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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: 022 - (27/11/07)

Musharraf does it again
Musharraf's declaration of the state of emergency in November caught many external observers by surprise, given that Washington had seemed to have successfully persuaded him to backtrack in August. In Pakistan, however, a feeling that something was going to happen had been building up for some days. Given that Musharraf's first actions were to remove the President of the Supreme Court and arrest lawyers, it appears that he feared a sentence of the Supreme Court against the legitimacy of his re-election, or at least that he was not ready to take such a risk. Many outside observers had believed that the Supreme Court would have confirmed his election, but Musharraf to whom it was critical, might well have had better information. That would be the most likely single factor in the decision to act in the way that he did which he must have known would cause immense domestic and international ramifications

The state of emergency has indeed proved very unpopular among the population, which responded with demonstrations in the main cities. Musharraf is now faced with limited options: either he maintains the state of emergency and completely alienates Washington, or he rapidly abolishes it but faces criticism because his claim to have acted to remedy the rising violence in the country would become completely discredited. Moreover, any chance of a deal with Bhutto and the PPP seems now to have disappeared. Bhutto and Musharraf have traded violent accusations and the beating to death of two lawyers by the police makes any prospect of reconciliation even more remote. Mass arrests of activists of both the Muslim League and the PPP do not help either. Bhutto has regained political credibility by taking a firm stand against the emergency rule and returning to the country after Musharraf's declaration from a trip abroad.

Musharraf's dilemmas
Although Musharraf has confirmed in public that he will leave the army before the end of November (he had previously agreed to do so by 15 November), such a move would further weaken him as he would no longer be able to count on the unwavering loyalty of the army while at the same time it being too little to regain the confidence of the public. Will Musharraf really want to become a very weak civilian president, with an army which might be beginning to consider him a liability? He has declared that elections will take place in February, but Bhutto has indicated that her party may not participate unless the State of Emergency is lifted. She, now released from House arrest, has also announced an alliance with her main political rival Nawaz Sharif, to work for the removal of Musharraf. To say that the situation is fluid hardly describes the uncertainties that now predominate. 

If he proceeds to organise clean parliamentary elections, he will surely face a majority hostile to him. If he rigs the elections too drastically, he will further embarrass an already very embarrassed Washington, which is threatening to suspend his aid program, even if nobody believes that they will actually do it. The Americans are also worried by the deterioration of the situation in the North-West Frontier Province, where Taliban-like elements continue to advance meeting little resistance by army and paramilitaries. Deputy Secretary of State Negroponte travelled to Islamabad to discuss matters with Musharraf, who is likely to continue to exploit the situation, benefiting from incompetent American diplomacy (they probably made it too clear to him that they had no alternative but support him) and from the geostrategic windfall of sitting next to Afghanistan. Additionally, there is no evidence to suggest that either Bhutto or Nawaz Sharif can make a better fist of fighting the fundamentalist Islamics or the frontier tribals, once more in rebellion which might indeed be a higher priority - at this time- for the international community, if not for the chattering classes of Pakistan itself. 

Economy so far hardly affected
In the immediate aftermath of the crisis, the main economic impact was that the Karachi Stock exchange fell, but not dramatically. There are also rumours that the Pakistani central bank injected $80 million to protect the rupee from a speculative attack which might have significantly weakened it otherwise. The latest IMF estimates, released in October, forecast GDP growth at 6.4% this year and at 6.5% next year, while inflation is forecast at 7.8% and 7% respectively, and no observer would for the moment being alter them. Bad news is that external debt and liabilities rose to a new record at almost $41.7 billion in July-September, but this is clearly unrelated to the political situation.

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