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Key Economic Data 
  2004 2003 2002 Ranking(2004)
Millions of US $ 96,100 82,300 73,300 44
GNI per capita
 US $ 600 520 480 160
Ranking is given out of 208 nations - (data from the World Bank)

Books on Pakistan


Area (



Pakistani rupee

Pervez Musharraf



Update No: 009 - (26/10/06)

Waziristan: a good deal?
The more details about the Waziristan deal between the Pakistan government and the local militants emerge, the more it looks like total capitulation. Not only the government agreed to free the captured militants, but also to return their weapons. The army agreed to abandon its checkposts and be confined in forts, renouncing to carry out military operations. Despite all this, sporadic attacks against government troops still cause casualties. Many observers have doubts about the sustainability of the agreement and about the potential consequences, not least because other districts bordering Waziristan already show signs of advanced talibanisation. The militants seem to have perfected an infiltration technique, whereas they eliminate tribal elders and the small intelligentsia, effectively decapitating local communities and assuming their leadership. Whatever the medium and long term consequences of the Waziristan accords, in the short term it appears bound to become a resounding success, to the extent of being proposed as a model for neighbouring Afghanistan by quite a few observers, including some very close to the Bush Administration. President Musharraf himself appears to have presented the deal as an exportable model during his travel to Washington. There are indications that the Pakistanis have been stepping up their efforts to widen their network of contacts inside Afghanistan, even approaching old enemies in the north. The aim appears to favour a political agreement and isolate those who oppose such a deal, such as President Karzai and his circle in Kabul. 

Economic progress and a few bottlenecks
A recent World Bank report praised Pakistan for its progress during 2001-2005 in reducing poverty, which the Bank estimates to have declined by five percentage points. The Bank in its report identified the privatisation of the banking sector in Pakistan as a major factor of success in promoting economic growth and hence reducing poverty. However, fiscal discipline remains a key weak spot of Pakistan. For example, 11 major banks and other financial institution, now in private hands, have not filed tax returns for the last three years. No measure has been taken against the violators of the law. 

On another not-so-positive note Pakistan is facing growing difficulties in securing reliable supplies of gas, a problem which is beginning to dog other Asian economies too. Although the Pakistani government launched three separate projects in recent years to secure supplies, none of them seem about to be finalised. The Qatar project seems to have completely collapsed after the Qatari government declared that its gas reserves were insufficient for justifying the investment required by a pipeline. The Turkmenistan pipeline through Afghanistan will remain on hold until the security situation in that country improves decisively. There is now a major question, after Turkmenistan has signed a massive new supply deal with Russia as to whether they have the remaining capacity to justify the investment and risks of a pipeline to Pakistan and eventually India. 

Finally, the Iran pipeline faces the opposition of the US government, although this project seems to be the only one with any hope of making further progress in the short term. The rising cost of steel is however pushing the estimated cost of the project upwards, having now reached over US$7 billion. Moreover, Iran is trying to extract a gas price higher then India or Pakistan would like to pay. 

Breathing down Musharraf's neck
The political opposition intensified its campaign for free and fair elections in October, with Benazir Bhutto and Nawaz Sharif meeting and agreeing on a common appeal and the request of a caretaker government to manage the 2007 electoral campaign. Although the two leading opposition parties have agreed not to communicate separately with Musharraf, in practice they are known to have contacts. Bhutto's PPP for example has been cooperating with Musharraf on his proposal to repeal the discriminatory legislation against women, but so far this has not lead to a crisis of the opposition alliance.

It is quite extraordinary that these two discredited former leaders, both of them with their political power base in seperate feudal domains, both of whom in their time treated the nation like their personal property, should even be allowed back into the country. If no new bright, young, and clean politicians are to emerge, to eventually take over from Musharraf, the prospects for Pakistan are depressing.

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