Due to the prevailing uncertain situation in the country in the recent past and the imposition of emergency and promulgation of Provisional Constitution Order (PCO) the economy has adversely been affected.
According to economic experts if this situation continued there are risks that the economic sector that is already under stress will suffer from many problems. Due to the rising trend of suicide bombing and acts of terror in the country the foreign investors are hesitant to invest their money in the country. Experts are of the view that due to the emergency rule in the country Pakistan is no more a preferred destination for foreign investors. 
On the one and a visible downward slide can be observed in the national exports and on the other investment level is also on the decline. To add insult to injury there is a marked decrease in the orders being placed to the Pakistani exporters. This has jolted the economic foundations of the national exports.
Just one per cent increase in the textile exports in the first quarter of the current financial year is a reflection of the adverse impact the poor law and order situation had on the economy. During the mentioned period, July-October 2007, the textile exports stood at Rs2.02 trillion whereas for the same period in the year 2006 it was Rs2.018 trillion. This meagre increase too is due to the increase in the prices of the goods in the international market. 
The exports of leather products saw a decline of 17 per cent and stood at Rs10 billion. Whereas footwear exports decreased by one per cent and were measured at Rs2 billion.
Under the present circumstances a decrease of 13 per cent was recorded in the exports of engineering products. Similarly, in the first quarter of the previous fiscal year handicraft exports stood at Rs130 million. This year there was no export of handicrafts from the country.
Textile sector serves as the backbone of the national economy and in the overall export volume the share of textile exports is more than 60 per cent.
The reason that no increase was recorded in the textile exports is the decrease in the export orders. Those associated with the textile sector blame the political instability and poor law and order situation in the country to the decrease in export orders.
Due to the present situation of uncertainty the permanent importers of Pakistani commodity are placing their orders with Bangladesh, India and Vietnam. Each year in the month of October and November Pakistan gets most number of orders for its textile products but during the current financial year the orders placed have been very less.
Experts are of the view that the foreign businessmen fear that the Pakistani exporters will not be able to fulfil their commitments due to the poor law and order situation and prevailing political instability in the country. Due to the decrease in exports and increase in imports during the last four months the trade deficit has risen to $5.578 billion that is 38 per cent more compared to the same period last year.
The increasing trade deficit is reflective of the fact that the national economy is nose-diving. Economic experts are of the view that due to the poor law and order situation in the last four to six months the image of the country has badly suffered at the international level especially among the European countries and the United States.
The business community from Europe and the US are shying away from investing in Pakistan especially after the imposition of emergency in the country. Many European countries have cautioned their citizens against traveling to Pakistan. Many of the international investors are now targeting Pakistani competitors in the international market.
Continuous increase in the production cost, expensive labour and lack of availability of basic infrastructure has posed a challenge for the Pakistani textile exporters.
The traders’ community is of the view that in each and every meeting that they had with the former minister for trade Humayun Akhtar the issue was raised and that they continued to look for international buyers in spite of the adverse conditions. They maintain that the Trade Development Authority continued to play an important role in this regard.
They opine that the current situation has spoiled their whole effort as the poor law and order situation has build a negative image of the country at the international scene and the orders are now being placed with Bangladesh, India and other countries.
According to sources in the textile sector the industrialists are thinking about shifting their units to Bangladesh. Such a step if taken could be devastating for the national economy. The government as well as the opposition need to seriously think over the matter.