Pakistan on edge

The power struggle between Asif Ali Zardari and Nawaz sharif threatens to paralyze the government in Islamabad and distract the army from its fight against Taliban militants operating along the Afghan border. (Pakistani army has always fancied distractions that reduce its Focus from US aided war on Taliban. Earlier, the distraction was a belligerent India and now the distractions are the polticial forces within.)

So then, it was Zardari who started it all by dismissing Shahbaz Sharif's Punjab government (Shahbaz being Nawaz's brother) over convictions dating back to an earlier chapter in Pakistan's political history. Coupled with a mess of reinstatement of (Musharraf Sacked) chief justice of Pakistan, Iftikhar Muhammed Chaudhury, which has piqued lawyers and judicial authorities and a no show at being able to keep Taliban at bay, Zaradari's inconsistency and inability has been attacked by Nawaz Sharif. Not only has he violated the state imposed house arrest, he also has a few brownies from the Long march to Islamabad. Ceeding to pressures all around him Asif Zaradari has now thrown the towel in.Iftikhar Chowdhury restoration to the chief justice position has re-instated Nawaz Sharif's stature as a viable alternative to Asif Ali Zardari. This also has de-escalated a political flashpoint that was looming large on Islamabad.

With no control of Army and Intelligence, Asif Ali Zardarai seems to have now lost the high moral grounds of presidency after he had to reinstate Iftikhar Chowdhury. The public sentiment for him is worse than that of Musharraf in his time. The US is clearly according the army chief Gen Ashfaq Kiyani more importance than Zaradri and his PM, Gilani.

For everything after all, it seems that Asif Ali Zardari's step down time is near.

Why wont Pakistan make it as a nation (PartII)

An interesting article on Business Week about the state of Pakistan. This further extends my initial blog on Pakistan http://www.businessweek.com/globalbiz/content/oct2008/gb20081020_947596.htm#readerComments

Pakistan's Economic Crisis

•Even though Pakistan's financial crisis isn't directly linked to Wall Street's credit crunch or to subprime mortgages, the country's leaders seem confident that Pakistan will get its own bailout. President Asif Ali Zardari has spent the last month mending fences with India and playing nice with Washington. Zardari is now in China, where he will ask for a soft loan of as much as $1.5 billion. Why is he so confident Pakistan will get the money, when only recently Iceland had to go begging to Russia? Here are the reasons.

War on Terror

Effective or not, Pakistan is the U.S.'s closest ally in the war on terror. Since 2001, the U.S. has given Pakistan nearly $10 billion in military aid and has taken a keen interest in maintaining some semblance of stability in Islamabad. Even if the U.S. is not in a position to hand over cash right away, it wields influence with Pakistan's creditors and over such common allies as Saudi Arabia

Nuclear Weapons Power

As long as Pakistan possesses nuclear weapons, it is unlikely that foreign governments will allow serious political or economic upheavals that could undermine control of those weapons. There's little danger of Pakistan selling weapons technology for foreign exchange (though this has happened in the past), but a weak central government is worrisome.

Foreign Investors

The Karachi Stock Exchange is barely functional, with onerous limits and artificial price props. But for most of the first half of 2008, it was one of the world's few moderately sized markets that seemed immune from the subprime taint. Foreign investors rushed in, pushing the KSE up nearly 40% by midyear. Now they must wait alongside Karachi's irate small investors to extract their money.

The Friends of Pakistan

Later this month, Pakistan will hold a donor meeting in Abu Dhabi with an informal group called the Friends of Pakistan. There, President Zardari hopes Saudi Arabia will help deal with his country's oil import needs while other nations assist with its debts

China's Friendship
This week, Pakistan has a new friend—China, which Zardari is visiting for four days. With nearly $1.9 trillion in foreign exchange and a decade-long policy of supporting Pakistan as a counterweight to India, China might just prove itself to be the all-weather friend Zardari keeps calling it.

Pakistan on the Brink

Last week, Pakistan's credit rating slipped to second worst in the world, just a step above that of Seychelles. With less than a month and a half of foreign exchange reserves and no more than 10 days of oil supplies at hand (down from 21 days earlier this year), Pakistan truly stands at the brink of bankruptcy.

Foreign lenders

If Pakistan opts to default, creditors stand to lose huge sums at a time when lending markets are already in cardiac arrest.