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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: 012 - (25/01/07)

A difficult friendship
Pressure on Pakistan for its role in fomenting unrest in Afghanistan went up once again during January, following the statements of CIA chief Negroponte, according to whom 'Al-Qaida has found a secure hideout in Pakistan', and of US Maj Gen Benjamin Freakley, who stated that a key Taleban commander was operating from inside Pakistan. 
Negroponte's statement was particularly damaging, as in the past Islamabad had claimed success in rooting out Al-Qaida, while at the same time insisting that the Taleban had to be distinguished from the former as an indigenous phenomenon with which negotiations were a necessity. By denying Pakistan's success against Al-Qaida, Negroponte implicitly hit hard at General Musharraf and implied that he has to do more to fulfil his obligations as the ally of the United States. Combined with unrelenting pressure from Afghanistan and with the difficult management of the truces in Waziristan, this contributes to threaten Musharraf's image abroad of a benevolent yet effective dictator. 

The economic front
Islamabad does not seem unduly worried about US pressure, however, if in January it signalled that it intends to go on with a plan to purchase gas from Iran, regardless of whether India also joins or not. Some observers speculate that India might drop out of the deal in order to please the Americans, who are trying to cut off Iran from as many markets as possible. Pakistan also signed a Free Trade Agreement with China in January, according to which custom duties will be gradually reduced. Exchange between the two countries already reached US$5 billion in 2006. On the economic front, the government received a lot of criticism in the parliament recently; concerning the real dimensions of its economic success. Topics of criticism ranged from a poverty rate suspiciously much lower than that estimated by the World Bank, to the negative impact on the competitiveness of the of high electricity tariffs. The government, on the other hand, continues to announce economic success after success, with the support of a rather tame press. During the first 6 months of 2006, revenue collection increased by 27%, a surprising result given that the government itself had projected a 17% rise. The achievement seems to be due not only to a buoyant economy, but also to reforms which included reduced rates and a simplified procedure. 

Opposition more and more fragmented
On the internal political front there are continuing signs of the difficulty with which the opposition is trying to create an effective common front. The pro-Musharraf front, by contrast, has already signed an agreement to jointly contest the elections, despite some divisions within the PML. The divide and rule tactics of Musharraf and his supporters are in part the reason for the splintering of the opposition. The reform of the Hodood ordnances concerning the legal rights of women has cast Musharraf as a relatively progressive president. Following his statements against extremism and the need for people to vote for moderates and not religious extremists, rumours have been circulating about the possibility of an alliance between the ruling PML and Benazir Bhutto's PPP, although the leaders of the former officially denied it. What is already clear is that Nawaz Sharif's PML and most of the other parties of the Alliance for the Restoration of Democracy are willing to boycott the elections if these are held under Musharraf, while Benazir Bhutto's PPP is inclined to participate. Even the MMA, the alliance of Islamic parties, is divided on whether to contest polls under Musharraf. The Jamiat Ulema-e-Islam seems inclined to run in the elections, while Jamaat-e-Islami has declared that it will boycott them. Of course, a deal with the PPP would imply that the PML and Musharraf would abandon the alliance with the MMA, a development that the Americans and the Europeans are very likely supporting wholeheartedly. Probably the main source of opposition to such a deal is the PML itself, as they would have then to share a substantial amount of power with the PPP at the expense of their own men. 

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