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From stability to growth

Pakistan has gone a long way towards stabilizing the economy under its present government, greatly improving the balance-of-payments situation and increasing revenues from taxation: all policies that make multilateral aid a much more practicable proposition. From this base, the government hopes to put in place strategies that will encourage growth, with rationalization of the banking sector and privatization high on the agenda.

Pakistan's borderlands: the country's leaders
argue it must maintain good relations with the
Taliban regime in Afghanistan

After decades of what Pakistan's finance minister, Shaukat Aziz, terms "stop-go policies" investors and international donor agencies are anxiously waiting to see if the government can make good on its promise to transform reform into stability and growth.

The countdown has begun: general Pervez Musharraf, who seized power from prime minister Nawaz Sharif in a two-hour bloodless coup nearly two years ago, has promised to restore democracy by October of next year. Musharraf says he intends to "ensure continuity" by staying on in his executive role, overseeing events from behind the scenes, presumably on the Turkish model.

Musharraf and his team will have their hands full trying to restore investor confidence in a country that was on the brink of default according to Aziz, with talk of isolation and a total breakdown in expenditure controls and relationships with bilateral and multilateral agencies.

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