U.S. Department of State
Background Notes:  Pakistan, November 1997
Released by the Bureau of South Asian Affairs


Official Name: Islamic Republic of Pakistan

PROFILE

Geography

Area: 803,943 sq. km. (310,527 sq. mi.); about twice the size of 
California. 
Cities: Capital -- Islamabad and adjacent Rawalpindi comprise a national 
capital area with a combined population of 3.7 million. Other cities -- 
Karachi (10 million), Lahore (5.7 million), Faisalabad (6.5 million).

People

Nationality: Noun and adjective -- Pakistan(i). 
Population (1997 est.): 135 million. 
Annual growth rate (1997): 2.8%. 
Ethnic groups: Punjabi, Sindhi, Pathan, Baloch, Muhajir (i.e., Urdu-
speaking immigrants from India and their descendants). 
Religions: Muslim 97%; small minorities of Christians, Hindus, and 
others. 
Languages: Urdu (national and official), English (official), Punjabi, 
Sindhi, Pushtu, Baloch. 
Education: Literacy -- 39%. 
Health: Infant mortality rate (1996) -- 100/1,000. Life expectancy 
(1996) -- men 63 yrs, women 62 yrs. 
Work force: Agriculture -- 48%. Services -- 39%. Industry -- 13%.

Government

Type: Parliamentary in a federal setting.
Independence: August 14, 1947. 
Branches: Executive -- President with constitutional authority, prime 
minister, cabinet. Legislative -- National Assembly and Senate and 
provincial assemblies. Judicial -- Supreme Court, provincial high 
courts, Federal Islamic Court. 
Political parties: the Pakistan Muslim League (PML) and the Pakistan 
People's Party (PPP) are the most important on the national level. Other 
parties include the Jamaat-i-Islami (JI), the Muttahida Qaumi Movement 
(MQM), the Awami National Party (ANP), and the Pakistan Muslim 
League/Junejo group (PML/J).
Suffrage: universal at 21. Religious minorities vote for reserved seats. 
Political subdivisions: Each of the four provinces--Punjab, Sindh, 
Northwest Frontier, and Balochistan--has a parliamentary system; 
northern areas and federally administered tribal areas (FATA) are 
administered by the federal government, but enjoy considerable autonomy.

Economy

GDP (1996-97): $57 billion.
Real annual growth rate 1996-97: 3%. 
Per capita GDP (1996-97): $470. 
Natural resources: Arable land, natural gas, limited petroleum, 
substantial hydropower potential, coal, iron ore. 
Agriculture: Products -- wheat, cotton, rice, sugarcane, tobacco. 
Industry: Types -- textiles, fertilizer, steel products, chemicals, food 
processing, oil and gas products, cement. 
Trade (FY 1996-97): Exports -- $8.3 billion: raw cotton, rice, cotton 
yarn, textiles, fruits, vegetables. Major partners -- U.S., Japan, U.K., 
Saudi Arabia, Germany. Imports -- $11.9 billion: wheat, crude oil, 
cooking oil, fertilizers, machinery. Major partners -- U.S., Japan, 
Saudi Arabia, Malaysia, U.K., Sri Lanka.

People

The majority of Pakistan's population lives along the Indus River valley 
and along an arc formed by the cities of Faisalabad, Lahore, 
Rawalpindi/Islamabad, and Peshawar.

Although the official language of Pakistan is Urdu, it is spoken as a 
first language by only 9% of the population; 65% speak Punjabi, 11% 
Sindhi, and 24% speak other languages (Pushtu, Saraiki, Baloch, Brahui). 
Urdu, Punjabi, Pushtu, and Baloch are Indo-European languages; Brahui is 
believed to have Dravidian (pre-Indo-European) origins. English is 
widely used within the government, the officer ranks of the military, 
and in many institutions of higher learning.

History

Archeological explorations have revealed impressive ruins of a 4,500-
year old urban civilization in Pakistan's Indus River valley. The reason 
for the total collapse of this highly developed culture is unknown. A 
major theory is that it was crushed by successive invasions (circa 2000 
B.C. and 1400 B.C.) of Aryans, Indo-European warrior tribes from the 
Caucasus region in what is now Russia. The Aryans were followed in 500 
B.C. by Persians and, in 326 B.C., by Alexander the Great.

