Video #13 - Pakistan: Economy and Politics
Monday, January 09, 2006BACKGROUND INFORMATION
The Asian Development Bank is set to provide Pakistan with around 2.5 billion dollars for poverty alleviation programs during the next four years. The aid comes as the country's foreign exchange reserves have jumped from $570 million to over $7 billion. This is the first sign of economic improvement since President General Pervez Musharraf took over in a bloodless coup in 1999.
Selig S. Harrison, a writer with the International Herald Tribune, reported in September that the Pentagon had approved $230 million in subsidized military sales to Pakistan and has opened dialogue with Islamabad on its military needs. This aid comes as President Bush's administration is being criticized for supporting President Musharraf's "steady assumption of dictatorial powers." Harrison's article claims that as evidence places Pakistan as the global hub of Al Qaeda operations, Musharraf is raising the price for his cooperation with Washington. Harrison claims that this turn of events is likely to engulf Pakistan in "growing instability in the months ahead that will make it easier for Islamic extremists to operate."
The same article states that the Pakistani armed forces control an industrial, commercial and real estate empire with assets and investments totaling at least $5 billion. As opposition to the armed forces grows, so does anti-American sentiment. Mr. Harrison recommends that "...to safeguard their long-term interest in a stable Pakistan, the United States and other aid donors should continue economic aid to Pakistan only on condition that fair elections are held, accompanied by a clear timetable for a gradual return to civilian rule." Additionally, he recommends that the Bush administration limit military cooperation with Pakistan in such a way that a new war between India and Pakistan is not created "...so as not to endanger relations between India and the United States."
Such advice notwithstanding, United Press International reported on September 26 that President George W. Bush had given assurances to the Pakistani Government to help improve its economy.. During ceremonies accepting the new Pakistani ambassador to Washington, President Bush said that Pakistan is "a vital and stalwart friend and a key partner for the United States." Therefore, President Bush added, "In addition to expanding military and law enforcement efforts, the United States is assisting Pakistan's efforts to provide basic social services to more of its citizens."
Immediately after the September 11 attacks, the United States gave Pakistan $600 million in support funds. This was followed by a debt rescheduling agreement signed last August, valued at $3 billion. Additionally, President Bush said he was working with Congress for an additional $1 billion in debt relief. Additionally, the U.S. Government would provide funding for the Pakistani Government to train teachers, modernize curriculums, and provide healthcare services to the needy.
The official word from Pakistan's Government is optimistic. The Free Trade Agreement (FTA) between Pakistan and Sri Lanka is expected to increase annual trade from US$130 million to US$230 million. The FTA is a binding agreement with implementation planned in three phases over a three year period.
Sri Lanka is interested in exporting tea, rubber and coconut oil to Pakistan. Pakistan already exports yarn to Sri Lanka and is developing a market for engineering goods and chemicals as well. These efforts will increase annual trade between the two nations by $100,000 million a year. Similar agreements are in the works with Bangladesh.
Pakistani President Musharraf, speaking at the annual dinner of the All Pakistan Textile Mills Association held in September, said that the country has stabilized the economy and is on its way to get out of "the debt trap" it had been in. He said the fiscal deficit was down to under 5 percent and the foreign debt had been reduced to $36 billion from $38 billion. President Musharraf indicated that this improvement would allow for possible development projects in his country. He added that the inflation rate was controlled at under 3 percent, and the exchange rate was stable, while revenue collection had been improved to $7.5 billion, and remittances from abroad had also registered a marked increase during this fiscal year.
The future months will tell which of the views plays itself out. Observers say the best scenario would be additional help by the United States for a stable, democratic government in Pakistan, while improving the lives of its people enough to turn the tide of opposition toward the West.
SOURCES
"Asian Development Bank to provide $2.5 billion assistance to Pakistan in next four years." AP Worldstream, August 12, 2002. www.elibrary.com
"Pakistan's Economy Stabilized: Musharraf," Sinhua News Agency, September 25, 2002. www.elibrary.com
"Pakistan Economy to Benefit from Trade Agreement with Sri Lanka." Asia Pulse, August 6, 2002. www.elibrary.com
Harrison, Selig S., "The Bush team is letting Pakistan drift toward chaos;" International Herald Tribune Online, September 23, 2002. www.iht.com
Iqbal, Anwar, "Bush for Boltering Pakistan's Economy." United Press International, September 26, 2002. www.elibrary.com
LESSON PLAN
GRADE LEVEL/SUBJECT: 10-12/Economics, International Relations, World History, Geography, International Baccalaureate Programs(IB), Current Events.
PURPOSE:
To present activities to be used in a variety of classroom situations in order to enhance student understanding of the Asian economy and its significance globally.
OBJECTIVES:
Students will be able to:
- Describe the Pakistani economy.
- Compare and contrast the economy of Pakistan with that of other South Asian nations.
- Evaluate Pakistan's role in the war against terrorism in relation to its economy.
- Predict the effect of the war on terrorism on the political and economic future of Pakistan.
MATERIALS:
- Background information provided.
- Resources on Pakistan available at your school's Media Center and the Public Library System in your area.
- Background information available through Internet "search engines."
ACTIVITIES:
May be assigned as group activities or as individual tasks. They may also be designed as preparation for related presentations either by individuals or groups.
- Use charts and graphs to illustrate facts about the Pakistani economy.
- Compare the information gathered on Pakistan with similar data illustrating the economy of India, Burma, Sri Lanka, Bangladesh, Indonesia and other South Asian economies.
- Hold a panel discussion role playing a member of the Pakistani government, a member of Al Qaeda, a U.S. government official, a Pakistani representative of the business sector, and a spokesperson for the underclass in Pakistan.
- Write an editorial expressing your views on the role of Pakistan in the war against terrorism. Relate this issue to its economy.
EVALUATION:
Individual assignments should be graded by the teacher using established criteria.
Group activities, presentations and projects may be evaluated by teachers and students using the following criteria and scale:
Content Creativity Clarity
1 = Superior (A) 2 = Excellent (B) 3 = Good (C) 4 = Fair (D) 5 = Poor (F)
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