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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: 011 - (21/12/06)

Friends in the making?
The ongoing dispute between Pakistan and Afghanistan over the alleged Pakistani support for the insurgency in Afghanistan has demonstrated that Pakistan remains a key ally to the United States and that the Bush Administration is not ready to put Pakistan under serious pressure in order to have it secure the border with Afghanistan. The Afghans are now deluding themselves that the planned 'Peace Jirgas' to be held in Afghanistan and Pakistan will turn the situation in their favour and that Pakistan's acceptance of the Jirga concept equals an admission from the Pakistani side that that country is somewhat at fault. In reality, after the announcement of the Jirgas, Pakistani officials have been as bold as ever in their statements concerning the insurgency in Afghanistan. The Pakistani Foreign Minister told NATO representatives in private meetings that they should accept defeat in Afghanistan and start negotiating with the Taleban. General Orakzai, governor of the NWFP, openly says that the Taleban are the genuine representatives of the Afghan people. When President Karzai of Afghanistan launched the idea of organising Peace Jirgas (assemblies) on both sides of the Afghan-Pakistan border at the end of the summer to resolve the outstanding issues between the two countries and received President Bush's endorsement, President Musharraf felt compelled to agree. However, the Pakistanis have been slow in organising their Jirga and have issued no clear statement of what the composition of such Jirga will be. The pro-Afghan nationalist parties of the NWFP seem bound to be excluded, however.

However, in the long term the alliance with the US may somehow weaken, as India is stepping up its relations with Washington. In December, the Bush Administration reconfirmed that there will be no extension to Pakistan of its nuclear deal with India, which remains a unique case. Pakistan's attempts to retaliate seem to be leading nowhere. When in December Pakistan announced a tariff reduction of five percentage points on imports of almost 5,000 items as part of the South-Asian Free Trade Agreement, it made clear that India was excluded from the reduction until the 'Kashmir issue' will have been resolved. India will raise a complaint to SAFTA over the discrimination.

Opposition already starts to fragment?
During December some turmoil surfaced in the opposition ranks, hitherto seemingly united in their opposition to Musharraf and on the tactics to adopt to challenge him. The leader of a small opposition party, Pakistan Tehreek Insaf, has announced a plan to launch a campaign against Musharraf in coordination with Nawaz Sharif's party and Jamaat-i Islami, but apparently not the PPP, whose representatives have even declared to be unaware of any such plan. Moreover, the opposition parties' efforts to include the MMA in the general anti-Musharraf movement have so far failed. 
Nonetheless, relations between the MMA and Musharraf are not at their best ever. Even if Prime Minister Aziz praised the MMA for its refusal to align with the other opposition parties, he stated clearly that there will be no electoral alliance with them. Moreover, the MMA leaders resent Musharraf's anti-extremist rhetoric, which is clearly aimed at them. 

More promotions for Pakistan's economic management
In December Standard&Poor confirmed its foreign currency, local currency and sovereign ratings for Pakistan, but revised the outlook on local currency slightly upwards, following the government's efforts to rely more on longer-term local currency bonds to finance its fiscal gap. The overall ratings remain modest and within the 'B' range, due to the lacklustre progress in expanding the tax base, which is the main cause of the high government debt to revenue rate. The Pakistani press also continues to report positive economic developments, although this might also be due in part to a reluctance to criticise government performance. Remittances from abroad are growing very fast this year, with an increase of 24.3% over the previous year. Over US$2 billion were sent to Pakistan so far in 2006-7, with an obvious positive impact on the economy.

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