The "Gandhara culture" flourished in much of present-day Pakistan. The 
Indo-Greek descendants of Alexander the Great saw the most creative 
period of the Gandhara (Buddhist) culture. For 200 years after the 
Kushan Dynasty was established in A.D. 50, Taxila (near Islamabad) 
became a renowned center of learning, philosophy, and art.

Pakistan's Islamic history began with the arrival of Muslim traders in 
the 8th century. During the 16th and 17th centuries, the Moguls 
dominated most of South Asia with an empire marked both by 
administrative effectiveness and cultural refinement.

British traders arrived in South Asia in 1601, but the British Empire 
did not consolidate control of the region until the latter half of the 
18th century. After 1850, the British or those influenced by them 
governed virtually the entire subcontinent.

In the early 20th century, South Asian leaders began to agitate for a 
greater degree of autonomy. Growing concern about Hindu domination of 
the Indian National Congress Party, the movement's foremost 
organization, led Muslim leaders to form the all-India Muslim League in 
1906. In 1913, the League formally adopted the same objective as the 
Congress--self-government for India within the British Empire--but 
Congress and the League were unable to agree on a formula that would 
ensure the protection of Muslim religious, economic, and political 
rights.

Pakistan and Partition

The idea of a separate Muslim state emerged in the 1930s. On March 23, 
1940, Muhammad Ali Jinnah, leader of the Muslim League, formally 
endorsed the "Lahore Resolution," calling for the creation of an 
independent state in regions where Muslims constituted a majority.

At the end of World War II, the United Kingdom moved with increasing 
urgency to grant India independence. However, the Congress Party and the 
Muslim League could not agree on the terms for a constitution or 
establishing an interim government. In June 1947, the British Government 
declared that it would bestow full dominion status upon two successor 
states--India and Pakistan. Under this arrangement, the various princely 
states could freely join either India or Pakistan. Consequently, a 
bifurcated Muslim nation separated by more than 1,600 kilometers (1,000 
mi.) of Indian territory emerged when Pakistan became a self-governing 
dominion within the Commonwealth on August 14, 1947. West Pakistan 
comprised the contiguous Muslim-majority districts of present-day 
Pakistan; East Pakistan consisted of a single province, which is now 
Bangladesh.

The Maharaja of Kashmir was reluctant to make a decision on accession to 
either Pakistan or India. However, armed incursions into the state by 
tribesman from the NWFP led him to seek military assistance from India. 
The Maharaja signed accession papers in October 1947 and allowed Indian 
troops into much of the state. The Government of Pakistan, however, 
refused to recognize the accession and campaigned to reverse the 
decision. The status of Kashmir has remained in dispute.

After Independence

With the death in 1948 of its first head of state, Muhammad Ali Jinnah, 
and the assassination in 1951 of its first Prime Minister, Liaqat Ali 
Khan, political instability and economic difficulty became prominent 
features of post-independence Pakistan. On October 7, 1958, President 
Iskander Mirza, with the support of the army, suspended the 1956 
constitution, imposed martial law, and canceled the elections scheduled 
for January 1959. Twenty days later the military sent Mirza into exile 
in Britain and Gen. Mohammad Ayub Khan assumed control of a military 
dictatorship. After Pakistan's loss in the 1965 war against India, Ayub 
Khan's power declined. Subsequent political and economic grievances 
inspired agitation movements which compelled his resignation in March 
1969.

General elections held in December 1970 polarized relations between the 
eastern and western sections of Pakistan. The Awami League, which 
advocated autonomy for the more populous East Pakistan, swept the East 
Pakistan seats to gain a majority in Pakistan as a whole. The Pakistan 
Peoples Party (PPP), founded and led by Ayub Khan's former Foreign 
Minister, Zulfikar Ali Bhutto, won a majority of the seats in West 
Pakistan, but the country was completely split with neither major party 
having any support in the other area. Negotiations to form a coalition 
government broke down and a civil war ensued. India attacked East 
Pakistan and captured Dhaka in December 1971, when the eastern section 
declared itself the independent nation of Bangladesh. Yahya Khan then 
resigned the presidency and handed over leadership of the western part 
of Pakistan to Bhutto, who became President and the first civilian Chief 
Martial Law Administrator.

