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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:  - (26/11/13)

Summary: The honeymoon between Nawaz Sharif and Pakistani public opinion did not last long; now Sharif faces his inability to control or restrain the army and the failure of both his policies towards India and towards the Pakistani Taliban. On the economic front the IMF loan is only providing temporary respite, as the currency remains under heavy pressure and efforts to resolve the power generation sector crisis seems to be leading nowhere.

Honeymoon over
Nawaz Sharif’s insistence in improving relations with India is creating a lot of trouble for him, as the Pakistani army is expressing its hostility to his plans by pursuing an increasingly aggressive policy in Kashmir, where cross-border raids are more and more common. Out of 150 violations of the ceasefire since 2003, 40 have taken place in just 30 days this autumn. The Indian government is particularly upset because there are elections in 2014 in India and the nationalist BJP is mounting a serious challenge for the ruling Congress, so Indian Prime Minister Singh is publicly attacking Sharif for his failure to restrain his own army. It all looks likely to end up in a miserable failure for Sharif.

Sharif is also achieving little in terms of reaching a peace settlement with the Pakistani Taliban; the killing of Hafizullah Mehsud in November might have been the nail in the coffin of negotiations; cynics say that the Americans deliberately killed him in order to forestall an agreement, which would have diverted the Pakistani Taliban towards Afghanistan. Then later in November another strike killed some commanders of the Afghan Haqqani network, a protégé of the Pakistanis, and one of the Haqqanis himself was assassinated in Pakistan by unknown hands. In Washington there is dissatisfaction for what the Pakistanis have been able to bring to the table in recent months in terms of negotiations with the Afghan Taliban and some suspect the Pakistani game is to buy time, appease the Americans but without really delivering much to them, just enough to get the IMF to release the US$ billions Islamabad needs. Perhaps the Americans have decided to up pressure on a beleaguered Pakistani government?

Sharif also faces pressure from Iran. After relations between the two countries improved greatly under the PPP government, Sharif is suspected by the Iranians of being too dependent on Saudi support. In November a raid carried out from Pakistani territory by a radical Sunni Islamist group killed 14 Iranian border guards. Perhaps the Pakistani authorities had no role in it, but questions will surely be asked, particularly at a time when Islamabad is trying to convince the Iranians to fund the whole cost of building the planned Iran-Pakistan gas pipeline, because Islamabad dos not have the money itself, even if it desperately needs the pipeline to start addressing its energy shortages. Inside Pakistan there is considerable opposition to the project anyway, in part motivated by the desire to please Washington and the Saudis, but also by the belief that there are more viable alternatives, like investing in renovating hydropower dams. Dams are expensive, but run cheaply once they are built, while Iranian gas would be relatively expensive compared to Pakistan’s own gas.

But the IMF is happy
At the same time the Pakistani rupee is under growing pressure and the government has been responding by selling dollars, but critics argue that this is a short term response which does not address the roots of the crisis of confidence. The government remains committed to high interest rates to defend the ailing currency, but this inevitably goes at the expense of economic growth. The 35% reduction in subsidies, enforced by the government under IMF pressure, is driving inflation up; the rate hit 9.1% in October, the highest level in 16 months. Inflation has been concentrated mainly in the food (18.6%) and clothing and footwear (14.6%) sectors. Only the IMF is praising Sharif, even revising the GDP growth forecast for 2014 upwards, from 2.5% to 2.8%. The IMF also praised the plan to privatise 32 state-run companies, including two large gas companies, the state oil company, a few banks, Pakistani International Airline, and the power distribution companies.

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