Nuclear foes hit by loans freeze

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AS INDIA and Pakistan edged towards a resumption of peace talks, leading world powers yesterday announced a freeze on all non-humanitarian loans to the two countries in protest at their recent nuclear tests.

The freeze will be largely symbolic given the existing de facto halt to all IMF and World Bank lending, and India's finance minister, Yashwant Sinha, declared it would have no immediate effect. But for the Group of Eight industrial powers, which announced the move at a meeting in London yesterday, it is another signal of their determination to stop the accelerating nuclear arms race on the Subcontinent.

That campaign, launched with the swingeing US sanctions against India and Pakistan, has already notched up a small success with the announcement by both Delhi and Islamabad of test moratoria, after the combined 11 blasts conducted since mid-May.

Yesterday brought new hope of dialogue, as Pakistan offered to resume talks on 20 June, and India countered with the date of 22 June. The jockeying itself is a measure of just how intractable is their dispute. But the G-8 foreign ministers professed encouragement that international pressure seemed to be yielding results.

The hard part is yet to come - somehow persuading the two south Asian rivals not only to return to the international fold by signing up the Comprehensive Test Ban treaty and the nuclear Non-Proliferation treaty, but to turn the latest feelers for talks into a real dialogue to reduce tensions.

A G-8 statement last night demanded that both countries cease threatening military movements and cross-border violations, and prevent terrorist activity, above all around the disputed territory of Kashmir, which the Pakistani foreign minister this week warned could ignite a nuclear conflict.

Japan offered itself as a neutral site for peace talks, if the two sides so wished.