Bhutto moved decisively to restore national confidence and pursued an 
active foreign policy, taking a leading role in Islamic and Third World 
forums. Although Pakistan did not formally join the non-aligned movement 
until 1979, the position of the Bhutto government coincided largely with 
that of the non-aligned nations. Domestically, Bhutto pursued a populist 
agenda and nationalized major industries and the banking system. In 
1973, he promulgated a new constitution accepted by most political 
elements and relinquished the presidency to become Prime Minister.

Although Bhutto continued his populist and socialist rhetoric, he 
increasingly relied on Pakistan's urban industrialists and rural 
landlords. Over time the economy stagnated, largely as a result of the 
dislocation and uncertainty produced by Bhutto's frequently changing 
economic policies. When Bhutto proclaimed his own victory in the March 
1977 national elections, the opposition Pakistan National Alliance (PNA) 
denounced the results as fraudulent and demanded new elections. Bhutto 
resisted and, after endemic political violence in Pakistan, arrested the 
PNA leadership.

1977-1985 Martial Law 

With increasing anti-government unrest, the army grew restive. On July 
5, 1977, the military removed Bhutto from power and arrested him, 
declared martial law, and suspended portions of the 1973 constitution. 
Chief of Army Staff Gen. Muhammad Zia ul-Haq became Chief Martial Law 
Administrator and promised to hold new elections within 3 months.

Zia released Bhutto and asserted that he could contest new elections 
scheduled for October 1977. However, after it became clear that Bhutto's 
popularity had survived his government, Zia postponed the elections and 
began criminal investigations of the senior PPP leadership. 
Subsequently, Bhutto was convicted and sentenced to death for alleged 
conspiracy to murder a political opponent. Despite international appeals 
on his behalf, Bhutto was hanged on April 6, 1979.

Zia assumed the Presidency and called for elections in November. 
However, fearful of a PPP victory, Zia banned political activity in 
October 1979 and postponed national elections.

In 1980, most center and left parties, led by the PPP, formed the 
Movement for the Restoration of Democracy [MRD]. The MRD demanded Zia's 
resignation, an end to martial law, new elections, and restoration of 
the constitution as it existed before Zia's takeover. In early December 
1984, President Zia proclaimed a national referendum for December 19 on 
his "Islamization" program. He implicitly linked approval of 
"Islamization" with a mandate for his continued presidency. Zia's 
opponents, led by the MRD, boycotted the elections. When the government 
claimed a 63% turnout, with more than 90% approving the referendum, many 
observers questioned these figures.

On March 3, 1985, President Zia proclaimed constitutional changes 
designed to increase the power of the President vis-a-vis the Prime 
Minister (under the 1973 constitution the President had been mainly a 
figurehead). Subsequently, Zia nominated Muhammad Khan Junejo, a Muslim 
League member, as Prime Minister. The new National Assembly unanimously 
endorsed Junejo as Prime Minister and, in October 1985, passed Zia's 
proposed eighth amendment to the constitution, legitimizing the actions 
of the martial law government, exempting them from judicial review 
(including decisions of the military courts), and enhancing the powers 
of the President.

The Return of Democracy

On December 30, 1985, President Zia removed martial law and restored the 
fundamental rights safeguarded under the constitution. He also lifted 
the Bhutto government's declaration of emergency powers. The first 
months of 1986 witnessed a rebirth of political activity throughout 
Pakistan. All parties --including those continuing to deny the 
legitimacy of the Zia/Junejo government--were permitted to organize and 
hold rallies. In April 1986, PPP leader Benazir Bhutto, daughter of 
Zulfiqar Ali Bhutto, returned to Pakistan from exile in Europe.

