http://www.boston.com/dailynews/294/world/U_S_promises_to_help_Pakistan_:.shtml

U.S. promises to help Pakistan out of its heavy debt

By Amir Zia, Associated Press, 10/21/2001 15:58

ISLAMABAD, Pakistan (AP) The United States promised Sunday to help Pakistan, crippled by a $37 billion debt, get international money as a reward for its cooperation in the U.S. war on terrorism.

The latest high-level U.S. delegation to come to Pakistan since the Sept. 11 terrorist attacks was led by Alan P. Larson, U.S. Undersecretary of State for economic, business and agricultural affairs.

At a news conference Sunday in Islamabad, Larson said Washington would encourage donor nations to give economic assistance to Pakistan to help ease its debt burden.

On Tuesday, the U.S. Congress lifted economic sanctions imposed on Pakistan after it tested nuclear weapons in 1998. The United States and Pakistan also recently signed an agreement to reschedule $379 million in Pakistani debt.

Pakistan is currently negotiating a three-year debt package with the International Monetary Fund. Finance Minister Shaukat Aziz said Pakistan also wants to renegotiate other loans with the Paris Club an informal group of creditor governments from major industrialized countries by the end of the year.

Larson promised U.S. support in the negotiations. He also said the United States would open its market to Pakistani products like textiles, its leading export commodity. The United States is reassessing the current quotas on Pakistani imports, he said.

''Pakistan has a huge potential to become a growing and dynamic economy,'' Larson said during a joint news conference with Aziz.

He said Washington wants to help Pakistan pay off some of its crippling debt, which currently devours 40 percent of the country's annual $14 billion budget.

Aziz told reporters Pakistan needs money to spend on education, health and poverty reduction. The literacy rate among girls in Pakistan is barely 10 percent and about 32 percent among boys.

Pakistan owes about $12.5 billion to other countries, including roughly $3 billion to the United States.

The United States has already announced it will extend a $300 million special line of credit to encourage investment in Pakistan. Aziz said the country was hoping to attract investment in the energy and electricity industries.

Aziz said Pakistan's economy could suffer a loss of between $1 billion and $2.5 billion depending on how long the conflict goes on.

The country has already been hit by higher insurance costs, freight costs and a loss of international flights, he said.

-- Anonymous, October 21, 2001

Answers

You know, this really sounds wacko, and I have no substantiating proof, but...

I've heard that the Euro is partially backed by gold. (They also refused to cut rates recently because of then non- existant "inflation" fears.) Russia has recently moved to also have a partially gold-backed currency. Saudi Arabia is moving back towards a gold-based currency.

What did they know that we didn't? We're creating such an enormous amount of new "money" that inflation should be a certainty. Something about this whole thing stinks...

-- Anonymous, October 21, 2001