Pakistan’s sinking economy | The Daily Star
12:00 AM, May 09, 2021 / LAST MODIFIED: 12:00 AM, May 09, 2021

Road to Freedom: This Day in Bangladesh Liberation War History

Pakistan’s sinking economy

May 9, 1971


The Pakistan government was reported ready to carry out recommendations of the United States, the World Bank, the international Monetary Fund and other international donors for a 100 percent devaluation of its currency, from 4.6 rupees to the dollar to more nearly 9, 10 or 11. While promising to devalue, it avoided doing so three times in the last year, sources said.

For all latest news, follow The Daily Star's Google News channel.

Pakistan sent senior economist M Ahmed to Washington to persuade the Nixon administration to resume economic aid suspended on March 26 when the war erupted. United States economic aid to Pakistan totaled more than $4.5-billion over the last 20 years and had been running at $200 million a year. A new loan of at least $70 million for commodity imports was still under US administration's review.

The dispatch of Ahmed was said to reflect the growing financial strains caused by the government's use of troops to crush a move for political autonomy in Bangladesh.

Ahmed was reported planning to ask the World Bank, IMF, the United States and other foreign creditors for permission to pay the $60 million due om May 1 in rupees, with payment in hard currency postponed for at least six months. Pakistan's total foreign debt was said to exceed $4 billion.

Financial sources in the US pointed out that while Pakistan repeatedly averted devaluation over the last year, the government, during the same period, ordered $100 million in foreign arms, including 30 French Mirage jet fighters.


Bangladesh's leading economist and publicist Rehman Sobhan recently arrived in the US to seek public support for an early end to hostilities and for Pakistani negotiations with the Awami League for Bangladesh's independence, reported the New York Times.

His efforts to see officials in the White House, State Department, aid agencies or other branches of the administration had been turned down, added the report.

Nonetheless, according to the newspaper, Rehman had been in contact with influential legislators including Senator Edward M Kennedy, Democrat of Massachusetts, and he was scheduled to confer with Senator JW Fulbright, Democrat of Arkansas, chairman of the Foreign Relations Committee, as well as with staff aides.

Quoting a highly informed source the New York Times wrote: "The Punjab seem to be going for the White House and the Bengalis for the Senate."


Rabindranath Tagore's 110th birth anniversary was celebrated against the stirring background of the freedom struggle at Bangladesh Mission in Kolkata today. The ceremony was a big draw for the people who were eager to get their first glimpse of several notable Bangladeshi artists. An exhibition on the liberation movement was also opened. Hossain Ali, the high commissioner, issued a statement expressing his respect for the poet. Bangladeshi actress Kabori also spoke about the events in Bangladesh at the ceremony. The function synchronized with the inauguration of the Bangladesh Coordination and Relief office.

Shamsuddoza Sajen is a journalist and researcher. He can be contacted at


Stay updated on the go with The Daily Star Android & iOS News App. Click here to download it for your device.

Type START <space> BR and send SMS it to 22222

Type START <space> BR and send SMS it to 2222

Type START <space> BR and send SMS it to 2225

Leave your comments

Top News

Top News