Ask anyone in the corridors of power in Pakistan how the country
would have coped with recent political and military turmoil had its
finances been as weak as they were three years ago and you are
likely to be greeted with a nervous smile.
Nobody cares to speculate what the outcome for Pakistan's economy
would have been had the September 11 attacks taken place three
years ago, before general Pervez Musharraf and his team began to
implement a reform programme. The same goes for the war in
Afghanistan that has once again turned Pakistan into a frontline
state, or the ensuing terrorist attacks and lawlessness that have
driven out foreign investors, or last December's nuclear showdown
with India that cost the country at least $250 million in
additional defence spending.
The fact that Pakistan's economy was able to withstand these
shocks and continue to expand indicates that the fundamentals are
sound....
