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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: 058 - (22/11/10)

Afghan operation stalls
Pakistan’s only notable success story in recent years, that is its pro-insurgency operation in neighbouring Afghanistan, was running into a delicate phase by November. The Pakistani intelligence services have been as yet unable to convince the leadership of the Taliban to sever their links to Al Qaida, a failure which resulted in the Saudi government losing patience and announcing its withdrawal from the peace talk initiative. The Saudis will not get involved again until the Taliban show a willingness to drop Al Qaida. At the same time President Karzai says that he does not want the Pakistanis to play a direct role in the talks; this is the result of a disagreement between him and the Pakistanis over the character of the talks: should they be aimed at helping Karzai co-opt segments of the armed opposition (as Karzai would like to), or should they be aimed at a comprehensive deal (which is what the Pakistanis want)? It is now a matter of seeing what Pakistan’s next move will be, faced with Karzai’s obstructionism. For the time being Pakistan is adamant that it will not allow the Americans to expand their drone operations to new parts of the country, as the US are more and more insistently demanding. The fact that drone and CIA operations in North Waziristan have been having a degree of success has stimulated Washington’s appetite for more. Islamabad has no intention of granting Washington the right to operate drones over the Quetta region, the more so as it is increasingly irritated by Washington’s opening to India’s request of getting a permanent seat in the UN Security Council.

Reform: too little, too late?
Otherwise there is not much good news from Pakistan. Progress in reclaiming control of areas previously under Taliban control is still slow and Pakistan might be heading towards a long-term insurgency. The Pakistani government is aware of the fact that mistrust over the lack of transparency in the use of gifted money has slowed donations. A UN appeal for US$2 billion in emergency aid only netted US$800 million in contributions and it does not seem likely to get much more, despite renewed appeals. The message was implicit but has also been made increasingly explicit: In November the British government formally warned Pakistan that unless the government reformed itself and became more effective in handling foreign aid, British aid to the country could be slashed. Pakistan is currently the biggest recipient of British foreign aid. British demands include an overhaul of the taxation system and of how government spends money, a new, transparent system of spending aid and an anti-corruption campaign. The Pakistani government however insists that it does not want to accept conditions being imposed by donors on how aid is being spent. Prime Minister Gilani now says that reform has started but is pleading for donors’ patience, as the effort will be slow to produce results. On-going reforms, even if successful, will fall much short of what some donors like the British are demanding. A special tax has been announced to raise US$700 million from the country’s tax payers to help reconstruction after the floods. This is not really a reform as it is a one-off, not to be repeated next year. Moreover, it will be the usual suspects to pay it, that is the salaried class, while incredibly, the really wealthy (the landlords) will, as usual not be touched. The other measures being taken include an increase from 1% to 2% in the special excise duty on non-essential goods and a reform/simplification of VAT. The hope is that a more effective system and the abolition of many exemptions will allow an extension of the tax base from 9% to 12% over the next 3-4 years.


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