Pakistan's economy

Stopping the rot

Jun 12th 2008 | LAHORE
From The Economist print edition

Just like the bad old days

BRIGHTLY painted Tata lorries, laden with sacks of onions, wait in the noon heat at the Wagah border post between India and Pakistan. Once past customs, the onions will go on to Lahore and beyond. But the lorries must turn back. Their produce is laboriously loaded onto smaller vans, driven by locals.

Pakistan's costly imports of food ($3.5 billion in the first ten months of this fiscal year, which ends on June 30th), fertiliser ($823m) and fuel (over $8.6 billion) may pull the economic rug from under its newly installed government, which presented its first budget, belatedly, on June 11th. The State Bank of Pakistan (SBP), the central bank, reckons the country's current-account deficit might reach 7.8% of GDP this fiscal year, its highest ever (see chart). Growth has slowed to 5.8%, inflation has quickened to over 19% and the government's budget deficit, at about 7% of GDP, is the highest in ten years.

Such macroeconomic disarray will be familiar to the coalition government led by the Pakistan People's Party of Asif Zardari, and to Nawaz Sharif, whose party provides it “outside support”. Before Mr Sharif was ousted in 1999, the two parties had presided over a decade of corruption and mismanagement. But since then, as the IMF remarked in a report in January, there has been a transformation. Pakistan attracted over $5 billion in foreign direct investment in the 2006-07 fiscal year, ten times the figure of 2000-01. The government's debt fell from 68% of GDP in 2003-04 to less than 55% in 2006-07, and its foreign-exchange reserves reached $16.4 billion as recently as in October.

But in the months since, the turnaround economy has threatened to turn full circle. The political turmoil that followed President Pervez Musharraf's imposition of a state of emergency in November and Benazir Bhutto's assassination in December is not wholly to blame. Pricey fertiliser and April hailstorms hurt the wheat harvest. The mealy bug and other afflictions cost about 16% of the cotton crop, which in turn hurt the textile industry. And over 27% of Pakistan's higher import bill was due to the spike in oil prices alone.

But all this made it a bad moment for Pakistan to spook foreign investors with its wobbly politics. They bought just $97m-worth of shares in the first ten months of this fiscal year, compared with over $1.5 billion in the same period a year earlier. Reluctant to test the foreigners' appetite for its securities, the government has turned to the charity of multilateral lenders and friendly governments. Pakistan also received over $5.3 billion in remittances from migrant workers in the ten months to April, half of it from the Gulf.

Mr Zardari has recently returned from a pilgrimage-cum-begging mission in Saudi Arabia. The Kingdom reportedly agreed to defer charges on some of the 250,000 barrels of oil it sells Pakistan each year. This forbearance comes on top of a $300m handout to the government.

What will his government do with this money? Its new budget aims to narrow its fiscal deficit to 4.7% of GDP, based on an optimistic forecast of revenues. It will raise sales taxes across the board and impose heavy duties on luxury items such as perfume and chocolate. It has resolved to “prune” the “unbearable” subsidies, mostly of fuel and electricity, which now consume one-fifth of its budget, promising instead to give poor households 1,000 rupees ($15) a month in cash. The scheme will be named the “Benazir programme”, lest the beneficiaries forget which party to thank. The budget's allocation to the army was less in real terms than it was last year. But even as it spends less on guns, it promises to spend more on soldiers, raising their pay by 20% along with that of every other federal employee. Other expenses on the bureaucracy, however, are to be frozen: civil servants will have to forgo their new cars and air-conditioners.

As the finance minister unveiled his plans, Pakistan's lawyers began their “long march” to Islamabad, demanding Mr Musharraf's removal and the reinstatement of the senior judges he sacked last year. On June 7th Mr Musharraf told the press that he was not about to leave his post or the country. He will know when to quit, he said. He will not sit around like a useless vegetable, or like the onions waiting to cross the border at Wagah.

The war on terror

Friendless fire

Jun 12th 2008 | LAHORE
From The Economist print edition

An alliance under strain

MANY Americans fondly believe it is only diplomatic tact that restrains them from surgical strikes against their enemies in Pakistan to prosecute the “war on terror”. But on the night of June 10th, the bloody complications of such forays became starkly apparent. American-led NATO forces, based in Afghanistan, mistakenly killed at least 11 Pakistani paramilitaries in an airstrike across the border.

The killings took place in the Mohmand area of Pakistan, a no-man's-land, where one country bleeds into the other. It is in a part of Pakistan called the Federally Administered Tribal Areas—a name that is more of an aspiration than a description. The Pakistani army has withdrawn from large parts of the area, leaving lonely border posts manned by paramilitaries called the Frontier Corps.

The trouble started when the Afghan National Army tried to set up a border post in Mohmand. They were dissuaded by the Mohmand Rifles, a detachment of the Frontier Corps. As the Afghan forces retreated, they came under attack from the Taliban. The NATO airstrikes they called in failed to distinguish between the Taliban and the Mohmand Rifles, who wear the same garb, a salwar kameez, as their militant rivals. The final death toll is not yet known. A number of riflemen are missing.

The Frontier Corps and the Taliban share more than a dress code. They belong to the same Pushtun ethnic group, which populates both sides of the border, and their distaste for the Americans differs only in degree, not kind. The killing of their comrades will sow further disaffection. It was not the first time American-led NATO forces have fired missiles across the border, but it was the first time so many Pakistanis had been killed.

The Americans were quick to defend the strike as a legitimate act of self-defence. They have released a video to bolster their case. But Pakistan's prime minister denounced the attack as an affront to the country's “sovereignty, dignity and self-respect”. It “hit at the very basis of co-operation and sacrifice with which Pakistani soldiers are supporting the coalition in the war against terror”, a military spokesman said, denouncing the act as “absolutely unprovoked and cowardly”.

Co-operation is anyway not what it was. Since President Pervez Musharraf was sidelined by Pakistan's February elections, the Americans do not know whom to call on to help orchestrate their fight in these nettlesome border regions. The Pakistani army, which always had mixed feelings about pummelling their erstwhile Taliban allies, has been only too happy for the civilian politicians in the new government to carry the can for the war on terror. But that government, an unsteady coalition, is itself unsure of how to proceed. It must square the demands of Pakistan's regional governments, the army, the Americans and its own voters.

In the borderlands, a rough-and-ready pragmatism reigns. The Frontier Corps will strike local truces with the Taliban, which may or may not leave the militants free to attack other targets. Unsurprisingly, the corpsmen are more interested in staying alive than prosecuting America's war aims. Sadly for the men of the Mohmand Rifles, such on-the-ground diplomacy offers little protection from the air.

