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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: 020 - (24/09/07)

Nawaz Sharif, the third wheel
After the Supreme Court ruled in August that Nawaz Sharif could return to Pakistan, he did try to do so in September, only to be sent off to Saudi Arabia after just four hours in his native land. While this outcome was not unexpected, the attempt to re-enter the country appears to have bolstered Sharif's popularity, particularly in his native Punjab . By contrast, the popularity of the other main opposition leader, Benazir Bhutto, is declining after she admitted to being negotiating a deal with President Musharraf. At the end of August sources very close to Musharraf gave the deal as 'almost done', following the apparent decision of Musharraf to resign as army chief by 15 November. Musharraf apparently means to quit as army chief if he is re-elected president, and to be sworn in as a civilian president, a compromise between his desire to quit after being sworn in and Bhutto's demand that he quits before the re-election. A deal might cost dearly to Bhutto since Musharraf is becoming unpopular in Pakistan: polls put those having a favourable opinion of him below 40%. While just a few months ago Nawaz Sharif seemed to have very limited support, the latest polls almost place Sharif and Bhutto neck and neck in terms of popularity. In part because of this and in part because Musharraf further compromised his credibility by ignoring the verdict of the Supreme Court on Sharif's right to return, the Bhutto-Musharraf deal is once again in doubt. 

Bhutto might be forced to refuse the offer of a deal even if her conditions were met, particularly if Sharif's eviction caused a popular backlash. For the moment being she seems to be coping with the situation by raising her price: Bhutto is now demanding not only that Musharraf resigns as chief of staff of the army and that corruption charges against her are removed, but also that he drops the presidential power to sack the prime minister. She is also asking that Musharraf drops his PML-Q party and expresses support for her PPP. The move might also be a result of doubts concerning the durability of a deal with Musharraf. 

Siege on Musharraf tightens
A Musharraf-Bhutto deal would also be weak because it is seen in Pakistan as being sponsored by the Bush Administration, which is utterly unpopular in the country. Nawaz Sharif is also likely to hit hard at Bhutto if her corruption charges are removed - but his own are not. 

Some even within the cabinet seem to be betting that Musharraf will not be able to maintain the situation under control. Not least because the courts remain random pieces on the board, still with moves to be made. Ishaq Khan Khakwani, Minister of State for Information Technology, resigned in September over Musharraf's plan to be re-elected without resigning as army chief first, maybe hoping to ingratiate Sharif and the crowds. Aware that Sharif has been gaining ground after his 'brave act', Bhutto is now planning to return to the country as soon as possible. 

Musharraf in the meanwhile is also feeling under pressure from the army, after episodes of mutiny and desertions in the NWFP. The intensified fight against Islamic militants is not popular within its ranks. The shake-up of the army's top positions in the second half of September might possibly be related to this, although it mainly appears to be meant to place Musharraf's loyalists in all key positions before he quits as army chief. It must be remembered that if he resigns as army chief, another general will be appointed to this powerful post! 

The rising climate of uncertainty is having a negative impact on foreign investment, which declined by 16% during July-August, to US$319 million. The uncertainty is beginning to be reflected in internal investment too: privatisation proceeds declined by 7.7% in July-August, to US$376 million. Lehman Brothers now advises that the risk of a Pakistani debt default is rising significantly, while Standard & Poor's already cut its credit rating outlook to "stable" from "positive" after the Lal Masjid mosque's incidents. 

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