Following the lifting of martial law, the increasing political 
independence of Prime Minister Junejo and his differences with Zia over 
Afghan policy resulted in tensions between them. On May 29, 1988, 
President Zia dismissed the Junejo government and called for November 
elections. In June, Zia proclaimed the supremacy in Pakistan of Shari'a 
(Islamic law), by which all civil law had to conform to traditional 
Muslim edicts.

On August 17, a plane carrying President Zia, American Ambassador Arnold 
Raphel, U.S. Brig. General Herbert Wassom, and 28 Pakistani military 
officers crashed on a return flight from a military equipment trial near 
Bahawalpur, killing all of its occupants. In accordance with the 
constitution, Chairman of the Senate Ghulam Ishaq Khan became Acting 
President and announced that elections scheduled for November 1988 would 
take place.

After winning 93 of the 205 National Assembly seats contested, the PPP, 
under the leadership of Benazir Bhutto, formed a coalition government 
with several smaller parties, including the Muhajir Qaumi Movement 
(MQM). The Islamic Democratic Alliance (IJI), a multi-party coalition 
led by the PML and including religious right parties such as the Jamaat-
i-Islami (JI), won 55 National Assembly seats.

Differing interpretations of constitutional authority, debates over the 
powers of the central government relative to those of the provinces, and 
the antagonistic relationship between the Bhutto Administration and 
opposition governments in Punjab and Balochistan seriously impeded 
social and economic reform programs. Ethnic conflict, primarily in Sindh 
province, exacerbated these problems. A fragmentation in the governing 
coalition and the military's reluctance to support an apparently 
ineffectual and corrupt government were accompanied by a significant 
deterioration in law and order.

In August 1990, President Khan, citing his powers under the eighth 
amendment to the constitution, dismissed the Bhutto government and 
dissolved the national and provincial assemblies. New elections, held in 
October of 1990, confirmed the political ascendancy of the IJI. In 
addition to a two-thirds majority in the National Assembly, the alliance 
acquired control of all four provincial parliaments and enjoyed the 
support of the military and of President Khan. Muhammad Nawaz Sharif, as 
leader of the PML, the most prominent Party in the IJI, was elected 
Prime Minister by the National Assembly.

Sharif emerged as the most secure and powerful Pakistani Prime Minister 
since the mid-1970s. Under his rule, the IJI achieved several important 
political victories. The implementation of Sharif's economic reform 
program, involving privatization, de-regulation, and encouragement of 
private sector economic growth, greatly improved Pakistan's economic 
performance and business climate. The passage into law in May 1991 of a 
Shariat bill, providing for widespread Islamization, legitimized the IJI 
government among much of Pakistani society.

After PML President Junejo's death in March 1993, Sharif loyalists 
unilaterally nominated him as the next party leader. Consequently, the 
PML divided into the PML Nawaz (PML/N) group, loyal to the Prime 
Minister, and the PML Junejo group (PML/J), supportive of Hamid Nasir 
Chatta, the President of the PML/J group.

However, Nawaz Sharif was not able to reconcile the different objectives 
of the IJI's constituent parties. The largest fundamentalist party, 
Jamaat-i-Islami (JI), abandoned the alliance because of its perception 
of PML hegemony. The regime was weakened further by the military's 
suppression of the MQM, which had entered into a coalition with the IJI 
to contain PPP influence, and allegations of corruption directed at 
Nawaz Sharif. In April 1993, President Khan, citing "maladministration, 
corruption, and nepotism" and espousal of political violence, dismissed 
the Sharif government, but the following month the Pakistan Supreme 
Court reinstated the National Assembly and the Nawaz Sharif government. 
Continued tensions between Sharif and Khan resulted in governmental 
gridlock and the Chief of Army Staff brokered an arrangement under which 
both the President and the Prime Minister resigned their offices in July 
1993.

An interim government, headed by Moeen Qureshi, a former World Bank Vice 
President, took office with a mandate to hold national and provincial 
parliamentary elections in October. Despite its brief term, the Qureshi 
government adopted political, economic, and social reforms that 
generated considerable domestic support and foreign admiration.

