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Economy of Pakistan

The World Bank considers Pakistan a low-income country. GDP is around $166 billion at the official exchange rate. The population numbered some 167 million in 2008 with a 1.81% growth rate. No more than 55.0% of adults are literate, and life expectancy is about 64 years. In FY 2008-2009, the GDP growth rate was 3.7%, and unemployment was estimated at 14%. Year-over-year consumer price inflation averaged 13.6% in 2009. Main inflation drivers include food and utility prices, the Pakistani rupee’s depreciation versus the U.S. dollar, and higher international commodity prices. Low levels of spending in the social services and high population growth have contributed to persistent poverty and unequal income distribution. Pakistan's extreme poverty and underdevelopment are key concerns, especially in rural areas. The country’s economy remains vulnerable to internal and external shocks due to internal security concerns and the global financial crises.

Reform, Aid, and Debt
Despite its economic and political difficulties, Pakistan has taken some steps over the years to liberalize its trade and investment regimes, either unilaterally or in the context of commitments made with the World Trade Organization (WTO), International Monetary Fund (IMF), and the World Bank. Pakistan has received significant loan/grant assistance from international financial institutions (e.g., the IMF, the World Bank, and the Asian Development Bank (ADB)) and bilateral donors, particularly after it began using its military/financial resources in counterterrorism efforts.

In 2000, the government made significant macroeconomic reforms: privatizing Pakistan's state-subsidized utilities, reforming the banking sector, instituting a world-class anti-money laundering law, cracking down on piracy of intellectual property, and moving to quickly resolve investor disputes. After the September 11, 2001 terrorist attacks in the United States and Pakistan's proclaimed commitment to fighting terror, many international sanctions, particularly those that had been imposed by the United States, were lifted. Pakistan's economic prospects began to increase significantly due to unprecedented inflows of foreign assistance at the end of 2001, and the trend was expected to continue through 2009. In 2002, the United States led Paris Club efforts to reschedule Pakistan's debt on generous terms, and in April 2003 the United States reduced Pakistan's bilateral official debt by $1 billion. In 2004, approximately $500 million more in bilateral debt relief was granted. Foreign exchange reserves and exports grew to record levels after a sharp decline. The IMF lauded Pakistan for its commitment in meeting lender requirements for a $1.3 billion IMF Poverty Reduction and Growth Facility loan, which it completed in 2004, forgoing the final permitted tranche. The Government of Pakistan was successful in issuing sovereign bonds; it issued $600 million in Islamic bonds, putting Pakistan back on the investment map.

On October 8, 2005, a magnitude 7.6 earthquake struck Pakistan, India, and Afghanistan. The epicenter of the earthquake was near Muzaffarabad, the capital of Pakistani-administered Kashmir, and approximately 60 miles north-northeast of Islamabad. An estimated 75,000 people were killed and 2.5 million people were left homeless. The disaster of such a huge magnitude galvanized an international rescue and reconstruction effort in support of the affected region. The earthquake cost Pakistan $1.1 billion in resettling those affected. Despite the 2005 earthquake, GDP growth remained strong at 6.6% in fiscal year 2005-2006. Consumer price inflation eased slightly to an average of 8% in 2005-2006 from 9.3% in 2004-2005.

In 2008, the ratio of total debt and liabilities to GDP, a broad measure of the country's capacity to sustain debt, saw an end to a 7-year declining trend, rising in FY 2008 to 60%. The stock of Pakistan's total debt and liabilities increased by 27% year on year in 2008, to PKR 6,417.4 billion (U.S. $80.7 billion at 79.5 rupees per dollar), with a commensurate deterioration in debt sustainability indicators. The fiscal deficit widened from 5.6% of GDP in 1994-95, to 7.7% in 1997-98, and to 5.4% in 2008-2009. Support for loss-making, state-owned enterprises; fuel subsidies; and a weak domestic tax base have been critical elements in the recurring fiscal deficits.

