EFFECTS OF NUCLEAR EXPLOSION-1998 AND

9/11 ON THE ECONOMY OF

PAKISTAN

Pakistan Economy1

Economic effects of May 1998

Brief HistoryNuclear weapons program was established in 1972The 1975 arrival of dr. Abdul Qadeer khan

considerably advanced these efforts.On may 28, 1998 Pakistan announced that it had

successfully conducted five nuclear tests"Tighten belts" to face sanctions to be imposed

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EC 250

Economic effects of May 1998

Japan reaction:Banned tradingBanned investing in projects

US reaction:Termination of US foreign aid programs Denial of export credits and guarantees by any US

department Opposition to the extension of any financial or

technical loan or aid from any international institution

3

Economic effects of May 1998

IMF also hold back its ESAF and Extended Fund Facility Programs as well as new Official Development Assistance

Freezing the FCA’sStock market goes down by 37.6% Free market exchange rate of the rupee

depreciated by 16.2%.Fixed investments as % GDP was 13.9%, Growth in Exports decline to -10.7 %growth rate in total investments decline to -3.6%

4

Economic effects of 9/11

Brief History19 terrorists hijacked four commercial passenger

jet airliners.Twin Towers of the World Trade CenterPentagon in ArlingtonShanksville in rural Pennsylvania • The US War on Terror. USA PATRIOT Act

5

Economic effects of 9/11

KSE lost Rs. 24 billion since Wednesday 12 September 2001

One of the major indicator of trading, slid by 107.16 points and the total value of shares decreased by Rs. 24 billion.

The value of the shares traded at the KSE dropped from Rs. 314.140 billon to Rs. 290.188 billion

World bank: Pakistan a sharp economic blew, estimated to cost the country at least one billion dollar in that year.

No go area for western businessmen

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Economic effects of 9/11

Regaining strategic importance; Camp David-2003

$3 billion aid package for PakistanAs well as $1 billion in loan forgiveness, in

recognition to assistance again war.

Sanctions upliftedMultilateral aid packagesDebt were either written offIncreased quota for Pakistani export to US and

European union Donations from IMF and world bank

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Statistical Data

Economic indicators Year 2001/02 Year 2002/03

GDP growth rate 3.4% 5.1%

Agriculture growth -0.1% 4.1%

Manufacturing growth

rate

5.0% 7.7%

Growth in total

investment

0.4% 16.2%

Growth in export 2.3% 16.6%

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CONCLUSION

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