Analysis: How lifting sanctions helps Pakistan

Pakistani tanks are heading for the Afghan border

The BBC's Elizabeth Blunt examines the impact of President Bush's decision to lift sanctions imposed on India and Pakistan.

The sanctions imposed after the nuclear tests in South Asia three years ago were even-handed - exactly the same measures were taken against India and Pakistan.

But the impact of the sanctions has been far greater on Pakistan than it has been on India.

For India the restrictions have affected the armed forces and certain parts of manufacturing industry - the United States no longer supplied military equipment or what was described as 'dual use technology' - anything which could have a military as well as a civilian application.

For India the damage stopped there, and had no real impact on the wider economy.

But the Pakistan economy is much weaker.

The most damaging of the sanctions was a ban on American support for Pakistan in multilateral financial institutions, which blocked loans and debt relief for Pakistan and hampered plans for a poverty reduction programme.

Debt eased

These constraints will now go, and the United States has already indicated that it will be asking the IMF and fellow donors to help ease Pakistan's heavy debt and offer substantial new loans.

For ordinary Pakistanis the economic relief will be welcome and may perhaps strengthen General Musharraf's political position.

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From the United States' own point of view it is equally important to be able to supply military equipment to a key member of its new alliance.

A few constraints on direct American aid to Pakistan will still remain for the moment - these are the result of a constitutional provision banning help for any military regime which overthrows an elected government.

They would be harder to remove, and cannot be lifted by a simple waiver from the President