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Books on Pakistan
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Update No: 021 - (25/10/07)
Is the deal there?
By the second half of October it was still unclear whether the deal between
Musharraf and Bhutto was standing or had even been formalised. Musharraf was
re-elected as President with the abstention of PPP parliamentarians. He even
managed to get elected while still wearing the uniform, contrary to what was
demanded by Bhutto, although he pledged to quit the army by 15 November. The
fact that he also selected former head of intelligence Lt Gen Ashfaq Pervez
Kiani as his deputy and successor in the position of Chief of Staff seems to
assure that he will indeed quit. Benazir Bhutto was granted amnesty from
corruption charges and proceeded to return to Pakistan on 18 September, welcomed
by a crowd of hundreds of thousands, but her triumphant welcome from her
supporters was terribly damaged by her procession being attacked by islamic
terrorist bombers who failed to get her, but killed 134 bystanders, with
hundreds injured - including 6 policemen dead, wounding 20 more.
Uncertainty remains concerning key forthcoming rulings of the Supreme Court on
the admissibility of Bhutto's amnesty and of Musharraf's re-election. As a
result Musharraf has so far avoided meeting another key demand of the PPP,
namely measures to guarantee free and fair elections. Most observers believe
that the Supreme Court will confirm Musharraf's election.
Musharraf-Bhutto axis increasingly unpopular
Assuming that over the next few weeks all the pieces of the deal fall in place,
the eventual success of the scheme concocted in Islamabad and Washington would
still not be assured. The popularity of Musharraf has been falling fast. The
latest polls put his support at just 21%, a third of what he was polling a year
ago and half of what he was polling this summer. The security crisis affecting
the country is certainly in part to blame for this, as many Pakistanis must have
expected that living in a soft dictatorship would at least have guaranteed a
high level of security and stability. Even more worryingly, Bhutto's popularity
has been falling too - although her reappearance in the country might change
that - and she has now been overtaken in polls by the exiled Nawaz Sharif as the
best potential prime minister. Parliamentary polls also place the Sharif's
Muslim League on top, with PPP a close second and PML-Q, Musharraf's party, a
distant third. Although polls are unreliable in Pakistan, if they have any
accuracy the trend would clearly be that of a meteoric rise in popularity of
Nawaz Sharif and his party. An electoral alliance of PPP and PML-Q might be
difficult to put together given the reciprocal distaste of the two leaderships.
Should the two parties run separately, it is conceivable that (an absentee)
Nawaz Sharif might even win a majority in the parliament. Again, it cannot yet
be assessed what effect the horror at the terrorist outrages on Benazhir
Bhutto's return might have on electoral reaction After all , Bhutto's supporters
were hailing her return, coupled with Musharraf's submittng himself for
re-election, as the return of democracy.
Investors fear violence....
Local observers hope that at least the deal with keep the flow of external aid
flowing and maybe even increasing, contributing to keep the economy move
forward. The UK has already announced a doubling in its aid to Pakistan. The
main question is whether a new government will succeed in controlling the rising
violence in Pakistan. The attack on Bhutto's convoy on 19 October clearly
worried investors and Pakistani bonds fell by half a point to 92.375 / 93.375
cents to a dollar. The October fighting in the tribal areas was the most violent
ever and featured repeated air strikes, allegedly with significant civilian
casualties.
.......but economic news is good
Economic data being released in Pakistan still mostly relates to the pre-crisis
period. Among recent releases are figures showing that the banking sector was
continuing to grow very fast. Banking is already one of the comparatively most
developed sectors of the Pakistani economy and during 2006 assets grew by
another 17%. The Pakistani banking system is considered one of the best among
emergent economies in terms of capital adequacy, asset quality and profits. The
real estate sector also seems to be holding on well despite the international
crisis, having dropped by just 3% by September. On the other hand, the
government avoid reporting on public companies like the railways or Pakistani
Airlines, which are reportedly making huge losses.
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