In the October 1993 elections, the PPP won a plurality of seats in the 
National Assembly and Benazir Bhutto was asked to form a government. 
However, because it did not acquire a majority in the National Assembly, 
the PPP's control of the government depended upon the continued support 
of numerous independent parties, particularly the PML/J. The unfavorable 
circumstances surrounding PPP rule--the imperative of preserving a 
coalition government, the formidable opposition of Nawaz Sharif's PML/N 
movement, and the insecure provincial administrations--presented 
significant difficulties for the government of Prime Minister Bhutto. 
However, the election of Prime Minister Bhutto's close associate, Farooq 
Leghari, as President in November 1993 gave her a stronger power base.

In November 1996, President Leghari dismissed the Bhutto government, 
charging it with corruption, mismanagement of the economy, and 
implication in extra-judicial killings in Karachi. Elections in February 
1997 resulted in an overwhelming victory for the PML/Nawaz, and 
President Leghari called upon Nawaz Sharif to form a government. In 
March 1997, Sharif proposed and Parliament passed a constitutional 
amendment removing the President's power to dissolve Parliament and 
making his power to appoint military service chiefs and provincial 
governors contingent on the "advice" of the Prime Minister.

Sharif has cited tackling the economic crisis, corruption and 
institutional reform as his three primary objectives. In October 1997, 
Sharif's government secured a $1.6-billion IMF assistance program. 
Approval of the program is expected to trigger support from other 
international financial institutions as well as give a boost to business 
confidence and the markets. An increase in sectarian violence and a 
lengthy confrontation over appointments of Supreme Court judges have 
distracted the government from its stated objectives.

Government

The Pakistan constitution of August 1973, amended substantially in 1985 
under Zia, provides for a President (Chief of State) elected for a 5-
year term by an Electoral College that consists of the Senate, National 
Assembly, and the members of the four provincial assemblies; and a Prime 
Minister (head of government) elected by the National Assembly in a 
special session. After the election, the President invites the Prime 
Minister to create a government. The constitution permits a vote of "no 
confidence" against the Prime Minister by a majority of the entire 
National Assembly, provided that it is not in the annual budget session.

The National Assembly -- 217 members (10 of whom represent minorities) 
elected directly by universal adult suffrage -- has a 5-year term. In 
1990, a constitutional provision which established 20 reserved seats for 
women expired and has not been renewed. The Senate consists of 87 
members elected indirectly for 6 years (19 from each of the provincial 
assemblies, 8 from the federally administered tribal areas, and 3 from 
the federal capital area). One-third of the senate members stand for 
reelection every 2 years.

Two lists--federal and concurrent--designate jurisdiction on legislative 
subjects; all residual powers belong to the provinces. According to the 
1973 constitution, the President, after consulting with the Prime 
Minister, appoints provincial governors, who act on the advice of the 
Cabinet or Chief Minister of the province.

The Supreme Court is Pakistan's highest court. The President appoints 
the chief justice, and they together determine the other judicial 
appointments. Each province has a high court, the justices of which are 
appointed by the President after conferring with the Chief Justice of 
the Supreme Court, the provincial governor, and the provincial chief 
justice. During the martial law period, the powers and autonomy of the 
civilian judiciary were curtailed. Several martial law decrees extended 
the jurisdiction of military tribunals and prohibited the civilian 
judiciary from reviewing the procedures and decisions of military 
courts.

National Security

Pakistan's 585,000-member armed forces, the world's eighth largest, are 
well trained and disciplined. Pakistan operates military equipment from 
several foreign sources, among which the United States, China, France, 
and the United Kingdom are the most significant. Much of this equipment 
is becoming dated. The government's extensive efforts to modernize 
Pakistan's defense capability are frustrated by the country's limited 
industrial base and fiscal resources.

Until 1990, the United States provided military aid to Pakistan to 
modernize Pakistan's conventional defensive capability. The United 
States allocated about 40% of its assistance package to Pakistan to 
nonreimbursable credits for military purchases; the remainder of the 
program was devoted to economic assistance. U.S. government military and 
new economic assistance to Pakistan, excepting counter-narcotics 
assistance and disaster relief, was suspended in October 1990 due to the 
Administration's inability to certify under the Pressler Amendment that 
Pakistan did not possess a nuclear explosive device.

