The Pakistan Ministry of Commerce is acting to allay US fears regarding textile industry viability following the cancellation of millions of dollars worth of orders by US buyers since the September 11 attacks.

In a strategy to convince textile buyers that the country is not a war zone, the Ministry of Commerce has positioned two lobbyists in Washington, at a cost of $12,000 each, to convince US business that trading with the country is safe. An advertising campaign is also to be run in US newspapers, to project a positive message about the Pakistan economy.

Approximately 60 per cent of Pakistan's US$9 billion export market is to the US and Europe. In addition to order cancellations, the industry is being hit with huge insurance surcharges due to the perception of Pakistan as a war zone.

Pakistan is paying a heavy price for the war in Afghanistan, with governmental estimates of damage to the economy at between US$2-2.5 billion. Private estimates are up to US$10bn.

Pakistan's central bank warned economic growth would not hit the 4 per cent target, and was likely to range from 2.5-3.7 per cent.