War on terror cost becoming unbearable for Pakistan: Shaukat Tareen

[Naveed Yaseen]

* Adviser on finance says ‘very negligible’ portion of costs being defrayed by partners

ISLAMABAD: Pakistan has complained to the heads of international financial institutions and development partners that the economic cost caused by the war on terror in Pakistan has now risen to an unbearable level and a very negligible portion of the costs is being defrayed by its partners.

Adviser on Finance Shaukat Tareen said that Pakistan was not merely facing various economic consequences of the global crises but was playing the role of a frontline state against the war on terror. In the last year only, Pakistan had seen a series of successive shocks that were unleashed in the wake of the sub-prime crisis. Oil and food prices had affected the country most profoundly, and it was still reeling in the wake of their aftermath, Tareen said.

In the days ahead, the situation was likely to be compounded by a second round of the on-going financial crisis.

The country also had to face the challenge of a democratic revival. Unfortunately, the elected leaders inherited an economy that was encumbered with burden of subsidies accumulated due to unanticipated oil and food prices.

Tareen said that Pakistan might be amongst the few countries that had successfully adjusted to the unprecedented increases in the prices by eliminating nearly all the subsidies.

On the monetary side, the country was fighting a rising inflation by adjusting the interest rates and by containing the monetary growth. However, these measures had not been supported by Pakistan’s development partners. Even though the measures had helped contain the rapidly deteriorating macroeconomic framework, the challenges remained, Tareen said.

The country looked up to its development partnership, especially the IFIs, to help it carry out development programme, through their advice and financial assistance, Tareen added.

http://www.dailytimes.com.pk/default.asp...2008_pg1_8