Principal Government Officials

President--Farooq Ahmad Khan Leghari 
Prime Minister--Mian Muhammad Nawaz Sharif 
Minister of Foreign Affairs--Gohar Ayub Khan 
Ambassador to the U.S.--Riaz Hussain Khokar 
Ambassador to the UN--Ahmad Kamal

Pakistan maintains an embassy in the United States at 2315 Massachusetts 
Avenue, N.W., Washington, DC 20008 (Tel. 202-939-6200).

Economy

Extreme poverty and underdevelopment in Pakistan obscure the reality of 
a country which has the resources and entrepreneurial skill to support 
rapid economic growth. In fact, the economy averaged an impressive 
growth rate of 6.2% per year during the 1980s and early 1990s. However, 
the economy is extremely vulnerable to Pakistan's external and internal 
shocks, such as in 1992-93, when devastating floods and political 
uncertainty combined to depress economic growth sharply. Average real 
GDP growth from 1992 to 1997 dipped to 3.9% annually.

Since the early 1980s, the government has pursued market-based economic 
reform policies. Market-based reforms began to take hold in 1988, when 
the government launched an ambitious IMF-assisted structural adjustment 
program in response to chronic and unsustainable fiscal and external 
account deficits. Since that time, the government has removed barriers 
to foreign trade and investment, begun to reform the financial system, 
eased foreign exchange controls, and privatized dozens of state-owned 
enterprises. Progress on reducing the budget and current-account 
deficits has been mixed, however. The budget deficit in FY 1996-97 was 
an estimated 6.2% of GDP, down only 0.1% over the previous fiscal year. 
Over the same 2-year period, the Pakistani rupee has been devalued 
twice, losing about 30% of its value against the U.S. dollar.

However, macroeconomic stability and sound fiscal policies were restored 
during the second half of 1993 under the interim government of Prime 
Minister Moeen Qureshi. Largely as a result, Pakistan was able to secure 
a $1.3 billion financing package from the IMF in February 1994. The 
government's FY 1994-95 budget was designed to broaden structural 
reforms and reduce the budget deficit through tax reform and other 
revenue mobilization measures. It also sought to contain defense 
spending which, together with debt servicing, exceeds government 
revenue.

With a per capita GDP of about $470, Pakistan is considered a low-income 
country by the World Bank. No more than 39% of adults are literate, and 
life expectancy at birth is about 62 years. The population, currently 
about 135 million, is growing at about 2.8% per year, roughly the same 
rate as GDP growth. Relatively few resources have been devoted to socio-
economic development or infrastructure projects. Inadequate provision of 
social services and high population growth have contributed to a 
persistence of poverty and unequal income distribution.

Agriculture and Natural Resources

The country's principal natural resource is arable land (25% of the 
total land area is under cultivation). It boasts one of the largest 
irrigation systems in the world. Agriculture accounts for about 24% of 
GDP and employs about 50% of the labor force. The most important crops 
are wheat, cotton, and rice, which together account for almost 70% of 
the value of total crop output. Intensive farming practices have enabled 
Pakistan to become a net food exporter. Pakistan exports rice, fish, 
fruits, and vegetables, and imports wheat, vegetable oil, and sugar.

The economic importance of agriculture has declined since independence 
(when its share of GDP was around 53%). Following the poor harvest of 
1993, the government introduced agriculture assistance policies, such as 
increasing support prices for many agricultural commodities, expanding 
the availability of agricultural credit, and providing incentives for 
the import of agricultural machinery. From 1993 to 1997, real growth in 
the agricultural sector averaged 5.7%, compared to about 4% for the 
economy as a whole. Pakistan has extensive energy resources, including 
fairly sizable natural gas reserves, some proven oil reserves, coal, and 
large hydropower potential. However, the exploitation of energy 
resources has been slow due to a shortage of capital and domestic 
political constraints. For instance, domestic petroleum production 
totals only about half the country's oil needs. Moreover, despite plans 
to build several large power plants in the coming years, Pakistan's 
energy grid is unable to meet the country's growing needs, creating an 
energy gap which represents a major constraint on economic growth. The 
need to import oil also contributes to Pakistan's persistent trade 
deficits and the shortage of foreign exchange. Consequently, the 
government has made development of the energy sector its first economic 
priority. In FY 1996-97, real growth in the electricity and gas 
distribution industry was nearly 12%. The latest policy aims to develop 
thermal and hydropower generation capacity through private sector 
investment while also encouraging development of offshore oil reserves.

