The team, described by the foreign economists here as shocked, and disconsolate, was reported to have recommended that aid be withheld until a viable political solution was found and a realistic development plan was prepared by the martial-law government.
The World Bank coordinates an 11-nation consortium that has been supplying about $500 million a year in aid on which Pakistan is heavily dependent. The United States channels most of its aid-about $200 million a year-through the consortium.
How long Pakistan will continue to support army activities in East Pakistan without the foreign aid is a subject of widespread discussion in the foreign community here.
Although foreign-exchange reserves are low, the situation is not-quite as crippling as had been assumed. One reason is Pakistan's unilateral declaration of a moratorium on payments on her huge international debt. Another is that since the fighting began almost no imports have entered East Pakistan, so the government has saved foreign exchange. Finally by coincidence, high inventories of raw materials for, manufacturing have been accumulated in West Pakistan before the trouble started.
In sum, the foreign economists feel. that though Pakistan's economic position verges on the desperate, it does not necessarily presage an early end of the occupation of the east.
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