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Sanctions are squeezing Pakistan dry, cries finance minister

Pakistani Finance Minister Sartaj Aziz has said his country might have to stop paying its debts because it is running out of money as a result of the economic sanctions imposed by the United States.

In an interview with The Washington Times, he said the flow of money from lenders around the world into Pakistan's coffers had dried up since the sanctions were imposed last month in retaliation to Pakistan's nuclear tests in May.

''Our reserves are low, if we don't get new money, then obviously we are unable to pay our debt servicing,'' he said. ''Pakistan's finances had been healthy before the sanctions were imposed. Pakistan has never defaulted on its obligations in the last 50 years.''

The last blow may be dealt by the International Monetary Fund, which has tentatively decided to suspend a $ 226 million scheduled loan to Pakistan at the urging of US and other nations, to show unity behind the economic sanctions, he added.

The looming possibility of a default by Pakistan has left behind a surprise move by the US senate on Thursday to unanimously approve legislation by the administration granting President Bill Clinton authority to waive the economic sanctions against Pakistan and India for a year, the daily adds.

''The sanctions threatened to place Pakistan into default on its debts, a serious situation that could set off chaos in Asia,'' where many other countries are in recession and are having tremendous difficulty making debt payment, said Senator Pat Roberts, a Republican senator, who was one of the sponsors of the Bill which gave the President power to waive sanctions.

In Colombo, a senior Pakistan official said that his country did not plan to default on the billions of dollars in international loans but found it difficult to pay when the ''purse is stolen''.

Prime Minister Nawaz Sharief's special envoy Mohammad Akram Zaki said sanctions were hurting Pakistan, forcing its people to adopt austerity measures but they did not plan to default loan repayments.

''What do you mean by default?'' Zaki responded when asked by reporters if they plan to stop payments on loans taken from international lending institutions. ''If you go to a hotel and your purse is stolen how can you pay your bill?''

Zaki is due to meet with Sri Lankan President Chandrika Kumaratunga tomorrow to discuss Pakistan's security concerns, the report said.

He said Pakistan carried out its own nuclear tests following India's five explosions in May to restore nuclear parity and ensure a sense of security among their own people.

India had stopped making ''undiplomatic remarks and aggressive threats against Pakistan after Islamabad carried out its nuclear tests,'' Zaki said.

''Prosperity is important, but survival is essential,'' Zaki said justifying the tests in the face of international appeals to show restraint. ''The prime minister has sent a message to the country by moving out of his luxury office.''

UNI

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