Industry

Pakistan's manufacturing sector accounts for about 20% of GDP. Cotton 
textile production and apparel manufacturing are Pakistan's largest 
industries, accounting for about 50% of total exports. Other major 
industries include cement, fertilizer, edible oil, sugar, steel, 
tobacco, chemicals, machinery, and food processing. Despite ongoing 
government efforts to privatize large-scale parastatal units, the public 
sector continues to account for a significant proportion of industry. In 
FY 1996-97, gross fixed capital formation in the public sector accounted 
for about 38% of the total, a level that has remained stable throughout 
the decade. In the face of an increasing trade deficit, the government 
hopes to diversify the country's industrial base and bolster export 
industries.

Foreign Trade and Aid

Weak world demand for its exports and domestic political uncertainty 
have contributed to Pakistan's widening trade deficit. In FY 1996-97, 
Pakistan recorded a current account deficit of $4.3 billion, up from 
$1.8 billion in FY 1987-88 and only a slight improvement over the FY 
1995-96 trade gap of $4.6 billion. Pakistan's exports continue to be 
dominated by cotton textiles and apparel, despite government 
diversification efforts. Major imports include petroleum and petroleum 
products, edible oil, wheat, chemicals, fertilizer, capital goods, 
industrial raw materials, and consumer products. External imbalance has 
left Pakistan with a growing foreign debt burden. Principal and interest 
payments in FY 1996-97 totaled $2.5 billion, more than double the amount 
paid in FY 1987-88. Annual debt service now exceeds 27% of export 
earnings.

Pakistan receives about $2 billion per year in loan/grant assistance 
from international financial institutions (e.g., the IMF, the World 
Bank, and the Asian Development Bank) and bilateral donors. 
Increasingly, the composition of assistance to Pakistan has shifted away 
from grants toward loans repayable in foreign exchange. All new U.S. 
economic assistance to Pakistan was suspended after October 1990, when 
then-President Bush could no longer certify under the Pressler Amendment 
to the Foreign Assistance Act [Section 620e(e)] "that Pakistan does not 
possess a nuclear explosive device and that the proposed assistance 
package reduces significantly the risk that Pakistan will acquire a 
nuclear explosive device."

Foreign Relations

Pakistan is a prominent member of the Organization of the Islamic 
Conference (OIC) and an active member of the United Nations. In 1989, 
Pakistan rejoined the British Commonwealth. Its foreign policy 
encompasses historically difficult relations with India, a desire for a 
stable Afghanistan, long-standing close relations with China, extensive 
security and economic interests in the Persian Gulf, and wide-ranging 
bilateral relations with the United States and other Western countries.

India

Since partition, relations between Pakistan and India have been 
characterized by rivalry and suspicion. Although many issues divide the 
two countries, the most sensitive one since independence has been the 
status of Kashmir.

At the time of partition, the princely state of Kashmir, though ruled by 
a Hindu Maharajah, had an overwhelmingly Muslim population. When the 
Maharajah hesitated in acceding to either Pakistan or India in 1947, 
some of his Muslim subjects, aided by tribesmen from Pakistan, revolted 
in favor of joining Pakistan. In exchange for military assistance in 
containing the revolt, the Kashmiri ruler offered his allegiance to 
India. Indian troops occupied the eastern portion of Kashmir, including 
its capital, Srinigar, while the western part came under Pakistani 
control.