In October 2008, Pakistan entered into a 23-month Stand-By Arrangement with the IMF in order to keep the country solvent and to support its foreign exchange reserves, which had fallen to precariously low levels. The $11.3 billion IMF loan supports two key objectives of restoring macroeconomic stability and confidence in the economy through a significant tightening of macroeconomic policies and ensuring social stability and adequate support for the poor. Other reforms include improvements in banking and tax legislation, phasing out electricity subsidies, and reducing foreign exchange market intervention by the State Bank of Pakistan. A contingency plan for handling problem banks has been prepared and is being strengthened; an action plan to reform tax policy and administration has been adopted and will be implemented with technical assistance from the IMF and the World Bank.

Pakistan remains dependent on IMF and other international assistance for budgetary support and to keep the country more or less solvent. So far, Pakistan has met some of the IMF benchmarks, most recently implementing a 13.6% increase in electricity prices in January 2010. In 2009, Pakistan also received $2.11 billion in aid from the “Friends of Pakistan” group of allies, who pledged $5.7 billion in total.

Agriculture and Natural Resources
Pakistan's principal natural resources are arable land, water, hydroelectric potential, and natural gas reserves. About 28% of Pakistan's total land area is under cultivation and is watered by one of the largest irrigation systems in the world. Agriculture accounts for about 21% of GDP and employs about 42% of the labor force. The most important crops are cotton, wheat, rice, sugarcane, fruits, and vegetables, which together account for more than 75% of the value of total crop output. Despite intensive farming practices, Pakistan remains a net food importer. Pakistan exports rice, fish, fruits, and vegetables and imports vegetable oil, wheat, cotton (net importer), pulses, and consumer foods.

The economic importance of agriculture has declined since independence, when its share of GDP was around 53%. Following the poor harvest of 1993, the government introduced agriculture assistance policies, including increased support prices for many agricultural commodities and expanded availability of agricultural credit. From 1993 to 1997, real growth in the agricultural sector averaged 5.7% but declined to 4.7% in FY 2008-2009.

Pakistan has extensive energy resources, including fairly sizable natural gas reserves, some proven oil reserves, coal, and large hydropower potential. However, exploitation of energy resources has been slow due to a shortage of capital and domestic and international political constraints. For instance, domestic gas and petroleum production totals only about half the country's energy needs, and dependence on imported oil contributes to Pakistan's persistent trade deficits and shortage of foreign exchange.

Industry
Pakistan's manufacturing sector accounts for about 25% of GDP. Cotton textile production and apparel manufacturing are Pakistan's largest industries, accounting for about 51.4% of total exports. Other major industries include food processing, beverages, construction materials, clothing, and paper products. Manufacturing sector growth has slowed in the last 2 years due to energy shortages and capacity constraints. However, the sector is forecast to grow 5.5% for FY 2010. Despite government efforts to privatize large-scale parastatal units, the public sector continues to account for a significant proportion of industry. The government seeks to diversify the country's industrial base and bolster export industries. Net foreign investment in Pakistani industries is only 0.5% of GDP. Pakistan's search for additional foreign direct investment has been hampered by concerns about the security situation, domestic and regional political uncertainties, and questions about judicial transparency.

Foreign Trade
Weak world demand for its exports and domestic political uncertainty have contributed to Pakistan's high trade deficits. In FY 2008, the trade deficit was over $15 billion. In the 2008-2009 budget, the Government of Pakistan raised the maximum tariffs from the 20%-25% range to the 30%-35% range on 300 luxury items due to the large trade gap and growing current account deficit. In the 2009-2010 fiscal year, Pakistan’s trade deficit decreased to $10.92 billion as a result of a decline in imports and a slight increase in exports.

