The foreign minister warns the country could face economic meltdown if it does not receive a major cash infusion from abroad.
Expats asked to help Pakistan
DUBAI // Pakistan is relying on the international community and expatriates to save it from an economic meltdown, the nation's foreign minister said at a gathering of countrymen. "The economic picture of Pakistan is not as rosy as portrayed by the last regime," Shah Mahmood Qureshi told community leaders and businessmen in Dubai on Friday evening. The government is appealing to its friends around the world for money. It needs billions of dollars to control widening trade deficits that are pushing it towards national bankruptcy.
The country continues to battle a Taliban-style insurgency and is still reeling from the bombing last month of the Islamabad Marriott Hotel, one of the few remaining symbols of foreign investment. "The suicide attacks in our country have affected our economy," Mr Qureshi said at Focus on Pakistan, a forum at the Grosvenor House hotel in Dubai Marina, organised by the country's embassy in Abu Dhabi. "We are seeing the uncertainty grow and we urge the world to come and stand by Pakistan, because this is not our issue alone."
Mr Qureshi arrived in Dubai after a trip to China with President Asif Ali Zardari, during which Beijing agreed to build two nuclear power stations in Pakistan, but did not commit to providing direct aid. Pakistan may now be forced to turn to the International Monetary Fund, a politically unpopular move Mr Zardari had been struggling to avoid. Mr Qureshi urged Pakistanis here to spread the message that community effort was vital to the nation.
"With the help of the international community and the overseas Pakistanis, we would be able to come over this crisis," he said. He warned that terrorist attacks on Pakistan were a global issue and that the world must step in to help. "If Pakistan falls, security and safety in the world can be threatened." Today, he said, Pakistan had an elected government, "in power by the will of the people", but the transition to democracy was not an easy one. Describing Mr Zardari as a "business-friendly president", the foreign minister urged businessmen to invest in the nation.
"Pakistan gets US$7 billion through its expatriate community based abroad," he said. In the financial quarter ending Sept 30, Pakistan's balance of payments deficit widened to US$3.95 billion (Dh14.5bn), from US$2.27 billion in the comparable period last year, according to the State Bank of Pakistan. On Oct 10, the Federal Bureau of Statistics reported that the country's trade deficit had widened to US$5.55 billion from US$3.64 billion a year earlier, while the current-account deficit reached a record US$14 billion for the fiscal year ending June 30.
Yesterday, Pakistan's central bank lowered the cash reserve ratio to six per cent and said it would be cut to five per cent on Nov 15, to ease credit conditions. Shamshad Akhtar, governor of the State Bank, said the move would inject 180 billion rupees (US$2.2 billion dollars) into the system. This month in the US, Mr Zardari launched the Friends of Pakistan, an international forum jointly chaired by the UAE and the UK. The first conference, to be held in Abu Dhabi next month, is expected to be attended by representatives from many nations.
On Friday evening, Javed Malik, Pakistan's ambassador at large, announced several initiatives to support Pakistanis across the Gulf states. These include a "friendship society" in the UAE and Pakistan to support the community and facilitate cultural exchanges. An awards ceremony is planned to recognise the achievement of Pakistanis in the Gulf region, and annal.ae Overseas Pakistani Business Group is to be set up for expatriates in the Gulf, with the aim of boosting investment at home.