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Despite economic support from the international community and all-time high foreign exchange reserves, Pakistan's struggling economy has witnessed a steep slump in growth rate mainly due to internal lawlessness and threats of a backlash from Islamic militant groups.
The goodwill generated by President Pervez Musharraf's decision to join the international community's fight against terrorism helped Pakistan gain substantial aid and economic concessions from the United States, Japan and European Union countries, Pakistan daily Dawn reported on Monday.
However, it has not helped the domestic economy whose growth rate has stagnated around 3.5 per cent, it said.
Aid packages to reduce its $60 billion external and internal debt failed to spur the economy owing to the global recession and poor domestic and foreign investments due to the activities of militant groups, the paper said.
Before the September 11 attacks, Pakistan's total external debt stood at $37 billion. This has been reduced considerably due to the promised $one billion write-off by the US as well as the reduction of the overall bilateral debt by about 30 per cent by some European countries.
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