Major imports, which fell to $28.4 billion in 2009, include petroleum and petroleum products, edible oil, wheat, chemicals, fertilizer, capital goods, industrial raw materials, and consumer products. Energy imports account for nearly 30% of Pakistan's imports, and the total gap between electricity supply and demand in Pakistan is over 4,800 megawatts (MW). The ongoing energy crisis and security concerns, together with a decline in global demand, have hampered Pakistan’s textile-reliant export base. Pakistan's exports continue to be dominated by cotton textiles and apparel, despite government diversification efforts.

Real GDP growth rate (2009 est.): 2.7%.
Per capita GDP (year ending 2009, purchasing power parity): $2,600.
Natural resources: Arable land, natural gas, limited oil, substantial hydropower potential, coal, iron ore, copper, salt, limestone.
Agriculture: Products--wheat, cotton, rice, sugarcane, eggs, fruits, vegetables, milk, beef, mutton.
Industry: Types--textiles & apparel, food processing, pharmaceuticals, construction materials, shrimp, fertilizer, and paper products.
Trade (2009 est.): Exports--$17.87 billion: textiles (garments, bed linen, cotton cloth, and yarn), rice, leather goods, sports goods, carpets, rugs, chemicals and manufactures. Major partners (2008)--U.S. 16%, United Arab Emirates 11.7%, Afghanistan 8.6%, U.K. 4.5%, China 4.2%. Imports--$28.31 billion: petroleum, petroleum products, machinery, plastics, paper and paper board, transportation equipment, edible oils, pulses, iron and steel, tea. Major partners (2008)--China 14.1%, Saudi Arabia 12%, U.A.E. 11.2%, Kuwait 5.4%, India 4.8%, U.S. 4.7%, Malaysia 4.1%.

Geography of Pakistan

Location: Southern Asia, bordering the Arabian Sea, between India and Iran Map references: Asia Area: total area: 803,940 sq km land area: 778,720 sq km comparative area: slightly less than twice the size of California Land boundaries: total 6,774 km, Afghanistan 2,430 km, China 523 km, India 2,912 km, Iran 909 km Coastline: 1,046 km Maritime claims: contiguous zone: 24 nm continental shelf: 200 nm or to the edge of the continental margin exclusive economic zone: 200 nm territorial sea: 12 nm International disputes: status of Kashmir with India; border question with Afghanistan (Durand Line); water-sharing problems (Wular Barrage) over the Indus with upstream riparian India Climate: mostly hot, dry desert; temperate in northwest; arctic in north Terrain: flat Indus plain in east; mountains in north and northwest; Balochistan plateau in west Natural resources: land, extensive natural gas reserves, limited petroleum, poor quality coal, iron ore, copper, salt, limestone Land use: arable land: 23% permanent crops: 0% meadows and pastures: 6% forest and woodland: 4% other: 67% (1993) Irrigated land: 170,000 sq km (1992) Environment: current issues: water pollution from raw sewage, industrial wastes, and agricultural runoff; limited natural fresh water resources; a majority of the population does not have access to potable water; deforestation; soil erosion; desertification natural hazards: frequent earthquakes, occasionally severe especially in north and west; flooding along the Indus after heavy rains (July and August) international agreements: party to - Biodiversity, Climate Change, Endangered Species, Environmental Modification, Hazardous Wastes, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Wetlands; signed, but not ratified - Desertification, Law of the Sea, Marine Life Conservation Note: controls Khyber Pass and Bolan Pass, traditional invasion routes between Central Asia and the Indian Subcontinent

Government of Pakistan

GOVERNMENT AND POLITICAL ORGANIZATION
The president is chosen for a 5-year term by an electoral college consisting of the Senate, National Assembly, and the provincial assemblies. The prime minister is selected by the National Assembly for a 4-year term. The bicameral parliament--or Majlis-e-Shoora--consists of the Senate (100 seats; members are indirectly elected by provincial assemblies) and the National Assembly (342 seats; 60 seats reserved for women, 10 seats reserved for minorities). Each of the four provinces--Punjab, Sindh, Khyber-Pakhtunkhwa, and Balochistan--has a Chief Minister and provincial assembly. The Northern Areas, Azad Kashmir, and the Federally Administered Tribal Areas (FATA) are administered by the federal government but enjoy considerable autonomy. The cabinet, National Security Council, and governors serve at the president's discretion.

