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WASHINGTON (US): The experts here give immense importance to the the State Department's Fact Sheet on the state of U.S.-Pakistan relations, and Secretary Powell's announcement in Islamabad on March 18 that EX-Im Bank expanding programs to finance U.S. exports to Pakistan is a "sign of the increasing importance of U.S.- Pakistan relationship."

The leaps achieved, the sources state, would go a long way in giving a people-to-people orientation to the growing multi-year U.S.-Pakistan relationship. Ex-Im Bank financing, they suggest, would now be available to support Pakistan's purchases of U.S. equipment and services in cases where repayment of the financing is assured by the sovereign guarantee of the Government of Pakistan.

The expanded coverage, including short-, medium- and long-term financing, is a result of improving economic and political fundamentals and hence a likewise improvement in Pakistan's risk profile. "The upgrade in Pakistan's risk rating is confirmation of positive economic developments that have occurred in Pakistan, including a reduction in external debt, and growth in exports and foreign exchange reserves," said Ex-Im Bank Chairman Philip Merrill, adding: "This opens the way for expanded trade between our two countries, and Ex-Im Bank is glad to consider sovereign financing transactions in support of U.S. exports to Pakistan."

According to the official fact-sheet, "The United States and Pakistan share a close, long-term partnership. The $3 billion, five-year assistance package announced by President Bush in June 2003 demonstrates our commitment to support Pakistan's efforts to strengthen security in the region, help Pakistan's participation in the war on terror, and build economic opportunities for its citizens by reducing poverty, illiteracy and the conditions in which extremism flourishes."

It says: "U.S. debt relief and development assistance for Pakistan will enhance private sector growth, economic reform and good governance." The $200 million of Economic Support Fund assistance to Pakistan this year and $300 million of Economic Support Funds requested of the Congress for Fiscal Year 2005 target the following areas:

● At least $100 million of Economic Support Funds for Fiscal Year 2005 will go for social sector support, including university scholarships, new health, education and water projects, and training for local officials, including women councilors. $200 million allocated in Economic Support supplemental funding will be applied to debt relief in Fiscal Year 2004.

The United States has led the effort to dramatically reduce Pakistan's official debt through Paris Club rescheduling and bilateral forgiveness. Pakistan's debt to the United States has been cut in half - by $1.5 billion - freeing up national revenue for programs to improve the quality of life and increase the capacity of Pakistan's local governments to meet the needs of their people.

Other U.S. government assistance will strengthen education; improve maternal and child health care delivery; strengthen the legislature, local government, political parties, civil society and the independent media; and increase access to micro-credit.

● At the same time, the $300 million Foreign Military Financing assistance requested for next year will strengthen Pakistan's ability to confront terrorist remnants seeking sanctuary in its border regions. Other security assistance to Pakistan will help strengthen its law enforcement and counter-narcotics capacities.

"Together, the United States and Pakistan are dismantling the A.Q.Khan network responsible for proliferating nuclear weapons-related technologies. We will remain vigilant in the fight against the spread of all weapons of mass destruction. The United States is fully engaged with Pakistan on a range of important non-proliferation issues and is working with Pakistan on steps to bring its export control system in line with international standards."

The EX-IM Bank sources said here that "although until the Bank's current action, Ex-Im Bank has not been open under its routine programs in Pakistan since 1998, the Bank has approved a limited number of transactions that were specially structured to ensure reasonable assurance of repayment, including a long-term loan guarantee to support the export of three Boeing 777 aircraft to Pakistan International Airlines."

They said though the formal announcement was made in Islamabad on March 18, the action has come into effect as from March 11. This year, the Export-Import Bank of the United States marks its 70th year of helping finance the sale of U.S. exports, "primarily to emerging markets throughout the world, by providing loan guarantees, export credit insurance, and direct loans."

In fiscal year 2003, Ex-Im Bank, an independent U.S. federal agency, authorized financing to support $14.3 billion of U.S. exports worldwide.