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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: 059 - (24/12/10)

Coalition loses a piece
The departure from the ruling coalition of the Jamiat-e-Ulema-e-Islam over a corruption scandal, involving a PPP minister and the pilgrimage to Mecca. With just 7 seats in the parliament, these defections do not critically undermine the government but certainly weaken it. The government has also been weakened by the leaks of US diplomatic cables, which showed both President Zardari and Prime Minister Gilani very happy to welcome US drone raids against militants, and openly stating that they would hypocritically denounce the raids to the Pakistani public, but then take no action. This weaker and weaker government is at least assured that the army is not going to take power again anytime soon: it is clear also from the leaked US cables that if anything, the army would move to force Zardari to resign, but keep the PPP government and Prime Minister Gilani in place.

Last hope for the privatisation plan
The government has in the meanwhile made progress in putting together a privatisation plan. The plan foresees the sell-out of minority stakes in state owned companies in sectors such as electricity, railways, steel, oil and gas, with the short term aim of bringing in foreign capital and expertise to re-launch the companies (now not exactly well managed), before it sells an even large stake and loses control. While there is a plan, there is also growing scepticism that it can work, because of the government’s tendency to rely on cronyism and nepotism in appointing managers to state-owned enterprises. Some observers believe that bad management has taken these companies near the point where they are not saleable anymore. The hope is that by early next year, at least one or two foreign investors might be ready to sign a deal, injecting credibility into the process and enabling it to attract more interest.

Army goes public with Afghan plan
The Pakistani army have determined that in order to push ahead their plan for an Afghan peace settlement they had to go public with it, presumably hoping that having the offer on the table would catalyse some attention in western public opinion and force the Americans to accelerate their decision making process. The talks with Karzai have stalled over his unwillingness to reach a comprehensive deal and the Pakistani army’s remaining option is to get Washington on board; in turn Washington could put pressure on Karzai. At the same time figures like general and former self- imposed president Musharraf, hint from his exile in the UK that the alternative to a settlement in Pakistan’s terms is an intensification of Pakistani support for the insurgents. The Pakistani calculus is that the Americans believe that Pakistan is essential to the United States, as demonstrated by the ever rising level of support, and that they will not abandon their South Asian ally, despite its treacherous behaviour, hence they can afford quite a bit of brinkmanship. From Washington’s point of view it is a paradox that the more they give to Pakistan, the more the Pakistanis feel that they can push harder. The American intelligence agencies believe that the behaviour of the Pakistani army cannot be changed and that they will never give up their support of the Afghan Taliban, a view confirmed in the latest assessment of the Afghan conflict.

The Pakistani Taliban insurgency in the meanwhile continues to adapt to its new circumstance of a guerrilla movement. It is clearly diversifying its sources of income, as the Americans and the Pakistani authorities have been having some success in cutting off funding from abroad. Now the Pakistani Taliban rely more on imposed taxation, looting ISAF supplies and kidnapping for ransom.

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