Copyright © The Economist Newspaper Limited 2008. All rights reserved.

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Marwatone.

Pakistan

More to worry about than Musharraf

Aug 7th 2008 | ISLAMABAD
From The Economist print edition

Amid growing insecurity and economic crisis, Pakistan’s government decides to impeach the president

PAKISTAN is sliding. Taliban commanders are taking over more of the country’s ungoverned north-west by the day. From there they launch attacks into Afghanistan, killing NATO soldiers and countless Afghans. America, hitherto a remarkably forgiving ally, appears to think Pakistan’s Inter-Services Intelligence (ISI) is assisting them. India certainly thinks so. Tensions between South Asia’s nuclear-armed rivals are rising. After a suicide-bomb attack on the Indian embassy in Kabul last month—which India blamed on the ISI—its national security adviser, M.K. Narayanan, warned that India might have to “retaliate in kind”.

The economy is hell-bound. Inflation is running at 25% a year. The stockmarket in Karachi has lost 35% of its value since April. During blackouts, Pakistani businessmen trade tales of capital flight. Foreign-exchange reserves—once emblematic of economic recovery—now barely cover three months of imports.

The government, a coalition led by the Pakistan People Party (PPP), has been paralysed since its formation in February. It has no plan for the north-west and appears to have given little thought to arresting the economy’s decline.

Indeed, the government does not even have a permanent finance minister. He and half his colleagues were withdrawn from the cabinet in May by the PPP’s biggest coalition partner, Nawaz Sharif’s Pakistan Muslim League (N). It was protesting against the government’s failure to reinstate 60 judges, who were sacked by Pervez Musharraf last November lest they object to his (apparently illegal) re-election as president. Mr Sharif trusts that, if reinstated, these judges would force Mr Musharraf to quit. For good measure, he has also demanded that parliament impeach the president. And he may have his way. After showdown talks on August 6th and 7th Mr Sharif and the PPP’s leader, Asif Zardari, reached a provisional agreement to impeach the president and restore the judges.

Both moves would be popular. Having ruled Pakistan more or less outright for almost a decade, Mr Musharraf is blamed for many of its troubles. According to a poll for the International Republican Institute, an American NGO, 83% of Pakistanis want him out and the judges reinstated. Mr Sharif’s principled stand on these issues—for so it is considered, despite the disregard he showed for the rule of law during his own two riotous spells in power—has boosted his ratings. He has also benefited from the absence of Benazir Bhutto, Mr Zardari’s charismatic wife, who was murdered in December. This left Mr Sharif, a champion of Punjab, Pakistan’s most populous state, as the country’s closest approximation to a national leader. The poll found that 82% of Pakistanis liked him—compared with 36% in 2006, when Mr Sharif was less popular than Ms Bhutto and Mr Musharraf.

Support for the PPP-led government, which came to power amid euphoria, has dived. Its few efforts at policymaking—including a doomed effort to put the army-run ISI into civilian hands— have mostly been hapless. Under Mr Zardari, the PPP seems rudderless and divided; a third of its elected members are said to be ready to rebel. Many Pakistanis considered his refusal to meet Mr Sharif’s demands about the judges and President Musharraf as feckless. Having now apparently agreed to them, Mr Zardari might seem to have handed another victory to Mr Sharif.

It may not be so. Mr Zardari is no friend of Mr Musharraf or the army: he has accused the ISI of killing his wife. But he is wary of Mr Sharif’s demands, for two reasons. First, he fears the restored judges would make trouble for him. For example, they might review an amnesty from corruption charges that Mr Musharraf gave to Mr Zardari and Ms Bhutto last year. In addition, Mr Zardari rightly considers that ousting Mr Musharraf would primarily help the PPP’s historic and, no doubt, future rival, PML(N). In particular, the president’s political allies in the Pakistan Muslim League (Q) party, would then be expected to rejoin Mr Sharif’s party—whence Mr Musharraf plucked them, after he toppled Mr Sharif in a 1999 coup.

This may have tempted Mr Zardari to consider another strategy: let Mr Musharraf stay put; let the PML(N) quit the government; and let the president’s men, of the PML(Q), join it instead. But this would make Mr Zardari even more unpopular. Mr Sharif would hope to benefit; but little good might this do him. He is currently barred from standing for election, having been convicted of crimes—including hijacking—in the aftermath of Mr Musharraf’s coup. By acquiring some friendly judges, Mr Sharif may hope to overturn this ban. He will certainly not escape it if Mr Zardari sides with Mr Musharraf.

In short, Mr Sharif, like Mr Zardari, is reluctant to bring an end to an alliance for which he has no love. Indeed, in this week’s negotiations, he made an important concession: he agreed to impeach Mr Musharraf before restoring the judges. A successful impeachment would require constitutional change, and therefore support from two-thirds of parliament. It is unclear that the government has this.

Reports of Mr Musharraf’s impending exit—encouraged by the sporty president’s decision to delay his departure to the Beijing Olympics on August 6th—may therefore be exaggerated. On the other hand, whether Mr Musharraf goes or not, it is certain that the government will continue wrangling. And at a time of national crises, this is an appalling prospect.

At least, as its budget deficit rises above 7%, Pakistan will have aid. On July 29th the US Senate’s Foreign Relations Committee voted to triple America’s non-military assistance, to $1.5 billion a year. Saudi Arabia is expected to defer payment on a $5.9 billion oil bill. But aid is not enough. After 18 months of political turmoil and worsening terrorism, Pakistan needs stability to restore the confidence of foreign investors. This will take a while.

From the Pushtun north-west, the news just gets worse. An unloved truce between the government and several Taliban commanders, including the most powerful, Baitullah Mehsud, has mostly broken down. In Swat, 250km (155 miles) from Islamabad, where a mini-jihad erupted last year, 150 people are reported to have been killed in a week’s fighting between soldiers and militants. On August 5th a spokesmen for Mr Mehsud threatened to bring the jihad to Karachi, Pakistan’s biggest city and home to many poor Pushtuns.

The army operates more or less freely on the frontier but is reluctant to touch Mr Mehsud. With a forbidding fief in the never-conquered tribal area of South Waziristan, a well-armed militia and suicide-bombers at his disposal, he is a daunting foe. He also holds about 100 soldiers and civil servants hostage. But the army’s diffidence is increasingly being taken as evidence that, despite Mr Musharraf’s protestations to the contrary, Pakistan never abandoned its policy of harbouring terrorists at home and sponsoring them abroad. Afghanistan and India maintain this. America, which is reported to have traced the Indian embassy bombing to the ISI, might be tempted to concur.

