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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: 027 - (28/04/08)

Controversial choice of Prime Minister
Syed Yousuf Raza Gilani was chosen as Prime Minister at the end of March, surprising many as most pundits were betting on the more popular Amin Fahimi, who indeed was quite disappointed of the choice and threatened to leave the PPP. Although the PML-N voted for Gilani with the PPP, Nawaz Sharif is reportedly unhappy about the fact that the PPP got both the premiership and the presidency of the National Assembly. The selection of Gilani is seen by many as a transitional phase, to allow Zardari (Benazir’s husband) to be elected to Parliament through by-elections and become then Prime Minister. A PPP loyalist, Gilani is seen as somebody who would not hesitate to resign if asked so. In any case appointing a relatively weak Prime minister will facilitate Zardari’s consolidation of his hold over the PPP. Zardari already behaves as the man in charge, while Musharraf has been almost completely sidelined. Both Gilani and Fahimi belong to the feudal wing of the PPP, which shows who really controls the party. 

Government taking shape
The policies of the new government are beginning to gradually take shape. Everybody expects the sacked judges to be reinstated, which will likely lead to the annullation of Musharraf’s re-election, or more likely to a lengthy legal battle since there is already a bench of judges in place. It appears that the army is not intentioned to intervene in politics for the time being, a fact which if the case, will certainly encourage those politicians whose priority this is, (primarily Nawaz Sharif, the PPP is less rabid on this issue), to dispose of Musharraf now that it could more easily be done, although changing the constitution to facilitate that may be beyond this governments capability. Another likely measure of the new government is a massive downsizing of top level bureaucracy. It is alleged that previous government hired many against merit and granted huge salaries and that they should be sacked. Of course it must be remembered that the new political administration after all these years in the wilderness, will want their own placemen in top jobs. 

Other forthcoming decisions are however going to be unpopular. For example, the new government will likely have to make some belt-tightening decisions, which explains why Zardari is so keen to include as many parties in the administration: popular resentment would be spread wide.

The prospects of the new government cracking down on the sources of Islamic radicalism appear dimmer and dimmer. The opposition PML-Q says that Madrassas are playing a role as the ‘ideological fortresses’ of the country, while prime minister Gilani announced that his government would seek peace with the Taliban. The ANP, which is part of the ruling coalition, says that the priority is to end violence and pushes for the withdrawal of the army from Swat. American pressure is unlikely to alter this picture, as public opinion is very much behind the attempt to negotiate an end to the violence. The militants, moreover, repeat all the time that they do not oppose the Pakistani state.

Forecasts point to stable economy
The latest economic forecasts all converge in expecting slightly faster growth next year. A UN economic forecast estimates that GDP growth will reach 6.5% during the current year, despite the fact that both imports and exports are slowing their growth rate. The IMF estimates 6% and 6.7% for next year, while the ADB estimates 6.3% growth this year and 6.5% next year. Nonetheless Pakistan could do better. It is lagging behind India and Iran in the development of port facilities to cater for trade with Central Asia. The new Pakistani port of Gwadar is still missing rail and road links to the rest of the country, allowing the Iranian port of Chabahar to emerge as a more competitive alternative despite theoretically higher costs. India invested heavily in the road infrastructure leading to Chabahar. 

An attempt to reform the notoriously inefficient Pakistan Railways started in April. It consists in the setting up of commercial ventures on 33 years lease. The main purpose is to raise funds for development and upgrade projects. 

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