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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: 023 - (19/12/07)

Musharraf benefits from emergency, but not enough
Polls suggest that inflation is the main concern of the electorate and that Musharraf and his governments are being blamed for it, even in rural areas. Terrorism, law and order and corruption, all rank very low in terms of concerns, with unemployment being the only other issue to mobilise voters to some extent. Musharraf’s best chances might come from the division of the opposition electorate among those who favour a boycott and those who want to vote, but despite earlier strong support for a boycott, polls show that a large majority is inclined to vote after all. Although Musharraf seems to have recovered some support after declaring emergency rule, presumably because he showed himself to have recovered some decisiveness, his support rate barely reaches 30%. 
Among the opposition leaders Bhutto has recovered some credibility after returning to the country in the wake of the declaration of emergency and after having taken a more confrontational stance against Musharraf, at the expense of Nawaz Sharif, who at the end of the summer had briefly emerged as Pakistan’s most popular leader. The result of the forthcoming elections, assuming they will not be rigged, seems to slightly favour the PPP, which is however expected to barely improve on the previous elections, where it obtained 28% of the votes. The MMA has been split by the decision of one of its key components, Jamaat-i Islami, to boycott the poll and its electoral fortunes are seen to be in decline. The PML-Q has recovered some support following the emergency, damaging the prospects of Sharif’s PML-N; the two groups now stand neck and neck in the polls. Although Musharraf lifted the state of emergency, he did so just three weeks before the vote.

Coalition on the horizon?
While the PML-Q might in the end be able to muster a decent performance and not altogether founder at the polls as it seemed possible in September, it is very unlikely that it will be able to secure a majority for Musharraf, even with the help of the MQM. Hence, either Musharraf rigs the polls or more likely he will opt for a ‘grand coalition’. In December again Musharraf hinted that such a coalition is possible. Will the PPP accept to form a coalition? It is unlikely that Bhutto will make any strong statement in this direction before the elections, considered that it would be costly in terms of popularity, but she will likely accept to negotiate after the polls, particularly if the PPP emerges as the strongest single party. There are also rumours that Shabaz Sharif, Nawaz’s more liberal brother, would lead the PML-N (or part thereof) into a coalition government.

Business sector only moderately affected so far
On the economic front, December registered a further worsening of Pakistan’s trade deficit, which during the first 5 months of the fiscal year showed a 32% increase over the same period of the previous year. Many now see the deficit as one of the major threats to Pakistan’s economic health. The fiscal deficit of the government has also increased to 1.6%, up from 1% last year. The forthcoming elections probably did not help, but the biggest increase in expenditure has been in the defence budget. Financial commentators remain however optimistic about the safety of investment in Pakistan, believing that Musharraf will manage to maintain the situation under control. Only sectors linked to internal consumption are seen as vulnerable, as the future government is expected to be forced to curb spending. However, some external investors are becoming worried and are postponing investment plans until the situation gets clearer.

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