The judicial system comprises a Supreme Court, provincial high courts, and Federal Islamic (or Shari'a) Court. The Supreme Court is Pakistan's highest court. With the 18th Amendment now in place, the president names the most senior Supreme Court justice to be chief justice; also, the courts’ and Parliament’s influence are increased through a new judicial commission to oversee judges’ appointments. Each province, as well as Islamabad, has a high court, the justices of which are appointed by the president after conferring with the chief justice of the Supreme Court and the provincial chief justice. The judiciary is proscribed from issuing any order contrary to the decisions of the president. Federal Sharia Court hears cases that primarily involve Sharia, or Islamic law. Legislation enacted in 1991 gave legal status to Sharia. Although Sharia was declared the law of the land, it did not replace the existing legal code.

According to the constitution, Pakistan is a federation of four provinces: Balochistan, Khyber-Pakhtunkhwa, Punjab, and Sindh. Governors appointed by the president head the provinces. There is also the Federally Administered Tribal Areas (FATA), comprised of seven agencies, and the Islamabad Capital Territory, which consists of the capital city of Islamabad. These areas and territory are under the jurisdiction of the federal government. The Northern Areas are administered as a de facto "Union Territory" and are treated as an integral part of Pakistan. The Pakistani-administered portion of the disputed Jammu and Kashmir region includes Azad Kashmir, a separate and autonomous government that maintains strong ties to Pakistan.

Principal Government Officials
President (head of state)--Asif Ali Zardari
Prime Minister (head of government)--Yousef Raza Gilani
Minister of Foreign Affairs--Makhdoom Shah Mahmood Qureshi
Ambassador to the U.S.--Husain Haqqani
Ambassador to the UN--Abdullah Hussain Haroon

Pakistan maintains an embassy (web site: http://www.pakistan-embassy.org/) in the United States at 3517 International Court NW, Washington, DC 20008 (tel. 202-243-6500). It has consulates in Los Angeles, New York, Chicago, and Houston.

Type: Parliamentary democracy.
Independence: August 14, 1947.
Branches: Executive--president (chief of state), prime minister (head of government). Legislative--bicameral Parliament or Majlis-e-Shoora (100-seat Senate, 342-seat National Assembly). Judicial--Supreme Court, provincial high courts, Federal Islamic (or Shari'a) Court.
Political parties: Pakistan People's Party (PPP), Pakistan Muslim League-Nawaz (PML-N), Awami National Party (ANP), Pakistan Muslim League (PML), Muttahid Majlis-e-Amal (umbrella group) (MMA), and Muttahida Qaumi Movement (MQM).
Suffrage: Universal at 18.
Political subdivisions: 4 provinces (Punjab, Sindh, Balochistan, and Northwest Frontier); also the Federally Administered Tribal Areas (composed of 7 tribal agencies--Bajaur, Mohmand, Khyber, Kurram, Orakzai, North Waziristan, and South Waziristan) and the Pakistani-administered portion of the disputed Jammu and Kashmir region (Azad Kashmir and the Northern Areas).

