Pakistan defies threat of sanctions over N-test

By Shahid-ur-Rehman Khan ISLAMABAD, May 28 Kyodo - Pakistan detonated nuclear devices Thursday in defiance of threats of economic sanctions from the international community, ignoring calls from world leaders for restraint. Sanctions will follow and may hurt the Pakistani economy. Pakistan's foreign exchange reserves currently stand at 1.2 billion dollars, hardly sufficient for five weeks of imports. ''Sanctions are not new to Pakistan. Pakistan can live with sanctions,'' Prime Minister Nawaz Sharif said last week. Finance Minister Sartaj Aziz told reporters Wednesday that Pakistan will be able to withstand sanctions, brushing aside an assertion that nuclear testing may bust the economy. However, he admitted the sanctions will require Pakistan to bridle imports and practice austerity. In response to India's nuclear testing earlier this month, Japan, which is India's largest aid donor, froze fresh grants-in-aid and suspended new yen loans to New Delhi. The United States also imposed sanctions against India which included a call for an end to financing by international financing institutions. Pakistan has expressed disappointment about a poor response from the international community to India's five recent nuclear tests at Pokhran in Rajasthan, near the Pakistan border, and its failure to come out with an acceptable package of incentives and security for Pakistan. ''For Pakistan, the bottom line was security,'' Information Minister Mushahid Hussain told Kyodo News in an interview Wednesday. However, many people believe the ultimate effect will be on the economy. The scope and intensity of sanctions to be imposed on Pakistan remains unclear. Even if they were as ''mild'' as those imposed on India, they will likely cause defaults in repayment, galloping inflation, currency devaluation and withdrawal of investments. Some experts had urged Pakistan to exercise restraint, saying nuclear testing would wreck Pakistan's economy, which, they said, is being kept afloat with aid from the World Bank and the International Monetary Fund (IMF). ''The government will have no option but to go for a massive devaluation. The poor will suffer more than those who have the option to go abroad,'' a group of eight intellectuals and economists said in a statement. While Sharif was under pressure externally not to go nuclear, public opinion and major political parties in Pakistan were in favor of a tit-for-tat response to the Indian tests. Opposition leader and former Prime Minister Benazir Bhutto called for nuclear tests and argued that failure to do so would lead India to draw the conclusion that Pakistan lacked nuclear capability which would create a dangerous situation for Pakistan. An opinion poll by Gallup Pakistan found that 70 percent of the people favored the bomb.