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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: 026 - (26/03/08)

Coalition in the making
As expected, in March the opposition parties reached a power-sharing agreement over the formation of the new government. The PPP, the PML-N, the ANP and the Jamiat Ulema-e-Islami will be the components of the coalition and the positions will be distributed on the basis of the seats held in the parliament. The PPP, however, is still struggling to find a suitable prime ministerial candidate; the leadership of the party claims to be engaged in consultations with the base. The coalition partners seem to have agreed to reinstate the 60 judges sacked by Musharraf, but they could face opposition by the Supreme Court, now staffed with Musharraf's loyalists. 

The correlations of power are already clearly changing. Ali Asif Zardari, Benazir Bhutto's widower and current leader of the PPP, has now been cleared of corruption charges by a Pakistani court. This does not mean, however, that rumours and allegations about his links to the underworld have stopped. The Americans in particular view him as a potential political liability. Another sign that the state bureaucracy has begun to realign is the resignation of Ijaz Shah, the chief of the Intelligence Bureau, one of Pakistan's three intelligence agencies, controlled by the federal government (the other two are controlled by the army). 

Quo vadis Musharraf?
Over the last few weeks there has been much speculation about Musharraf's fate. British and American diplomatic envoys have been repeatedly reported to be putting pressure on the politicians to spare Musharraf and leave him as president. This implies not re-instating the Chief Justice, who would presumably invalidate Musharraf's election last year. The PML-N looks particularly unhappy about the British and American stance, not least because they made of the reinstatement of all the judges sacked by Musharraf one of their main battle horses. American commentators still believe that the PPP might be convinced to work with Musharraf. They are not keen, sensing that it would be expensive in terms of popularity, but Zardari's own weak position at the top of the party might give Washington some leverage and room for blackmail. Public opinion is also hostile to Musharraf staying on, as it is hostile to British and American interference. Musharraf is trying to provide additional reasons for the Americans to support him, by giving them greater freedom to carry out pilotless air strikes inside Pakistani territory, which adds to the popularity of neither. The Americans seem inclined to further exploit what they see as Pakistan's current weakness and internal division in order to enhance their position in the country. They have issued requests to allow a greater freedom of movement for its officials inside Pakistan territory and other privileges, including judicial immunity, but there is strong opposition in Pakistan by all the Ministries involved, including Defence.
 
Press reports have appeared that Musharraf was considering to resign in exchange for guarantees that he would not be prosecuted, but so far none of these has been confirmed. 

All out war or negotiations?
The position of the army has been somewhat ambiguous. Chief of staff Ashfaq Parvez Kiani has once declared his desire to stay out of politics, then the army's support for the president. It is worth noting, however, that until the beginning of March his line of action seemed to be diverging from Musharraf's. While the latter seemed ready to align closer and closer with the Americans in the effort against the militants, Kiani wanted to resume negotiations and keep military operations to a minimum. While the army was initially hostile to a fill fledged counter-insurgency campaign, the rising losses are now hardening its stance versus the militants and Kiani might have to get tougher too. Although the militants have lost much of their popularity inside Pakistan when they started killing other Pakistanis (as opposed to Indians or Afghans or foreigners), there is almost no support inside Pakistan for an alliance with the Americans against the militants. The latter, maybe sensing the shift, are now openly offering truces to the elected politicians.

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