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History of Pakistan

Pakistan, along with parts of western India, contains the archeological remains of an urban civilization dating back 4,500 years. Alexander the Great included the Indus Valley in his empire in 326 B.C., and his successors founded the Indo-Greek kingdom of Bactria based in what is today Afghanistan and extending to Peshawar. Following the rise of the Central Asian Kushan Empire in later centuries, the Buddhist culture of Afghanistan and Pakistan, centered on the city of Taxila just west of Islamabad, experienced a cultural renaissance known as the Gandhara period. Pakistan's Islamic history began with the arrival of Muslim traders in the 8th century in Sindh. The collapse of the Mughal Empire in the 18th century provided an opportunity for the English East India Company to extend its control over much of the subcontinent. The Sikh adventurer, Ranjit Singh, carved out a dominion that extended from Kabul to Srinagar and Lahore, encompassing much of the northern area of modern Pakistan. British rule replaced the Sikhs in the first half of the 19th century. In a decision that had far-reaching consequences, the British permitted the Hindu Maharaja of Kashmir, a Sikh appointee, to continue in power. Pakistan emerged from an extended period of agitation by Muslims in the subcontinent to express their national identity free from British colonial domination as well as domination by what they perceived as a Hindu-controlled Indian National Congress. Muslim anti-colonial leaders formed the All-India Muslim League in 1906. Initially, the League adopted the same objective as the Congress--self-government for India within the British Empire--but Congress and the League were unable to agree on a formula that would ensure the protection of Muslim religious, economic, and political rights. Pakistan and Partition The idea of a separate Muslim state in British India first emerged in the 1930s. On March 23, 1940, Muhammad Ali Jinnah, leader of the Muslim League, formally endorsed the "Lahore Resolution," calling for the creation of an independent state in regions where Muslims constituted a majority. At the end of World War II, the United Kingdom moved with increasing urgency to grant India independence. The Congress Party and the Muslim League, however, could not agree on the terms for a Constitution or establishing an interim government. In June 1947, the British Government declared that it would bestow full dominion status upon two successor states--India and Pakistan, formed from areas in the subcontinent in which Muslims were the majority population. Under this arrangement, the various princely states could freely join either India or Pakistan. Accordingly, on August 14, 1947 Pakistan, comprising West Pakistan with the provinces of Punjab, Sindh, Balochistan, and the Northwest Frontier Province (NWFP), and East Pakistan with the province of Bengal, became independent. East Pakistan later became the independent nation of Bangladesh in 1971. The Maharaja of Kashmir was reluctant to make a decision on accession to either Pakistan or India. However, armed incursions into the state by tribesman from the NWFP led him to seek military assistance from India. The Maharaja signed accession papers in October 1947 and allowed Indian troops into the state. The Government of Pakistan, however, refused to recognize the accession and campaigned to reverse the decision. The status of Kashmir remains in dispute to this day. After Independence With the death in 1948 of its first head of state, Muhammad Ali Jinnah, and the assassination in 1951 of its first Prime Minister, Liaqat Ali Khan, political instability and economic difficulty became prominent features of post-independence Pakistan. On October 7, 1958, President Iskander Mirza, with the support of the army, suspended the 1956 constitution, imposed martial law, and canceled the elections scheduled for January 1959. Twenty days later the military sent Mirza into exile in Britain and Gen. Mohammad Ayub Khan assumed control of a military dictatorship. After Pakistan's loss in the 1965 war against India, Ayub Khan's power declined. Subsequent political and economic grievances inspired agitation movements that compelled his resignation in March 1969. He handed over responsibility for governing to the Commander-in-Chief of the Army, General Agha Mohammed Yahya Khan, who became President and Chief Martial Law Administrator. General elections held in December 1970 polarized relations between the eastern and western sections of Pakistan. The Awami League, which advocated autonomy for the more populous East Pakistan, swept the East Pakistan seats to gain a majority in Pakistan as a whole. The Pakistan Peoples Party (PPP), founded and led by Ayub Khan's former Foreign Minister Zulfikar Ali Bhutto, won a majority of the seats in West Pakistan, but the country was completely split with neither major party having any support in the other area. Negotiations to form a coalition government broke down. On March 26, 1971, following a bloody crackdown by the Pakistan Army, Bengali nationalists declared an independent People's Republic of Bangladesh. As fighting grew between the army and the Bengalis, an estimated 10 million Bengalis sought refuge in India. On April 17, 1971, Bengali nationalists formed a provisional government in an area bordering India, and in November 1971, India sent its military into East Pakistan to intervene on the side of the Bangladeshis. On December 16, Pakistani forces surrendered in Dhaka, and East Pakistan became the new nation of Bangladesh. Yahya Khan then resigned the presidency and handed over leadership of the western part of Pakistan to Bhutto, who became President and the first civilian Chief Martial Law Administrator. Bhutto moved decisively to restore national confidence and pursued an active foreign policy, taking a leading role in Islamic and Third World forums. Although