate had also remained unchanged. The Pakistan Bonds floated internationally this year, he added, had been oversubscribed seven times, from $500 million to $3.5 billion. He pointed out that he was citing these statistics to show that the international market and investors were confident about Pakistan’s economic stability, which, he added, is linked everywhere to political stability.

Musharraf’s re-election: According to him, President General Pervez Musharraf’s election by the legislature, though still not official, has been seen internationally as reassuring and interpreted as evidence of Pakistan’s stability and the soundness of the economic direction that the country has been moving in since the “lost decade” of the 1990s.

Hasan rejected the view, expressed by a member of the audience, that foreign investments pouring into Pakistan emanated from the Middle East or the Gulf. He said, “30 percent of the foreign investment has come from the United States, which also remains Pakistan’s largest trading partner, while the rest has come from European Union countries and some states of the Middle East and the Gulf. The areas that foreign investors have been primarily attracted to have been led by banking and insurance, followed by IT, energy, manufacturing and retail.”

He said that because of sound financial and economic policies, which he hoped any future government will follow, the budget deficit has been reduced by one half. Public debt which was 100 percent of Gross Domestic Product (GDP) at the end of 1999, had been brought down to 55 percent, while external debt which was 66 percent of GDP, had come down to 20 percent of GDP.

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