For current reports go to EASY FINDER



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


Update No: 016 - (29/05/07)

Musharraf is losing his magic touch
In yet another sign that Musharraf is no longer able to control effectively the Pakistani political scene, during May bloody riots hit the city of Karachi. The riots hurt Musharraf for two reasons. First, he had built an image of an effective manager who was much more competent than his civilian predecessors at maintaining law and order. The fact that the riots had an ethnic character only made things worse. Second, the riots were organised by one of Musharraf's allies, the MQM party, against supporters of the opposition. As a result they probably sank any prospect of a deal with the opposition PPP. In the new situation created by the riots, which killed over 40, it has become politically unfeasible for the leadership of the PPP to strike a deal with Musharraf. Some observers believe that Benazir Bhutto and her feudal allies within the PPP might still be inclined towards a deal, as the best alternative to outstanding corruption charges being pressed forward. However, the urban-based leaders of the party, who have a more social-democratic background, are resolutely opposed. That the possibility of a deal is now off is also confirmed by Musharraf's own statement that both Bhutto and the leader of the opposition Muslim League are barred from returning to the country before the forthcoming legislative elections. Last month it had seemed that the way had been cleared for Bhutto to return. This development also represent a major upset for Washington, which had been sponsoring a Musharraf-Bhutto alliance as the only option able to stabilise Pakistan and offer a plausible option to inject more 'democracy' in the system. Washington seems to have believed that Bhutto alone would not be able to control the military and confront the radical Islamists, while at the same time it was obvious that Musharraf is running out of steam.
A further sign of Musharraf's difficulties was the creation of three regional commands of the army, a move widely seen as both an attempt to facilitate Musharraf's task and make a move against him more difficult. The three new regional commanders will take away some of the burden from Musharraf, while at the same time making it more difficult for the army top brass to unify around a common agenda. 

No impact on economy yet
For the moment the ongoing political crisis shows no signs of affecting the economic situation. The government claims that Pakistan is on track to hit 7% GDP growth this year, although the Asian Development Bank forecasts that growth will slow to 6.5% next year due to poor infrastructure. Even the interest of foreign investors seems not to be suffering, although it is clearly still too early to say. The government estimate that foreign investment will reach US$6.5 billion this year. Just before the riots, the Karachi stock exchange had hit an all-time high. The Lahore stock exchange showed no sign of concern for the political situation over the last several weeks. The fact that the Pakistani rupee has been appreciating against the dollar despite the ever-increasing trade deficit is also a sign of enduring confidence. Following Moody's recent upgrade of Pakistan's debt, Islamabad is even planning a new issue of foreign currency denominated bonds to finance its infrastructural projects, although some observers are beginning to argue that Pakistan will have to offer a higher yield to offset a rising perception of political and security risk. The fact that the government is exceeding its own targets in terms of raising more revenue helps in maintaining the confidence of the creditors, even if Islamabad continues to borrow more than most economists would like to see.

 « Top  

« Back


Published by 
Newnations (a not-for-profit company)
PO Box 12 Monmouth 
United Kingdom NP25 3UW 
Fax: UK +44 (0)1600 890774