It hardly matters. America appears to have no option but to pour cash into Pakistan, and hope some good comes of it. Afghanistan will not be stable while Pakistan is in chaos. Foreign intervention would be unthinkable. America’s Senate has recognised this. No doubt, so has the ISI.

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Marwatone.

Pakistan

Time’s up, Mr Musharraf

Aug 14th 2008 | ISLAMABAD
From The Economist print edition





RETIREMENT beckons for President Pervez Musharraf. On August 11th Pakistan’s ruling coalition, led by the Pakistan People’s Party (PPP), convened parliament in order to impeach the former dictator. By coincidence, it was his 65th birthday.

The PPP and its main ally, the Pakistan Muslim League (N), or PML (N), have drawn up a charge-sheet against Mr Musharraf. It remained under wraps; yet the government’s leaders have accused the two-time army coupster of subverting the constitution. The PPP’s leader, Asif Zardari, has also accused him of misusing American aid given to fight the war on terror. The government has promised to publish its charge-sheet and launch the impeachment within a few days—if Mr Musharraf does not resign first, as it hoped he would.

For further encouragement, Pakistan’s four provincial assemblies resolved to vote on what amounts to a motion of no-confidence in Mr Musharraf. In Punjab, the base of his political ally, the Pakistan Muslim League (Q), or PML (Q), the motion passed by 321 votes to 25. Over half of Mr Musharraf’s friends there, it transpired, were of the fair-weather type. In North-West Frontier Province, Mr Musharraf picked up four votes; 107 went against him. In Sindh, not one legislator voted for the former general. His “allies” there abstained. Baluchistan, a poor and rebellious province, seething with ill-will against Mr Musharraf, was yet to vote.

At least, this encouraged the government. To impeach the president, it needs two-thirds support in a joint vote of Pakistan’s two-tier assembly. It is not entirely clear that it has this. Yet, after the performance of Mr Musharraf’s allies in the provinces, it seemed that the extra votes required could be found. So, Mr Musharraf’s best hope of survival might be to dissolve parliament—as he has empowered his office to do. He has made similar interventions before: for example, last November, when he declared an emergency in order to muscle through his re-election as president. But he had the support of the army then; it is unlikely he would have it now.

His other staunch ally, America, has also backed away. When the leaders of the two main parties, the PPP’s Asif Zardari and the PML (N)’s Nawaz Sharif, declared their intention to impeach the president on August 7th, a spokesman for America’s State Department called it an “internal matter”. Mr Sharif has implied that America has asked him not to press charges against its old ally. Mr Zardari, to whom Mr Musharraf last year gave an amnesty from corruption charges, might live with this. But Mr Sharif, whom Mr Musharraf ousted as prime minister, imprisoned and then exiled, will give no such assurance.

To avoid being pursued by Pakistan’s courts—which he has done much to wreck—Mr Musharraf might consider retiring outside Pakistan. Local rumour-mongers have proposed many possible destinations: Turkey, America, Saudi Arabia, Britain. But as The Economist went to press, Mr Musharraf, the bluff commando, still refused to quit. If his impeachment proceeds as promised, General Ashfaq Kayani, Pakistan’s army chief, may ask him to revisit that thought: the army, it is said, would consider the impeachment of its former supremo to be undignified.

By uniting against a common foe, the PPP and PML (N) have restored an opportunistic friendship of their own. Traditional rivals, they entered into an alliance after routing Mr Musharraf’s supporters in a general election in February. But cracks appeared in May, after the PPP failed to honour a promise to reinstate some 60 judges, sacked by Mr Musharraf during the emergency. In response, Mr Sharif withdrew the PML (N)’s nine ministers from the government, but not its support. As a mark of renewed co-operation, four of these ministers are to return to work. The other five will join them after the judges are restored—as both party leaders say they will be, once Mr Musharraf is gone.

Perhaps this will happen. But, given the parties’ history of mutual back-stabbing, it may not. If Mr Musharraf is removed, the government will in theory have a month to elect a new president. But it would first try to pare back his powers. This would entail constitutional change, requiring two-thirds support in both houses of parliament. The government does not have this; PML (Q) controls the upper house. This raises the prospect of a protracted squabble between the three main parties over how the presidency should be renovated, and who should then occupy it.

Outside Islamabad, twin disasters are unfolding. The economy is in a dire way: inflation is running at 25%, as investors flee. In the north-west, a failing campaign against Taliban insurgents is meanwhile screaming for leadership—which neither the army nor the government seems able to provide. Around 300 people are reported to have been killed there, in tribal feuding and insurgency, in the past week.

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Marwatone.

Sep 4th 2008



The European Union unites in rather mild and belated criticism of Russia’s war in Georgia