Pakistan did not formally join the Non-Aligned Movement until 1979, the position of the Bhutto government coincided largely with that of the non-aligned nations. Domestically, Bhutto pursued a populist agenda and nationalized major industries and the banking system. In 1973, he promulgated a new Constitution accepted by most political elements and relinquished the presidency to become prime minister. Although Bhutto continued his populist and socialist rhetoric, he increasingly relied on Pakistan's urban industrialists and rural landlords. Over time the economy stagnated, largely as a result of the dislocation and uncertainty produced by Bhutto's frequently changing economic policies. When Bhutto proclaimed his own victory in the March 1977 national elections, the opposition Pakistan National Alliance (PNA) denounced the results as fraudulent and demanded new elections. Bhutto resisted and later arrested the PNA leadership. Muhammad Zia ul-Haq With increasing anti-government unrest, the army grew restive. On July 5, 1977, the military removed Bhutto from power and arrested him, declared martial law, and suspended portions of the 1973 Constitution. Chief of Army Staff Gen. Muhammad Zia ul-Haq became Chief Martial Law Administrator and promised to hold new elections within 3 months. Zia released Bhutto and asserted that he could contest new elections scheduled for October 1977. However, after it became clear that Bhutto's popularity had survived his government, Zia postponed the elections and began criminal investigations of the senior PPP leadership. Subsequently, Bhutto was convicted and sentenced to death for alleged conspiracy to murder a political opponent. Despite international appeals on his behalf, Bhutto was hanged on April 6, 1979. Zia assumed the presidency and called for elections in November. However, fearful of a PPP victory, Zia banned political activity in October 1979, and postponed national elections. This same year Zia also passed into law the Hudood Ordinance, which provides for harsh Quranic punishments for violations of Shari'a (Islamic law). In 1980, most center and left parties, led by the PPP, formed the Movement for the Restoration of Democracy (MRD). The MRD demanded Zia's resignation, an end to martial law, new elections, and restoration of the Constitution, as it existed before Zia's takeover. In early December 1984, President Zia proclaimed a national referendum for December 19 on his "Islamization" program. After non-party based polls were held for the National and Provincial Assemblies in 1985, President Zia appointed Muhammad Khan Junejo as the Prime Minister. He implicitly linked approval of "Islamization" with a mandate for his continued presidency. Zia's opponents, led by the MRD, boycotted the elections. When the government claimed a 63% turnout, with more than 90% approving the referendum, many observers questioned the figures. Sharif and Bhutto Civilian Governments On August 17, 1988, a plane carrying President Zia, American Ambassador Arnold Raphel, U.S. Brig. General Herbert Wassom, and 28 Pakistani military officers crashed on a return flight from a military equipment trial near Bahawalpur, killing all on board. In accordance with the Constitution, Chairman of the Senate Ghulam Ishaq Khan became Acting President and announced that elections scheduled for November 1988 would take place. Elections were held on a party basis. On one side was an eight-party alliance and on the other, the PPP. The PPP won 94 seats out of 207 and the Islamic Democratic Alliance (IJI) won 54. Muhammad Khan Junejo lost from his home constituency. The president was bound to invite the PPP to from the government, but he delayed doing so for two weeks in order to give the IJI time to muster the support of other groups. Ultimately, the president asked PPP Co-chairperson Benazir Bhutto to form a government. The PPP, under Benazir Bhutto's leadership, succeeded in forming a coalition government with several smaller parties, including the Muttahida Qaumi Movement (MQM). Differing interpretations of constitutional authority, debates over the powers of the central government relative to those of the provinces, and the antagonistic relationship between the Bhutto administration and opposition governments in Punjab and Balochistan seriously impeded social and economic reform programs. Ethnic conflict, primarily in Sindh province, exacerbated these problems. A fragmentation in the governing coalition and the military's reluctance to support an apparently ineffectual and corrupt government were accompanied by a significant deterioration in law and order. In August 1990, President Khan, citing his powers under the eighth amendment to the Constitution, dismissed the Bhutto government and dissolved the national and provincial assemblies. New elections, held in October 1990, confirmed the political ascendancy of the IJI. In addition to a two-thirds majority in the National Assembly, the alliance won control of all four provincial parliaments and enjoyed the support of the military and of President Khan. Muhammad Nawaz Sharif, as leader of the PML, the most prominent party in the IJI, was elected prime minister by the National Assembly. Sharif emerged as the most secure and powerful Pakistani prime minister since the mid-1970s. Under his rule, the IJI achieved several important political victories. The implementation of Sharif's economic reform program; involving privatization, deregulation, and encouragement of private sector economic growth, greatly improved Pakistan's economic performance and business climate. The passage into law in May 1991 of a Shari'a bill, providing for widespread Islamization, legitimized the IJI government among much of Pakistani society. However, Nawaz Sharif was not able to reconcile the different objectives of IJI's constituent parties. The largest religious party, Jamaat-i-Islami (JI), abandoned the alliance because of its antagonism to what it regarded as PML