Problems remain in Pakistan a year after coup

Musharraf's promises to end corruption and economic decline have had mixed results

ISLAMABAD, Pakistan (Reuters) -- Gen. Pervez Musharraf approaches the first anniversary of his seizure of power in Pakistan dogged by a poor image abroad and ingrained skepticism at home.

Musharraf's trip to the U.N. General Assembly last month, when his talk with U.S. President Bill Clinton lasted all of five minutes, seemed to symbolise his domestic and foreign predicament on the eve of the anniversary.

As Atal Behari Vajpayee, prime minister of arch-rival India, began an official visit to Washington, Musharraf was grounded at Kennedy airport while security officers searched his plane following a bomb hoax.

Economists believe Musharraf's military government has done enough to win a resumption of vital International Monetary Fund assistance cut off 18 months ago, but the list of problems facing the 57-year-old career officer is long and formidable.

MESSAGE BOARD India-Pakistan relations

"This is their last chance," a Western economist said of the military leaders. "We've just entered the next century and they really have a chance to do something -- but not much time."

Musharraf seized power on October 12 last year in the culmination of a bizarre tug-of-war in which then prime minister Nawaz Sharif fired him while he was out of the country and subsequently attempted to block the return of his plane.

Although other countries immediately condemned the bloodless coup and still demand a speedy return to civilian rule, Musharraf enjoyed wide popular support at home and diplomats express little sympathy for the discredited Sharif.

Musharraf promised immediately to reverse the economic decline of the 1990s, root out endemic corruption and dismantle political structures that had seen four elected but ineffective governments in a row thrown out during the decade.

Mixed results

The results have been decidedly mixed.

"I think people expected a military government to be more authoritarian and decisive," said Shireen Mazari, head of the government-funded Institute of Strategic Studies. "It was trying to be popular, but a military government could have taken ruthless action."

Musharraf promises to follow a court order and restore civilian rule in 2002, although there is constant speculation on whether the court will give him an extension or the general will turn himself into a civilian ruler to stay on.

His government's most noted accomplishments are on the economy, especially moving to meet terms set by the IMF for a resumption of aid vital to shoring up Pakistan's meagre foreign reserves and dealing with a foreign debt of about $32 billion.

Faced with a chronic budget deficit, Musharraf has refused to retreat despite protests by merchants who will be drawn into the tax net for the first time. In a country of nearly 140 million people, only about 1.2 million pay any income-tax.

Political change is supposed to start this December with the first of six months of local government elections from which parties are banned. The goal is the eventual creation of a new political leadership.

Many suspect the crackdown on corruption has the same intent. Sharif has been sentenced to multiple life sentences for trying to block Musharraf's return and faces more trials on corruption. His predecessor, Benazir Bhutto, also faces corruption charges if she ever comes back to Pakistan.

The government's actions are likely to win a fresh IMF standby arrangement, allowing it to tackle another round of debt rescheduling at year's end, but much deeper reforms are needed.

Pakistan ran a current account deficit of $3.8 billion last year. Foreign exchange reserves are listed at a low $1 billion, but western economists say the amount actually available to the government may be a third of that -- less than enough to cover two weeks' imports.

Meager growth

Only long-term growth will solve such problems, but gross domestic product grew only 2.7 percent last year, the World Bank says. That barely beat the 2.6 percent rise in the still rapidly expanding population.

GDP per capita is only $450, with 85 percent of people living on less than $2 a day. At least 55 percent of those over the age of 15 are illiterate and infant mortality is 91 per 1,000 live births -- more than ten times the rate of wealthy countries.

Pakistan spends only 2.7 percent of GDP on education and less than one percent on health. It spends four percent of GDP on the army, five percent on the civil service and seven percent to service its debt. Politically, power remains in the hands of families ruling with an almost feudal grip.

In a country used to such chaotic political life, few expect sweeping change in the two years left before the general is supposed to restore civilian rule.

"I'm not sure it will be enough time," another western economist said cautiously. "It could just go straight back to the cozy relations and corruption."

It's not a view governments in the West will repeat, at least in public. The low opinion of the ousted prime minister will not alter the demand that the army quickly restore civilian rule.

Musharraf's international problems are compounded by his failure to honour a promise by Sharif to sign the Comprehensive Test Ban Treaty following India and Pakistan's tit-for-tat nuclear tests in May 1998.

The general, who headed the army when Pakistani insurgents launched a major attack in Indian-controlled Kashmir just over a year ago, has also drawn international blame for the continuing conflict there.

Washington has also been annoyed at Pakistan's support for Afghanistan's Taleban movement, which has refused to hand over Osama bin Laden, a Saudi accused of bombing two U.S. embassies in East Africa two years ago.

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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