DEPENDING where you live in Europe and whom you blame for the Russian-Georgian war, the European Union’s emergency summit meeting on September 1st was a triumph, a failure or just the best that could be expected. Against objections from some Russia-friendly quarters, chiefly Italy’s prime minister, Silvio Berlusconi, the EU condemned Russian actions in Georgia, agreed to step up efforts to help ex-Soviet countries under threat and blocked talks on a new partnership deal.
Even agreeing that was tricky. Britain had been demanding a “root and branch” re-examination of the EU’s relationship with Russia—a critical viewpoint shared with Poland, the Baltic states and Sweden, whose foreign minister, Carl Bildt, has explicitly compared Russia’s tactics with Germany’s in the 1930s. Most of the big European countries are a lot more cautious. They blame Georgia, seen as an irresponsible American protégé, for starting the war but object to Russia’s precipitate diplomatic recognition of Georgia’s two breakaway territories, South Ossetia and Abkhazia, and the lingering Russian military presence in buffer zones. Above all, they are glad that a row with an important trading partner has cooled.
The hope is that France’s president, Nicolas Sarkozy, who is visiting Russia on September 8th, will bring back agreement on a Russian withdrawal in accordance with the ceasefire he brokered. Russia’s president, Dmitry Medvedev, has promised this on at least four occasions. But Russia’s prime minister, Vladimir Putin, has declared that the port of Poti, a long way from the separatist regions, is part of Russia’s self-declared “security zone”. His spokesman, Dmitry Peskov, said that Russian troops (now labelled peacekeepers) would maintain their “temporary presence”. Even so, optimists think that it will soon be business as usual, particularly as Russia starts to count the economic cost of the war, which has sent shares plunging and encouraged capital flight.
Maybe, but what is happening in practice is another story. Even the details of implementing the ceasefire are unclear. One reason is that the document itself is so vague. Veterans of the many ceasefire negotiations during the wars in former Yugoslavia in the 1990s were aghast when they saw the text, which exists in multiple inconsistent versions and lacks the vital specifics of dates and placenames, leaving far too much wiggle room. Russian officials now say that their forces will move back only when Georgia also abides by the agreement as they define it. They are demanding that Western countries observe an arms embargo on Georgia, the “aggressor” party. That leaves plenty of scope for quibbling and delay.
A second problem is the role of the international monitors from the EU and the Organisation for Security and Co-operation in Europe, a Vienna-based international body that supposedly defuses the continent’s conflicts. Will these people be allowed to move freely inside all of what the West regards as Georgia, including South Ossetia and Abkhazia where Russian-backed militias are engaged in purges of the ethnic Georgian population? Russia, at present, says that it is too dangerous to allow this. But if they are allowed in, on what terms will that be? Foreign journalists and diplomats are repeatedly told that they need documents issued by the separatist authorities—or in some cases, as shockingly happened to the French ambassador to Georgia, Russian visas. Georgia and its allies will vigorously resist the application of such rules to international officials.
It is still unclear what Russia really wants in Georgia—or elsewhere. In Moscow, the mood is defiant, unrepentant and uncompromising. Mr Medvedev and a raft of top officials have scoffed at talk of serious punitive action. “Bring it on” appears to be their devil-may-care mantra. Convinced that the days of a unipolar Washington-centric world are dead and buried, Russia believes it has a privileged place at the top table of a fast-changing multipolar world. Any attempt to mete out punishment will backfire. “The G8 will be practically unable to function without Russia,” Mr Medvedev calmly told Italian television. “That’s why we don’t fear being expelled.” On NATO’s freezing of ties with Russia, he remarked: “We don’t see anything dramatic or difficult about suspending our relations…But I think our partners will lose more from that.” Unmentioned but clearly meant was NATO’s reliance on Russia to supply its forces in Afghanistan.
The EU’s mild rebuke and tentative sanctions brought an outright welcome. The freezing of talks on a new deal with the EU, already much delayed, is seen as of little importance. Though junior officials expressed irritation at “biased statements” in the EU declaration, Mr Medvedev hailed the union’s avoidance of real sanctions as “reasonable” and “realistic”. The president seemed to put all disagreement with Russia down to a temporary misunderstanding: it was “not fatal” because “things change in the world.”

Political corpse
But not, it seems, as far as talks with the Georgian leadership is concerned. “President [Mikheil] Saakashvili no longer exists in our eyes,” said Mr Medvedev. “He is a political corpse.” Russia’s foreign minister, Sergei Lavrov, advised Europe to decide its policy towards Russia based on its own “core interests” (ie, without America) in a speech larded with snide remarks about American arrogance and unilateralism. “The phantom of the Great Game wanders again in the Caucasus,” he said. If America and its allies chose to side with what he called “Saakashvili’s regime” it would be a “mistake of truly historic proportions”.
That fits with earlier Russian demands for a change of Georgian leadership. Russia has said that its prosecutors are collecting evidence in South Ossetia with which to indict Mr Saakashvili as a war criminal. Many of Georgia’s Western friends would be delighted if someone with an easier personality (and greater readiness to listen to advice) were in charge. But they want that to happen as part of Georgia’s normal internal politics, not as a putsch dictated by Moscow. As the box on the last page of this section points out, Georgian politicians now think the same.
The double-act between Mr Medvedev and Mr Putin creates extra scope for manoeuvre. Mr Medvedev promises to calm things down. Then Mr Putin stirs them up again, accusing in all seriousness the Bush administration of staging the war to boost John McCain’s election chances.
Part of the motive for the war may have been to distract attention from problems inside Russia, such as inflation, corruption, squabbling inside the circles of power and the failure to distribute fairly the proceeds of the oil and gas bonanza of past years. As the oil price falls towards $100 a barrel, the focus on that will sharpen.
It is hard to avoid the conclusion that the most unpleasant side of Russian politics is leaking to its near neighbours. Over the weekend, Mr Medvedev said that protecting the lives and dignity of Russian citizens abroad was an “unquestionable priority”, as well as protecting the interests of Russian businesses there. He also spoke of “countries with which we share special historical relations” where Russia has “privileged interests”. Though Mr Medvedev stressed the need for friendly relations, he also implied that such countries might not have the option of following policies that Russia deemed unfriendly (such as wanting to join NATO or host American bases). It would have been hard to find anything more likely to make the fears of Russia’s neighbours seem justified, to stoke Western support for them and to undermine those who think that Russia will soon return to “normal”.
Diplomatic support for Russia has been scanty, even among close allies. No country, Russia apart, has given the two statelets formal diplomatic recognition. Belarus and Tajikistan say they will do so, but the former, which is being squeezed by Russia over energy supplies, spoke in notably lukewarm terms and only after Russia’s ambassador to Minsk decried the government’s “incomprehensible silence”.
Perhaps most significant has been the critical reaction from the intergovernmental Shanghai Co-operation Organisation, which Russia has been building up as a counterweight to American influence. A statement from its meeting last week supported Russian peacekeeping efforts but stressed the importance of territorial integrity and the peaceful resolution of conflicts. This was a clear snub that showed a startling lack of support for Russia’s actions both from the four Central Asian members of the SCO and from China.

Chill from China
China’s leaders have enjoyed unnerving America by flirting with Russia, but this has always stopped well short of any hint of confrontation. Although China’s state-run media has avoided criticising Russia, and has highlighted the West’s discomfort at Georgia’s defeat, China’s official position on Russia’s recognition of the breakaway regions has been surprisingly chilly. A Chinese spokesman said his country was “concerned” and called for “dialogue and consultation”. That reflects both China’s pragmatic desire for good economic relations with the West, and also its dislike of both separatism and interference in other countries’ internal affairs. With Tibet, Taiwan and restive Muslims to contend with, China takes a dim view of anybody chopping up other countries and declaring the results to be independent states.
The same thinking has marred Russia’s image in normally friendly countries such as Greece and Cyprus (which bristles about the Turkish-backed “pseudo-state”) and Spain (which is twitchy about Basque and Catalan separatism). All this suggests a degree of miscalculation in Moscow. Over the past decade, the future of South Ossetia and Abkhazia was a useful bargaining chip. Now it has been cashed in, without much benefit.
Cooking up new Russia policies will take time. The result may well not be to the Kremlin’s taste. “We are back to square one,” says Alexander Stubb, Finland’s foreign minister. Many Western countries are now reassessing their relations with Russia in ways that range from the need for higher defence spending to a reduction in dependence on Russian energy. Mr Sarkozy says that France, which holds the EU presidency, will launch a big new defence initiative in October.
The EU is better at giving carrots than wielding sticks. It will find it easier to provide generous support for the reconstruction of Georgia than do anything that might be seen as punishing Russia. Even so, timid as this response may seem, it is also something of a watershed: for the first time the EU’s 27 countries got together and agreed on sharp public criticism of Russia.


