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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)

Books on Pakistan


Update No: 048 - (25/01/10)

Some optimism and many lingering shadows
There is a consensus that the government has achieved something in its struggle against inflation, although some of the optimism earlier in the year might have been premature. The Central Bank raised its estimate of inflation for the ongoing financial year (ending June) from 9% to 10-12%, which however would still be a significant gain on the nearly 21% of the previous year. Similarly the current account deficit continues to narrow: in July-December 2009 it stood at US$1.76 billion, compared to US$7.85 billion a year earlier. Imports have fallen from US$18.3 billion to US$15 billion, at a time when remittances have increased.

If the national picture shows improvement, in the provinces the outlook is somewhat sombre. In the NWFP in particular, where violence is mostly concentrated, the economy is near to collapse. Many employees have been laid off, potentially adding to instability. Even in more stable environments like Karachi, Pakistan’s economic heart, the viability of economic recovery hangs on sorting out a number of key issues. Power shortages are a major one. The foreign companies like Dubai’s Abraaj, which were brought in to sort the mess out and invest in the badly underinvested sector, are struggling to make a difference.

The massive corruption and abuse affecting the sector had deterred investment in the past and the investors from the Gulf might have miscalculated when they decided to move in. The financial crisis in Dubai does not add to the confidence n the ability of the Arabs to have an impact.

The predicament of the Pakistani economy might now be worsened by a resurgent strand of populism in Islamabad. Pakistani government is now trying to shore up its increasingly weak legitimacy and support by raising the banner of economic nationalism; one of the few major foreign investment projects of the last few years, the Reko Diq copper mine, being currently developed jointly by Canada’s Barrick Gold, and Chile’s Antofagasta, risks being cancelled because the government alleges that it was contracted at giveaway prices. Regardless of the merit of the accusations, such a development would represent the death knoll for foreign investment for some years to go.

Zardari is not a quitter
Although the siege around him is tightening, Zardari seems for the moment to intend to hold on. The Supreme Court ordered the government in January to reopen the case of corruption against the President, whom it claims holds US$600 million in foreign accounts. Zardari had been asked by top state officials to resign in order to avoid the Supreme Court striking and compromising the image of the Pakistani government; they were also concerned that their own names would be exposed as many of them were also covered by Musharraf’s indemnity ordnance too. It is believed that the Pakistan army too advised Zardari to go. Zardari, however, refused. He believes he can hold on, but several observers believe that he is likely to lose the confrontation with the Supreme Court and he might even end up in jail.

Zardari is trying to make himself useful to the Pakistani establishment, if not indispensable, by working to mobilise the international community behind a massive aid programme to Pakistan, aimed at helping it fight the insurgency. He probably hopes that if his name was associated with a major inflow in cash into the country, he would recover a degree of legitimacy. But in the west, any appetite for bankrolling Zardari’s corrupt government is limited; only the prospect of an even less appealing government dominated by Zardari’s rival Nawaz Sharif, can win some support for Zardari.

 

 

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