DATE=5/28/98
TYPE=CORRESPONDENT REPORT
NUMBER=2-232968
TITLE=PAKISTAN / INDIA SANCTIONS (L-0NLY)
BYLINE=BARRY WOOD
DATELINE=WASHINGTON
CONTENT=
VOICED AT: 

INTRO:   U-S OFFICIALS ARE PREPARING TO IMPOSE ECONOMIC SANCTIONS
AGAINST PAKISTAN -- AS CALLED FOR IN U-S LAW -- IN RETALIATION 
FOR PAKISTAN'S DETONATION OF NUCLEAR WEAPONS.  V-O-A'S BARRY WOOD
REPORTS THE SANCTIONS ARE LIKELY TO COST PAKISTAN BILLIONS OF 
DOLLARS IN AID AND ARE SIMILAR TO SANCTIONS IMPOSED EARLIER THIS 
MONTH AGAINST INDIA.

TEXT:  INITIAL ESTIMATES ARE THAT SANCTIONS AGAINST PAKISTAN 
COULD BE WORTH AS MUCH AS THREE BILLION DOLLARS OVER THE NEXT 12 
MONTHS. THAT IS A SMALLER FIGURE THAN THE SANCTIONS COST TO 
INDIA, BUT SINCE PAKISTAN IS A MUCH SMALLER ECONOMY -- THE 
SANCTIONS IMPACT IS LIKELY TO BE GREATER. 

UNLIKE INDIA, PAKISTAN IS BORROWING FROM THE INTERNATIONAL 
MONETARY FUND.  NEARLY ONE BILLION DOLLARS REMAINS IN A LINE OF 
CREDIT APPROVED SEVERAL MONTHS AGO. AN I-M-F SPOKESMAN SAYS THERE
WILL BE DETAILED REVIEWS PRIOR TO PAKISTAN MAKING ANY FUTURE 
DRAWING. HE SAYS I-M-F OFFICIALS WILL BE LOOKING TO SEE IF THE 
COST OF NUCLEAR TESTS VIOLATED COMMITMENTS TO HOLD DOWN 
GOVERNMENT SPENDING. 

UNDER U-S LAW, THE UNITED STATES WILL BE OBLIGATED TO OPPOSE NEW 
LENDING TO PAKISTAN FROM INTERNATIONAL ORGANIZATIONS. WHILE THE 
U-S DOES NOT HAVE A VETO ON I-M-F LENDING PROGRAMS, IT IS THE 
BIGGEST SHAREHOLDER IN THE ORGANIZATION CONTROLLING 18 PERCENT OF
THE VOTES. EXPERTS SAY, AS WITH THE WORLD BANK, I-M-F LENDING TO 
PAKISTAN IS UNLIKELY TO GO FORWARD WITHOUT U-S SUPPORT.

PAKISTAN, LIKE INDIA, IS A MAJOR BORROWER FROM THE WORLD BANK, 
WHICH THIS WEEK INDEFINITELY POSTPONED 800 MILLION DOLLARS OF NEW
LENDING TO INDIA.  INDIA HAD HOPED TO BORROW THREE BILLION 
DOLLARS FROM THE WORLD BANK THIS YEAR. PAKISTAN WAS SEEKING ABOUT
750 MILLION DOLLARS FROM THE WORLD BANK. THOSE LOANS ARE UNLIKELY
TO GO FORWARD.

WHILE WESTERN EUROPE AND RUSSIA HAVE FAILED TO IMPOSE ECONOMIC 
SANCTIONS ON INDIA, JAPAN HAS AND IS LIKELY TO DO THE SAME WITH 
PAKISTAN. JAPAN IS THE LARGEST SOURCE OF BILATERAL AID TO 
PAKISTAN WITH LENDING WORTH NEARLY ONE HALF BILLION DOLLARS. 

THE INDIAN CURRENCY WEAKENED TO A RECORD LOW AGAINST THE DOLLAR 
AFTER ITS NUCLEAR TESTING EARLIER THIS MONTH. THE PAKISTAN 
CURRENCY IS EQUALLY VULNERABLE, AS PAKISTAN HAS A MUCH HEAVIER 
FOREIGN DEBT BURDEN THAN INDIA. 

FINANCIAL ANALYSTS SAY BOTH COUNTRIES WERE UNDETERRED BY THE 
THREAT OF SANCTIONS, REGARDING NATIONAL SECURITY CONSIDERATIONS 
AS FAR MORE IMPORTANT. (SIGNED)

NEB/BDW/JO   

28-May-98 6:44 PM EDT (2244 UTC)
NNNN

Source: Voice of America
.