The United States has announced a $1 billion aid package for Georgia. The International Monetary Fund has agreed to lend the country $750m. Underlining Georgia’s importance as an energy corridor, America’s vice-president, Dick Cheney, visited the region this week. He hopes to get Azerbaijan to commit gas exports to the €8 billion ($11.5 billion) Nabucco project, which extends a gas pipeline to Europe from Georgia and Turkey. But Nabucco’s chances are looking increasingly slim. This week Russia stepped up its energy diplomacy, agreeing on a deal with Turkmenistan and Uzbekistan on a new pipeline via Russia that would entrench the Kremlin’s hold on east-west gas supplies. Though the EU is Russia’s largest customer, individual countries’ dependency (see chart) has undermined the union’s collective bargaining power.
America is also supporting Georgia’s demand for a tough non-recognition policy towards South Ossetian and Abkhaz independence. Companies doing business in the two self-proclaimed countries will find that their managers and shareholders cannot get American or European visas, officials say. But will big European countries such as Germany go along with that? Outsiders will be scrutinising closely the atmosphere at the annual German-Russian intergovernmental meeting in October—an occasion normally marked by warm rhetoric about the two countries’ mutual interdependence.
The mood in NATO is noticeably more hawkish than in the EU. A senior official says that the days when it was regarded as “taboo” to discuss any military threat from Russia in the alliance’s contingency planning are all but over. When NATO defence ministers meet in London on September 18th, a big question will be how to defend existing members, chiefly the Baltic states, which are small, weak and on Russia’s border. Estonia, Latvia and Lithuania joined the alliance in 2004, when such questions were dismissed as too theoretical to worry about (or alternatively too provocative to consider). Now they are unavoidable.

Minorities as ammunition


The potential flashpoint, as with the war in Georgia, is a legacy of the Soviet Union (see table). Russia says that the language and citizenship laws in Estonia and Latvia discriminate against Russian-speakers. The hundreds of thousands of people (mainly from Russia) who moved to these countries during the Soviet occupation did not automatically become citizens when Estonia and Latvia regained independence. Many were naturalised in the 1990s, and a steady trickle continue to pass the language exams and apply for citizenship. But an alienated minority of stateless people, and tens of thousands who carry Russian passports, are a potential nightmare for the Baltic states and their friends. Disturbances in the Estonian capital, Tallinn, last year over a clumsy government decision to move a Soviet war memorial inflamed feelings that have not yet subsided.
Lithuania’s problems are different (it has a small Russian minority which gained automatic citizenship in 1991). But it is a transit route for Russian troops to the exclave of Kaliningrad. That offers plenty of scope for provocation. Russia has cut off oil supplies, ostensibly because the pipeline is decrepit (but has refused a Lithuanian offer to pay for its repair). And populist parties led by politicians with strong Kremlin links are doing well in the run-up to a general election in October.
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The Baltic armed forces are tiny and are configured to support NATO efforts in faraway countries such as Afghanistan, not to defend the region against a real attack from Russia. NATO’s military presence consists only of a handful of fighter aircraft (currently four from Germany) based at an air base in Lithuania. It also has a cyber-defence centre in Estonia, and all three countries have NATO-standard radars that can look deep into Russia.
Beefing that up without feeding Russian paranoia will be tricky. “Don’t expect a fanfare,” says the NATO official. “We will do it in a low-key, professional way.” The Baltic states themselves will be expected to spend more on defence—no easy task as a sharp economic slowdown bites.
Another question for NATO is how much help to offer in restoring Georgia’s armed forces. Although Western military advisers have been surprised, and even scandalised, by the poor showing of the Georgian army, which retreated in poor order, dumping huge quantities of donated American equipment and ammunition, Georgia itself is optimistic about rebuilding it.
The other country most threatened by Russia is Ukraine. Mr Putin said in April that it risked dismemberment if it tried to join NATO, and opinion inside the country is deeply divided on the issue. Politics is unstable too: this week Ukraine’s president, Viktor Yushchenko, threatened to call a snap election to defend himself against what he termed a “putsch” by parliament, which wants to strip him of his powers. The West will tread gingerly into that, though NATO may step up its fairly uncontroversial defence training activities.
Yet NATO is barely less divided than the EU. It is not just that European countries blocked the American plan to give Ukraine and Georgia a clear path to potential membership at the alliance’s summit in April. Turkey, the most important NATO member in the Black Sea region, is torn between the competing claims of strategic partnership with America and its strong trading links with Russia (which supplies most of its gas). Although Turkey has helped to train Georgia’s armed forces (evidently not very successfully), it did not share radar and other military data with Georgia during the series of pinprick attacks by Russia that preceded the full-scale war.
Turkey is pushing its own regional initiative, involving Russia and the Caucasus countries but not America. That might help settle another lingering conflict, between Armenia and Azerbaijan. But Georgia regards anything that excludes the United States as unacceptable. For now, the hottest issue for Turkey is whether to allow America to send more warships through the Bosporus straits into the Black Sea, something that Russia vigorously opposes.
Having caught the West napping (or at least on holiday), Russia scored a pleasant victory over a weak and unpopular adversary. But now it has to deal with the consequences: war fever at home plus alienated allies and stronger critics abroad. Will Russia’s leaders respond to this by raising the stakes, in the hope of showing their opponents’ underlying weakness? The West’s leaders worriedly hope not.



Source : Economist

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Regards

Aarwaa

Pakistan is ruled by three As - Army, America and Allah.