hegemony. The government was weakened further by the military's suppression of the MQM, which had entered into coalition with the IJI to contain PPP influence, and allegations of corruption directed at Nawaz Sharif. In April 1993, President Khan, citing "maladministration, corruption, and nepotism" and espousal of political violence, dismissed the Sharif government, but the following month the Pakistan Supreme Court reinstated the National Assembly and the Nawaz Sharif government. Continued tensions between Sharif and Khan resulted in governmental gridlock and the Chief of Army Staff brokered an arrangement under which both the President and the Prime Minister resigned their offices in July 1993. An interim government, headed by Moeen Qureshi, a former World Bank Vice President, took office with a mandate to hold national and provincial assembly elections in October. Despite its brief term, the Qureshi government adopted political, economic, and social reforms that generated considerable domestic support and foreign admiration. In the October 1993 elections, the PPP won a plurality of seats in the National Assembly, and Benazir Bhutto was asked to form a government. However, because it did not acquire a majority in the National Assembly, the PPP's control of the government depended upon the continued support of numerous independent parties, particularly the PML/J (Pakistan Muslim League-Junejo). The unfavorable circumstances surrounding PPP rule--the imperative of preserving a coalition government, the formidable opposition of Nawaz Sharif's PML/N (Pakistani Muslim League-Nawaz) movement, and the insecure provincial administrations--presented significant difficulties for the government of Prime Minister Bhutto. However, the election of Prime Minister Bhutto's close associate, Farooq Leghari, as President in November 1993 gave her a stronger power base. In November 1996, President Leghari dismissed the Bhutto government, charging it with corruption, mismanagement of the economy, and implication in extrajudicial killings in Karachi. Elections in February 1997, resulted in an overwhelming victory for the PML/N, and President Leghari called upon Nawaz Sharif to form a government. In March 1997, with the unanimous support of the National Assembly, Sharif amended the Constitution, stripping the President of the power to dismiss the government and making his power to appoint military service chiefs and provincial governors contingent on the "advice" of the Prime Minister. Another amendment prohibited elected members from "floor crossing" or voting against party positions. The Sharif government also engaged in a protracted dispute with the judiciary, culminating in the storming of the Supreme Court by ruling party loyalists and the engineered dismissal of the Chief Justice and the resignation of President Leghari in December 1997. The new President elected by Parliament, Rafiq Tarar, was a close associate of the Prime Minister. A one-sided, anti-corruption campaign was used to target opposition politicians and critics of the regime. Similarly, the government moved to restrict press criticism and ordered the arrest and beating of prominent journalists. As domestic criticism of Sharif's administration intensified, Sharif attempted to replace Chief of Army Staff General Pervez Musharraf on October 12, 1999, with a family loyalist, Director General of the Interservice Intelligence Directorate, Lt. Gen. Ziauddin. Although General Musharraf was out of the country at the time, the army moved quickly to depose Sharif. Pervez Musharraf Following the October 12 ouster of the government of Prime Minister Sharif, the military-led government stated its intention to restructure the political and electoral systems. On October 14, 1999, General Musharraf declared a state of emergency and issued the Provisional Constitutional Order (PCO), which suspended the federal and provincial Parliaments, held the Constitution in abeyance, and designated Musharraf as Chief Executive. Musharraf appointed an eight-member National Security Council to function as Pakistan's supreme governing body, with mixed military/civilian appointees; a civilian Cabinet; and a National Reconstruction Bureau to formulate structural reforms. On May 12, 2000, Pakistan's Supreme Court unanimously validated the October 1999 coup and granted Musharraf executive and legislative authority for 3 years from the coup date. On June 20, 2001, Musharraf named himself as president and was sworn in. After the World Trade Center and the Pentagon were attacked on September 11, 2001, Musharraf pledged complete cooperation with the United States in the war on terror, which included locating and shutting down terrorist training camps within Pakistan's borders, cracking down on extremist groups and withdrawing support for the Taliban regime in Afghanistan. In a referendum held on April 30, 2002, Musharraf's presidency was extended by five more years. The handover from military to civilian rule came with parliamentary elections in November 2002, and the appointment of a civilian prime minister, Mir Zafarullah Khan Jamali. Having previously promised to give up his army post and become a civilian president, General Musharraf announced in late 2004 that he would retain his military role. In August 2004, Shaukat Aziz was sworn in as prime minister, having won a parliamentary vote of confidence, 191 of 342 votes, in which the opposition abstained. On October 8, 2005 a magnitude 7.6 earthquake struck Pakistan, India, and Afghanistan. The epicenter of the earthquake was near Muzaffarabad, the capital of Pakistani-administered Kashmir, and approximately 60 miles north-northeast of Islamabad. An estimated 75,000 people were killed and 2.5 million people were left homeless. The disaster of such a huge magnitude galvanized an international rescue and reconstruction effort in support of the affected region. The earthquake cost Pakistan $1.1 billion on resettling those affected.

