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PAKISTAN


  
  



Key Economic Data 
 
  2004 2003 2002 Ranking(2004)
GDP
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

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Area (sq.km)
803,940

Population
162,419,946

Capital
Islamabad

Currency
Pakistani rupee

President
Pervez Musharraf

Update No: 007 - (25/08/06)

Truces and US cash
During August Pakistan continued to send signals that it has finally resolved to act against Afghan Taleban activities on its territory. After arresting a number of them in July, more were arrested in August. Although no known leader or prominent figure is among them, this is seen as at least a move in the right direction by NATO and US authorities. Sceptical observers, however, see these measures as an attempt to buy time while hoping that increased Taleban activities in Afghanistan will soon yield some results. On the other hand, Musharraf is also busy with a total overhaul of his domestic Taleban policies. The US-sponsored confrontation has brought the North-West Frontier Province to the brink of collapse, heightening tensions within Pakistan security services and costing the Pakistani army as many as 800 killed. Musharraf is said to have been inclined to withdraw the army back to India's border, but US pressure prevented him from doing so. Under a new compromise, the army will stay in the north-west but will not leave its barracks except in emergencies. At the same time, truces are being negotiated with the Pakistani Taleban. The plan is to strengthen the Pakistani paramilitary forces in the region and offer (US-funded) financial incentives to the tribal leaders to break their alliances with the extremists. 


Icebergs right and left
Musharraf's difficult navigation between uneasy friends and increasingly angry enemies is also exemplified by the recent proposal to repel the Hudood laws, which were introduced under military dictator Zia-ul Haq in order to "islamicize" the treatment of women. Musharraf is personally sponsoring the move and even chaired the parliamentary committee meetings. He, however, faced opposition from both liberals, who think he is not doing enough, and conservatives, who think that he going too far - in normal terms that might appear that he has got it about right, in the sense of what the nation, at this stage will accept. In order to appease the conservatives, who included some of his own ministers, the new law will continue to attribute to a woman witness a fourth of the value of a man. The main changes from the previous version of the law are that women will no longer be whipped as a punishment, that their offences will be bailable and that it will be less difficult for victims to prove crimes such as adultery and rape. Musharraf is clearly trying to recover political ground after the old political parties regained credibility following an end to their petty disputes and after corruption scandals have compromised the credibility of some of his allies, such as the Prime Minister Aziz himself. Until recently, the reputation for corruption of the country's two main parties, People's Party and Muslim League, had been a major asset for Musharraf. Some sectors of the army are beginning to show unease, as evidenced by a letter signed by a group of retired generals and circulated in July, asking him to give up his position of chief of the armed forces, which incidentally is also one of the American demands.


Optimism supports the Rupee
At present, the strongest interest in investing in Pakistan comes from investors based in Saudi Arabia and Dubai, who see opportunities in industries such as building, electricity, infrastructure and motor vehicles. Optimistic Pakistan observers estimate that as much as US$4 to 5 billion might come yearly from these sources, out of a potential total of as much as US$6 to 7 billion. If this potential was to be fulfilled, that would mean nearly doubling foreign direct investment in the country, up from US$3.5 billion in 2005-06. Indeed, this seems the only way through which Pakistan might be able to cope with its fast rising current accounts deficit. The optimism of these observers is for the moment being shared by the markets, as showed by the stability of the Pakistani Rupee, which in July was trading at around 60 to a dollar, just 1.5% lower than a year earlier. Pakistan's central bank is hostile to the idea of devaluing the Rupee in order to address the trade imbalance, preferring to rely on a tight monetary policy. Could Pakistan be due for some good luck?

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