Sep 4th 2008 | GORI AND TBILISI



When still under part occupation, it’s wiser not to play at politics
WORKMEN are busy, hammering away at the Gori apartment blocks smashed by Russian rockets, unloading roofing materials from lorries and installing windows. But making good the physical damage is a small part of Georgia’s problems. On the outskirts of town a small tent city has been thrown up by the UN’s refugee agency (UNHCR) and its miserable inhabitants have no idea when, or even if, they are going home.
Two weeks ago Gori was a ghost town, occupied by Russian troops. Then the Russians pulled out and now most of its people have returned. But the Russians have not gone far. They have withdrawn only 4km (2½ miles) up the road to the village of Karaleti where a small base has been built behind earthwork ramparts. About half of Karaleti’s people have come back, says a local, but farther north, in the Russian-controlled zone stretching 23km to the border of Georgia’s breakaway province of South Ossetia, almost the entire population is believed to have fled or been ethnically cleansed.
The UNHCR says that of the 4,200 displaced people in Gori, some 600 come from the destroyed flats. The rest come either from former Georgian-held villages in South Ossetia or from the Russian “security zone”, where paramilitaries and thugs have been looting and burning houses. Some of the refugees say that they have ventured north to check on their houses but did not feel safe enough to stay.
On September 1st hundreds of thousands of Georgians joined together in anti-Russian protests. They formed a human chain in Gori and marched towards Karaleti. A Russian soldier at the checkpoint told Tsisana Tabadtadze, a Georgian refugee from South Ossetia who was haranguing him, that he came from Yaroslavl, 250km north-east of Moscow. “You flattened Chechnya and now you want to do the same to Georgia,” she shrieked. He replied that he would be happy enough to go home.
Russia’s president, Dmitry Medvedev, may have thought that by calling Mikheil Saakashvili “a political corpse” this week he would hasten the Georgian president’s downfall. In fact, his attack has had the opposite effect. “The phobia of being accused of serving Russian interests in this country is pretty strong,” says Tina Khidasheli, a leader of the opposition Republican Party. She agrees that Mr Saakashvili has much to answer for, but says, as do other opposition figures, that “now is not the best time to ask questions.” So, for the moment, she says, there will be no calls for his resignation. But the country is volatile and that could change soon, especially if Georgia faces a tough winter plagued by power cuts and a post-war economic crisis.
Alex Rondeli, a veteran foreign-policy analyst, believes that when the time is right the Russians may well unearth someone more amenable to lead Georgia. “They are going around like snakes,” he says of certain Georgian politicians he will not name. “Their enemy is weakened and a weakened enemy is a good target.” Still, he adds, most Georgian leaders understand that it is not in the country’s interests to discuss replacing Mr Saakashvili right now. After all he says: “We are still under occupation and the war has not ended, except maybe for the Western media.”




Source : Economist

__________________
Regards

Aarwaa

Pakistan is ruled by three As - Army, America and Allah.

Pakistan

Beyond Musharraf

Aug 14th 2008
From The Economist print edition

Pakistan’s government should forget about punishing the president and get on with governing

THE story of Pervez Musharraf’s rise and fall has been a long and rather sad one. A skilful and decent professional soldier, he took power in 1999 amid chaos caused by corrupt and incompetent politicians, came to like the stuff and clung on to it far too long. A good friend to the West in the fight against al-Qaeda, he became a liability as he stalled on the promised return to democracy and his countrymen turned against him. Now the story seems to be nearing its end.

For the government elected in February, which is seeking to impeach Mr Musharraf, this is both a danger and an opportunity. The danger is that, once Mr Musharraf has gone and it has no common hatred to unite its disparate parts, it descends into feuding and paralysis. The opportunity is to transcend its preoccupation with president and to start tackling the two huge problems Pakistan faces: the spread of Islamist militancy and a fast-sinking economy.

First, though, Mr Musharraf should go. He is already much diminished in power since he sloughed off the “second skin” of his army chief’s uniform last year and became a president in mufti. His term finished last year. He claims to be a democrat, and it is clear his people want him out. To bestow a new term on himself he flouted the spirit and possibly the letter of the constitution by getting the outgoing parliament to re-elect him. When the new parliament was elected in February, his supporters were trounced—not just because of sympathy for their opponents after the assassination of Benazir Bhutto, a former prime minister, but also because he is so unpopular.

His chances of hanging on are, anyway, small. He could try to fight impeachment in parliament, by cajoling venal politicians there. He could challenge it in the courts. Worst, he could resort to his presidential powers to declare a state of emergency. That would be, in effect, another coup by a man who took power in one and sustained himself by declaring a state of emergency last November. It is, however, unlikely to happen. Mr Musharraf is no longer army chief, and his successor, though his nominee, has so far shown creditably little inclination to leave the barracks. It is in the interests of both the country and the armed forces that the soldiers should stay there. Previous civilian administrations have been corrupt and inept, but so has the army rule that has routinely supplanted them. For Pakistan to break this vicious circle, it needs an army that renounces coups, come what may.

The politicians also need to avoid repeating past mistakes. The coalition government is led by Bhutto’s widower, Asif Zardari, and Nawaz Sharif, the prime minister Mr Musharraf overthrew in 1999. Understandably, they have focused on getting rid of, and punishing, the president. But they should allow him to leave with as much dignity as he can salvage. Resignation would be humiliation enough. Allegations that he has embezzled huge amounts of American aid need to be investigated. But Messrs Zardari and Sharif need to abjure the backward-looking score-settling and forward-looking nest-lining that have characterised previous Bhutto and Sharif regimes, put aside their mutual loathing and work together to fight extremism and repair the economy.

The Taliban and the economy, stupid

The threat posed by the “Pakistani Taliban”, both in the tribal areas that blur into Afghanistan, and in Pakistan itself, is mounting. Fighting this week alone has claimed some 300 lives. The struggle against the extremists has been unpopular in Pakistan. It is seen as America’s, Afghanistan’s and Mr Musharraf’s war. Politicians have therefore tended to play down its importance. But Pakistanis are not, by and large, religious extremists. Defeating Pakistan’s version of the Taliban is in the interests not just of the West but also of the country’s moderate majority.

The other priority must be the deteriorating economy. Mr Musharraf made much of his governments’ alleged economic competence. But despite the billions of dollars of American aid that have poured into the country, the Asian Development Bank reported last year that its poorest people were worse off than they were a decade earlier, before Mr Musharraf took over. Uniquely in Asia, Pakistan had seen a slight rise in the number of people living on less than the equivalent of a dollar a day. In the past year the sharp increase in food and fuel prices has made their lot even harder. Annual inflation is now running at 25%. Economic hardship is feeding extremism. Pakistan’s politicians have more important things to do than settle old scores.

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Marwatone.