People of Pakistan

The majority of Pakistan's population lives in the Indus River valley and in an arc formed by the cities of Faisalabad, Lahore, Rawalpindi/Islamabad, and Peshawar. Although Urdu is an official language of Pakistan, it is spoken as a first language by only 8% of the population; 48% speak Punjabi, 12% Sindhi, 10% Saraiki, 8% Pushtu, 3% Baloch, and 3% other. Urdu, Punjabi, Pushtu, and Baloch are Indo-European languages. English is the other official language, and is widely used in government, commerce, the officer ranks of the military, and in many institutions of higher learning. Nationality: Noun and adjective--Pakistan(i). Population (July 2008 est.): 167,762,040. Annual growth rate (2008 est.): 1.81%. Ethnic groups: Punjabi, Sindhi, Pushtun, Baloch, Muhajir (i.e., Urdu-speaking immigrants from India and their descendants), Saraiki, and Hazara. Religions: Muslim 97%; small minorities of Christians, Hindus, and others. Languages: Urdu (national and official), English, Punjabi, Sindhi, Pushtu, Baloch, Hindko, Brahui, Saraiki (Punjabi variant). Education: Literacy (2005 est.)--49.9%; male 63%; female 36%. Health: Infant mortality rate (2008 est.)--66.95/1,000. Life expectancy (2008 est.)--men 63.07 yrs., women 65.24 yrs. Work force (2004 est.): Agriculture--42%; services--38%; industry--20%.