War Against Terrorism Its Economic Impact on Pakistan

WAR on Terrorism: Impact on Pakistan’s Economy Rehana Saeed Hashmi * Abstract In analyzing the government of Pakistan’s policies towards USA in the war against terrorism, this article focuses on Pakistan US relationship and US assistance to Pakistan for economic development. The main concern is to understand the environment of mistrust between the two states and need to analyze that Pakistan’s economic development should be based on sound long term economic policies. In the region of South Asia, Pakistan has the most delicate strategic position. The event of Russian invasion in Afghanistan during cold war period and in the post cold war era, the other world shaking event, the terrorist attacks on World Trade Centre have witnessed that these developments profoundly affected Pakistan’s strategic position. The incident of 9/11 affected Pakistan’s defence and strategic concerns, its national cohesion, domestic stability and economic condition. In the wake of 9/11 incident, once again Pakistan gets the status of a front line state, because immediately after the attacks on WTC, the US government approached Pakistan and presented stark choices. It had to either make common cause with Washington in its war against terrorism suspected terrorist bin Laden and his Al-Qaeda network based in Afghanistan with the support of Taliban regime or the second option was to persist with its pro Taliban Afghan policy and live with international condemnation and isolation from rest of the world1. Washington gave Pakistan twenty four hours to decide, whether it would be on America’s side or not2 and according to a news report the next day on September 13, President General Pervaiz Musharraf gave green signal to the state department that Pakistan would extend its “unstinted cooperation” to the international coalition against terrorism3. After the higher official meeting President of Pakistan General Pervaiz Musharraf addressed the nation and presented his policies which were completely