US aid cut: Will it impact Pakistan Economy

US aid cut: Will it impact Pakistan Economy

ISLAMABAD - Analysts say that Washington's freeze on military assistance to Pakistan will have limited impact on the country's economy, citing Islamabad's friendship with China and diminishing importance of the US aid to the economy.

Sources told AFP that the negative effects of US freeze of military assistance would be "marginal" in the short to medium term.

They said with US aid declining significantly in recent years, Pakistan's economy is improving due to its closeness with China.

AFP Quoted an Islamabad based diplomat as saying that "International aid is not big in comparison with size of the country's economy." He said the "means of pressure are limited."

Former finance minister Hafeez Pasha said the US aid has been declining very sharply for the last seven years, with last year around 750 million dollars. He said this figure, when compared with the economy, is not a lot.

A senior World Bank economist Muhammad Waheed said Pakistan's economy is currently stable and growing.

He described rising of 2.5 billion dollars in international bonds by Pakistan as "successful".

Senator Mushahid Hussain Sayed, said if the US starts to bully, blame or threaten, Islamabad has other options.

He said suspending aid is "a failed formula".