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Follow on Google News | Market Report, "Pakistan Defence & Security Report Q2 2011", publishedNew Defense research report from Business Monitor International is now available from Fast Market Research
------------------------------------------------------------ Full Report Details at - http://www.fastmr.com/ ------------------------------------------------------------ Pakistan's political leadership is portrayed as inept, weak and corrupt. President Zardari is regarded as spending more time in political manoeuvring than governing, countering the growing insurgency and improving the weak economy. The Federal coalition government looked as if it could lose parliamentary majority after Karachi-based MQM party announced on January 2 2011 that it will join the opposition over 'differences' with the largest party PPP. In July-August 2010, the worst flooding in Pakistan's history devastated the country. Our preliminary damage assessment suggests that Pakistan will struggle to muster any meaningful economic growth in FY10/11. Even after the clean-up operations are complete, we are unlikely to witness a return to the days of plus-5% economic growth (last seen between 2002 and 2007), as the government's poor fiscal state and a protracted internal struggle against extremist elements weigh heavily on private sector demand. The Damage and Needs Assessment (DNA) led jointly by the Asian Development Bank (ADB) and the World Bank (WB) estimates that the total cost of recovery and reconstruction following the floods in July 2010 would be roughly US$8.7bn to US$10.9bn (6.6% of GDP in FY2009/10). The final estimate is inclusive of relief (US$0.9bn), early recovery (US$1.0bn), and medium- to longterm reconstruction (from US$6.8bn to US$8.9bn). With that, two things are certain. Firstly, the amount pledged by international donors so far is minute compared to the estimated total cost of the damages. Secondly, the government of Pakistan, with its consistent budget deficits, does not have the financial capability to fund the gap left by international aid. We note that defence-related spending continues to rise and is over seven times expenditure on health and education in Pakistan. Defence spending is set to rise to PKR442.2bn (US$5.17bn) for the 2010/11 fiscal year beginning on July 1, compared with PKR378.13bn allocated in 2009/10, according to the finance minister Abdul Hafeez Shaikh. It is primarily being spent on security measures and the fight against Islam militants. Politically- Pakistan is at risk of experiencing years of instability and militant activity but an outright collapse of the state is unlikely unless the core province of Punjab becomes ungovernable. On January 4, the Punjab governor Salman Taseer was murdered by his own bodyguard. The bodyguard claimed he acted alone and was motivated by Taseer's support for repealing controversial blasphemy law. More than 50,000 people, led by Islamist parties and militant organisations including Jamaat-ud-Dawa, rallied in favour of the blasphemy law in Karachi on January 9. Almost two months to the day of the high-profile assassination of Punjab Governor Salman Taseer, the federal minister for minorities, Shahbaz Bhatti, was assassinated on March 2. Pamphlets made by the Tehrik-i-Taliban Punjab (Punjabi Taliban), a banned militant group based in Punjab, were found near the scene of the crime, claiming responsibility for the attack. According to the pamphlets, Bhatti was targeted due to his opposition to the country's controversial blasphemy law. Although not our core scenario, such a volatile backdrop means that we cannot rule out a serious challenge to the executive - either constitutional or unconstitutional - in 2011. Under such circumstances, we would not preclude a military coup. Meanwhile, due to its strategic importance, Pakistan's foreign allies will do everything they can to ensure its stability. About Business Monitor International Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at http://www.fastmr.com/ About Fast Market Research Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156. # # # Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available. End
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