Pakistan

Exit the president

Aug 21st 2008 | LAHORE
From The Economist print edition

The troubled era of Pervez Musharraf comes to an end. New troubles begi

HE HAD stayed too long, as dictators do. He considered himself “indispensable”, even as his powers ebbed and support vanished. But Pervez Musharraf, an army coupster turned army-backed president, made a dignified exit on August 19th. In a cogent hour-long address, televised live and delivered with few notes, Mr Musharraf defended his nine-year rule. He denied the charges that the ruling coalition, led by the Pakistan People’s Party, was about to impeach him with, accusing it of pursuing a “vendetta” against him. As he spoke, taut with emotion, its supporters were dancing in the street.

Mr Musharraf’s demise had been inevitable since August 7th, when the PPP and its main coalition partner, the Pakistan Muslim League (N), or PML(N), said they would impeach him. A charge-sheet had been drafted, and was to be presented to parliament this week. It included Mr Musharraf’s first seizure of power in 1999—at the expense of Nawaz Sharif, the PML(N)’s leader, whom Mr Musharraf imprisoned and exiled—and his second last November, when he declared an emergency as a means to get re-elected president.

The charge-sheet also listed some of Mr Musharraf’s contributions to the “war on terror”. By stomping to America’s fiddle—for example, in marching his army into the north-west tribal areas bordering Afghanistan—Mr Musharraf won $11.8 billion in American aid, most of it military. But many Pakistanis hated him for it. They reasonably blamed his policies for a Taliban insurgency in the north-west and terrorism all over, including a suicide attack on a hospital in the frontier town of Dera Ismail Khan on August 19th that killed 30 people.

The impeachment of its former chief would have embarrassed the army. To ensure it kept its nose out of politics for a change, the government had therefore urged Mr Musharraf to quit. And the army, under its recently appointed chief, General Ashfaq Kayani, did not demur. Nor did America; it called the impeachment an “internal” issue. In the dying days of his supremacy, Mr Musharraf was therefore reduced to haggling over his retirement plan.

He wants to live honourably in Pakistan, in a mansion he is building outside Islamabad. The PPP’s leader, Asif Zardari, the widower of the party’s murdered former leader, Benazir Bhutto, could tolerate this. But Mr Sharif, who was no stickler for the rule of law during his own two riotous terms, says the coupster must be punished. “I have no vendetta,” he explained, seated in his opulent mansion near Lahore, guarded by two stuffed lions. “Though he handcuffed me, humiliated my family, tried to destroy my party, put me in a dungeon in a 500-year-old fort, put me in exile for seven years; that is all gone. I hold nothing against him personally.” For now, Mr Musharraf seems safe from prosecution. But he may yet quit Pakistan for a spell.

The government meanwhile has troubles of its own. Its decision to impeach the president was less a sign of strength than of terminal wrangling between Mr Zardari and Mr Sharif. At the heart of their dispute are 60 judges, sacked by Mr Musharraf during the emergency. Mr Sharif needs friendly judges to overturn a ban on his eligibility to stand for election, and wants them restored. But Mr Zardari, granted an amnesty from corruption charges under Mr Musharraf, reckons the deposed judges would be less friendly than their successors. As Mr Zardari stalled over reinstating the judges, Mr Sharif in May withdrew his nine ministers from the government. It was largely in an effort to woo him back that Mr Zardari agreed to Mr Sharif’s other main demand: to impeach Mr Musharraf.

But Mr Sharif is still not happy. He wants the old judges restored at once. And he wants the president’s power to dismiss parliament—which Mr Musharraf awarded himself—clipped by a constitutional amendment. Mr Zardari is willing to have most of the judges back, but not their irascible leader, Iftikhar Chaudhry. He may also fancy the presidency for himself. If Mr Sharif will not compromise on the judges, Mr Zardari may even take it: the PPP might have enough votes, in an electoral college of the four provincial assemblies and national parliament. In that case, Mr Zardari might be loth to dilute the president’s powers first—though he has sworn to do so.

Mr Musharraf goes at a time of alarming instability in Pakistan. With inflation officially at 24%, and food prices rising faster, the economy is stricken. The violent north-west is screaming for more enlightened and steadier policies than the army has applied. But after nine years of being hounded, divided and abused by Mr Musharraf and his men, the politicians’ erratic performance is not surprising. Above all, Pakistan needs confidence in its democratic system, including its capacity to keep its army in check. Under Mr Musharraf, this was unimaginable.

Not that he recognised it. To the end, he considered himself a promulgator of the “essence of democracy”. Mr Musharraf referred to this concept in his speech while claiming credit for having boosted women’s rights, local governments and other equitable things. And so he did, sometimes successfully. But two tawdry facts remained: Mr Musharraf had never won an unrigged election; and had long been unpopular. He has now been slung out by the first fairly-elected government permitted on his watch. That is democratic.

Copyright © The Economist Newspaper Limited 2008. All rights reserved.

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Marwatone.

Aug 21st 2008
From The Economist print edition

Pervez Musharraf’s exit should be seen as an opportunity for his Western allies, not a setback

HE TOOK a long time going, but at last Pervez Musharraf quit this week as Pakistan’s president. Most Pakistanis seem delighted to see the back of him. But, mirroring the reaction to the coup that brought him to power in 1999—condemned abroad, popular at home—he has been more mourned by his foreign friends.

Western leaders, notably George Bush, saw Mr Musharraf as a loyal ally in the “war on terror”, who had courted domestic unpopularity—and braved repeated assassination attempts—to help America rid the region of the scourge of al-Qaeda and the Taliban. Better his finger on Pakistan’s nuclear button, the thinking went, than a flaky, venal civilian, perhaps followed in short order by a mad mullah.

But the notion that his departure is a victory for the extremists and a setback for their enemies is wrong. The extremists are indeed cheering; but so should Pakistan’s allies. Rather than weakening the forces of moderation, Mr Musharraf’s exit offers the chance to strengthen them.

There are three reasons to doubt the rosy view of Mr Musharraf as a valiant standard-bearer for liberal, secular decency. First, his support for the war against al-Qaeda and the Taliban was neither as freely given nor as unstinting as it is often portrayed. Far from enlisting with gusto, he maintained Pakistan’s traditional support for the Taliban right up until September 11th 2001. Even then, the choice was made for him. Any Pakistani government would have chosen to be “with” America, given what was happening to those who were “against” it.

Since then Pakistan has played a vital role in capturing al-Qaeda leaders, and has spilt more blood fighting pro-Taliban militants in its tribal areas than America and its allies have in Afghanistan, where this week the bloodletting worsened. But it has never dispelled suspicions that it has played a double game. Some of its soldiers and spooks sympathise with and help the Taliban, out of both ethnic-Pushtun fellow-feeling and strategic intent. America itself is reported to have evidence that Pakistan’s intelligence services were involved in the bombing of India’s embassy in Kabul in July.

