As the financial situation has deteriorated, diplomats here have become increasingly uneasy about the government’s capacity to prevent further attacks on the scale of the hotel bombing, which killed at least 53 people and wounded more than 250 others.
“The cabinet in Islamabad is confronted with a general breakdown of the state,” said an editorial in the Friday issue of The Daily Times, a newspaper that generally supports the government of President Zardari.
... Lawyers and businessmen have talked about moving away, particularly to Dubai or Malaysia. Foreign investment had almost dried up before the attack, they said, and now some worried it would disappear altogether. Some of Pakistan’s biggest businessmen had already shipped capital abroad, crimping new business ventures.
Moody’s, the international credit rating agency, cut Pakistan’s credit outlook from “stable” to “negative” on Tuesday, citing dwindling foreign exchange reserves, risks from extremists and high inflation.
Foreign exchange reserves have shrunk to $5.7 billion, with only about $3 billion available to cover payments for oil and food, according to the International Monetary Fund.
... “The international community cannot allow Pakistan to become a failed state,” said a senior economist from one of the international financial institutions trying to salvage the economy.
Diplomats and others are weighing what steps to take for themselves.
British Airways announced this week that it was suspending all flights from London to Islamabad, the only direct connection between Europe and Pakistan.
At a meeting on Friday, senior officials of the United Nations agencies in Pakistan postponed a decision on whether to send family members of their foreign employees home, participants said.
Such a move would have sent an unmistakable signal that the security situation was grave.
THIS IS WHAT WE WARNED WHEN THE DEMOCRATS OBAMA, BIDEN, AND KERRY AND OTHERS PUT PRESSURE ON MUSHARRAF TO HOLD ELECTIONS AND THEN RESIGN.
- AND PAKISTAN WILL BE WORSE: IT HAS NUKES - WHICH MIGHT FALL INTO THE WRONG HANDS...
- I THINK THE FREE WORLD NEEDS A STABLE PAKSITAN MORE THAN ANYTHING ELSE, ONE WHICH ALLOWS NATO TO CONDUCT MISSIONS IN THE FATA.
- THIS MEANS WE PROBABLY COUP IN PAKISTAN - LED BY THE ARMY...
- IT WOULDN'T BE THE FIRST TIME...
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