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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)

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Update No: 018 - (25/07/07)

Messier and messier
General/President Musharraf seemed to have really lost his magic touch as the Pakistani political landscape continued unravelling during July, following an army attack on the Lal Masjid mosque to free it from the control of Islamic extremists. The bloody fighting marked the beginning of a jihad against Musharraf for the country's numerous extremists. As yet unconfirmed reports suggest that the influx of extremists into Afghanistan has abated after the attack on the mosque, as volunteers are being redirected against Pakistani targets. The militants in North Waziristan declared their truce with the government over, while a wave of suicide attacks against Pakistani security targets started sweeping the country. If the climate of violence, which started with the 12 May Karachi riots, continues to unravel, it might well affect business confidence and alienate support for Musharraf among the country's business elite, one of the last sources of civilian support for the President. The one positive consequence of the violence for Musharraf is that his friends in Washington and the west will see this as a confirmation that the general/president deserves the support of the Bush Administration and western governments in the face of Islamist onslaught. Indeed Musharraf is already arguing, probably correctly, that a purely civilian government would not be able to cope with the expanding terrorist threat, while at the same time reassuring the Americans that no state of emergency will be declared and that elections will be held on time. Many, particularly the frustrated civilian politicians in Pakistan, are however already accusing Musharraf of having deliberately provoked the religious extremists in order to justify his hanging on to power. This incidentally from leading (ex-pat) politicians who only a week before were accusing him of backing away from the challenge posed by religious extremists. 

In reality, the religious extremists, particularly those finally cornered in Islamabad's Red mosque, had been accelerating their provocation by seeking to forcibly superimpose and administer their version of sharia law in the community, outside the rule of law accepted by the country as a whole. 

A judge's victory 
The decision of the Supreme Court to reinstate Chief Justice Chaudhry was somewhat of a surprise to many and clearly a reverse for Musharraf, whose ability or preparedness perhaps to impose his will on the country, appears increasingly doubtful. Musharraf made a virtue out of necessity and accepted the ruling of the Supreme Court, which was also hailed as a positive step by the Bush Administration. Washington might well be hoping that this development hails a return to the status quo ante, that is to the situation a few months ago before Musharraf blundered into removing the Chief Justice. However, one problem is that in the meanwhile, Musharraf's credibility as a soft dictator able to smoothly handle the situation has dramatically eroded. To balance that, a hard-line dictator would not have tolerated a Supreme Court telling him what to do, so it is above all a net gain for democracy 

Will the faith in the economy last?
According to the latest figures, covering the period up to 30 June, remittances from the Gulf countries are up 28% on the previous 12 months. In part this is due to the fact that Pakistani banks offer better rates than the banks in the Gulf, but it is also taken as a sign of hope in Pakistan's economic performance and stability. Remittances from other countries are also up, including from the US (+17%). However, there are signs that this confidence might be beginning to be dented. The increase was mainly concentrated in the months preceding the recent crisis. In June, the average increase in the remittances was just 9%, compared to average monthly increase of 19.5%. In November, the monthly increase had exceeded 45%.

At the same time Pakistan's trade deficit has reached its highest level ever during the 2007 fiscal year, despite record exports which for the first time have crossed the US$17 billion mark. The 3.4% increase in exports is well below government's hopes and is attributed to some analysts to the deteriorating political situation in the country. Imports, in the meanwhile, grew even faster to over US$30 billion, a 6.9% increase on the previous year. Some observers criticise the government for favouring cheap credit to consumers who use it to purchase expensive luxury items, a major factor in the continuing rise of the deficit.

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