Second, as an unelected usurper of the presidency, Mr Musharraf saw the mainstream political parties as his chief political rivals. He did his best to weaken them. In the process he encouraged the growth of Islamist parties, some of whose leaders are impeccably moderate, but whose wilder fringes extend into armed extremism. In the election he rigged in 2002, these parties fared better than they ever had before. Mr Musharraf presented himself as the alternative to a political Islam that he himself did much to nurture.

With friends like these

His lack of democratic legitimacy was a third, more fundamental, handicap in the battle with extremism. Just as his support for the war tarnished him in the eyes of the Pakistani public, so, too, the war became tainted by association with an increasingly disliked leader. It was seen as a price Pakistan as a nation was paying for America’s political support for Mr Musharraf personally.

This newspaper has long argued that America was serving neither its own nor Pakistan’s interests by relying so heavily on Mr Musharraf. Its failure to do more to hasten the restoration of democracy has compounded the undoubted difficulties his departure brings. The campaign along the Afghan frontier is so unpopular that the Pakistani government elected in February has done its best to distance itself from the war’s prosecution. But it is led by two moderate parties, representing the mass of Pakistanis, of whom only a tiny fraction has any hankering for a regime of Taliban-style purity and harshness. The government has a chance to make the case for defeating extremism—not because it is beholden to America, but because when Pakistan’s people elected it, they were voting for a moderate, democratic Pakistan. It would be in the generals’ own interests to give it the support it needs, to help repair the army’s image.

Sadly, the dismal record of the two big parties and their leaders in previous governments is not encouraging. But Mr Musharraf was a busted flush, and his successors have at least one ace he never had in his hands: a democratic mandate.

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Marwatone.

Pakistan

Man of the hour

Aug 28th 2008 | LAHORE
From The Economist print edition




THE widower of Benazir Bhutto and inheritor of her Pakistan People’s Party (PPP), Asif Zardari, is on a roll. He is expected to win the indirect presidential election due on September 6th, having been named as the PPP’s candidate this week. For a man accused of massive corruption in his murdered wife’s two governments, on account of which he has spent eight years in prison, where his lawyers said he became depressed and demented, this is quite a turnaround.

The presidency became vacant on August 19th, when Pervez Musharraf, Pakistan’s ruler for almost a decade, resigned to escape impeachment by the PPP-led government. Mr Zardari had agreed to oust Mr Musharraf, a former military dictator and two-time coupster, largely to placate a quarrelsome coalition partner, Nawaz Sharif, the leader of the Pakistan Muslim League (N), or PML (N). But Mr Sharif, who was toppled and imprisoned by Mr Musharraf in 1999, was not satisfied by this: on August 25th he withdrew his party from the government.

This has reduced the ruling coalition, which includes two small regional parties and a smaller Islamist one, to a slender parliamentary majority. But if, as currently looks likely, Mr Zardari is voted president by the electoral college of the four provincial assemblies and two houses of parliament, it will be bolstered.

Mr Zardari would then inherit the swollen powers Mr Musharraf grabbed for the office, allowing him to appoint provincial governors and service chiefs and to dissolve parliament on a whim. He might also inherit Mr Musharraf’s political backers, the Pakistan Muslim League (Q) party. An opportunistic lot, cannibalised by the then-General Musharraf from Mr Sharif’s party, they came a distant third in a general election in February, but would give the government a solid majority.

A famous playboy, Mr Zardari was known in the days of Miss Bhutto’s governments as “Mr 10%”. He was imprisoned, but not convicted, by both Mr Sharif and Mr Musharraf, on charges including murder and corruption. He has been investigated for money-laundering and other crimes in Spain and Switzerland. A British newspaper, the Financial Times, reported this week that Mr Zardari’s lawyers submitted medical records to a British court last year, claiming he was suffering from dementia and severe depression, and so was unable to appear there on corruption charges. That was one of several cases against Mr Zardari that ran into the sands last year when Pakistan’s government withdrew support. At the time, Mr Musharraf was negotiating with Miss Bhutto about a possible alliance. She and Mr Zardari also received an amnesty from corruption charges in Pakistan.

Whatever Mr Zardari’s past reputation, optimists hope that the gathering of power in his hands as president might, just possibly, bring a little more political stability to Pakistan. At the least, it would make the PPP accountable for its handling of the country’s twin crises: a plunging economy and spiralling Taliban insurgency, which on August 21st saw a suicide attack outside a munitions factory in the town of Wah that killed 67 people. Hitherto, the government has seemed too absorbed in bickering between the PPP and PML (N) to give much thought to these problems. Indeed, it has had no permanent finance minister since May, when Mr Sharif withdrew his nine ministers from the government.

His complaint was Mr Zardari’s failure to honour a promise to restore some 60 judges. They were sacked by Mr Musharraf last November, to prevent challenges to his re-election. Mr Sharif needs some grateful judges, to overturn a ban on his own eligibility for election, and made this one of his two main political demands. But Mr Zardari, who fears that one or two of these aggrieved judges, including their leader, Iftikhar Chaudhry, might review his legal amnesty, was reluctant. In private negotiations with Mr Sharif, he therefore offered to restore all the judges except these possible spoilers. But Mr Sharif, who showed little regard for the rule of law during his own two riotous spells in power, refused to compromise.

In a televised address, Mr Zardari implored Mr Sharif to return to the government. But this is unlikely for now. In a society addicted to the notion of “honour”, Mr Sharif’s trenchant stance has made him popular. In opposition he may become even more loved: not least because he will now be free to castigate the army’s counter-insurgency efforts in the north-west, which are as unpopular as they have so far been hapless. Moreover, with such grievous problems to address, and an untested leader in Mr Zardari, the PPP-led government may well fail; this would be a further boost for Mr Sharif.

But Mr Zardari will also have ways to clip his rival’s ambitions. For a start, the PPP might consider leaving the coalition government that Mr Sharif’s party leads in Punjab, Pakistan’s richest province, leaving it in a minority there. In the 1990s, when Mr Sharif and Miss Bhutto alternated in power, such maneuvering, viciously pursued, made Pakistan almost as unstable as it is now. Ultimately, this led to the army’s takeover, as, in Pakistan’s history, political instability always does.

Copyright © The Economist Newspaper Limited 2008. All rights reserved.

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Marwatone.