|
|
 |
|
Viewing report
|
|
|
|
Pakistan Defence and Security Report Q2 2011
Business Monitor International, April 2011, Pages: 96
Pakistan Defence and Security Report provides industry professionals and strategists, corporate analysts, defence and security associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Pakistan's defence and security industry.
Pakistan remains an unstable ‘hotspot’ with revelations revealed by Wikileaks website in late November 2010 that a number of US diplomatic cables made public have significant concerns about Pakistan’s nuclear programme. Pakistan is said to be producing nuclear weapons at a faster rate than any other country in the world. Further, the north-west of Pakistan is said to be the headquarters for al-Qaeda worldwide. The risk remains that terrorists could access enough nuclear material from out of a nuclear site to eventually make a weapon. The US ambassador to Pakistan, Anne Patterson, also expressed concern that it would be possible for terrorists to build several ‘dirty bombs’ from the existing large and poorly-guarded stockpile of highly enriched uranium at a research facility.
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-motivated violence in Karachi continues. Suspected Taliban suicide attacks killed 18 in Bannu on January 12, 19 in Kohat on January 17 and Taliban gunmen killed one female police officer and four others in Hangu on January 14. At least 17 people were killed in clashes between supporters of MQM and ANP parties in Karachi on January 15. Some 16 people were killed in Lahore and three in Karachi in militant attacks on Shia processions on January 25. The media also reported that eight journalists were murdered in Pakistan in 2010, which was the highest single death toll for any country.
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.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
|
|
|
|