India addressed this dispute in the United Nations on January 1, 1948. 
One year later, the UN arranged a cease-fire along a line dividing 
Kashmir, but leaving the northern end of the line undemarcated and the 
vale of Kashmir (with the majority of the population) under Indian 
control. India and Pakistan agreed with Indian resolutions which called 
for a UN-supervised plebiscite to determine the state's future.

Full-scale hostilities erupted in September 1965, when India alleged 
that insurgents trained and supplied by Pakistan were operating in 
India-controlled Kashmir. Hostilities ceased 3 weeks later, following 
mediation efforts by the UN and interested countries. In January 1966, 
Indian and Pakistani representatives met in Tashkent, U.S.S.R., and 
agreed to attempt a peaceful settlement of Kashmir and their other 
differences.

Following the 1971 Indo-Pakistan conflict, President Zulfiqar Ali Bhutto 
and Indian Prime Minister Indira Gandhi met in the mountain town of 
Shimla, India, in July 1972. They agreed to a line of control in Kashmir 
resulting from the December 17, 1971 cease-fire, and endorsed the 
principle of settlement of bilateral disputes through peaceful means. In 
1974, Pakistan and India agreed to resume postal and telecommunications 
linkages, and to enact measures to facilitate travel. Trade and 
diplomatic relations were restored in 1976 after a hiatus of 5 years.

India's nuclear test in 1974 generated great uncertainty in Pakistan and 
is generally acknowledged to have been the impetus for Pakistan's 
nuclear weapons development program. In 1983, the Pakistani and Indian 
governments accused each other of aiding separatists in their respective 
countries, i.e., Sikhs in India's Punjab state and Sindhis in Pakistan's 
Sindh province. In April 1984, tensions erupted after troops were 
deployed to the Siachen Glacier, a high-altitude desolate area close to 
the China border left undemarcated by the cease-fire agreement (Karachi 
Agreement) signed by Pakistan and India in 1949.

Tensions diminished after Rajiv Gandhi became Prime Minister in November 
1984 and after a group of Sikh hijackers was brought to trial by 
Pakistan in March 1985. In December 1985, President Zia and Prime 
Minister Gandhi pledged not to attack each other's nuclear facilities. 
(A formal "no attack" agreement was signed in January 1991.) In early 
1986, the Indian and Pakistani governments began high-level talks to 
resolve the Siachen Glacier border dispute and to improve trade.

Bilateral tensions increased in early 1990, when Kashmiri militants 
began a campaign of violence against Indian Government authority in 
Jammu and Kashmir. Subsequent high-level bilateral meetings relieved the 
tensions between India and Pakistan, but relations worsened again after 
the destruction of the Ayodhya Mosque by Hindu extremists in December 
1992 and terrorist bombings in Bombay in March 1993. Talks between the 
Foreign Secretaries of both countries in January 1994 resulted in 
deadlock.

After taking office in February 1997, Sharif moved to resume the 
official dialogue with India. Meetings which have taken place at the 
Foreign Secretary and Prime Ministerial level have featured positive 
atmospherics and a mutual determination to keep the process going. 
However, procedural issues have -- at least for the moment (November 
1997) -- stalled further progress. Tensions remain, particularly over 
Kashmir, nuclear and ballistic missile proliferation and other defense 
and internal security matters, communal concerns, and economic issues.

Afghanistan

Following the 1979 Soviet invasion of Afghanistan, the Pakistani 
Government played a vital role in supporting the Afghan resistance 
movement and assisting Afghan refugees. After the Soviet withdrawal in 
February 1989, Pakistan, with cooperation from the world community, 
continued to provide extensive support for displaced Afghans. From 1992 
to 1997 the United States has provided nearly $85 million in 
humanitarian assistance for Afghan refugees in Pakistan, mainly through 
multilateral organizations. In 1997, more than 1.2 million Afghan 
refugees remained in Pakistan, as fighting between rival factions 
continued in parts of the country.

Russian Federation

Under military leader Ayub Khan, Pakistan sought to improve relations 
with the Soviet Union; trade and cultural exchanges between the two 
countries increased between 1966 and 1971. However, Soviet criticism of 
Pakistan's position in the 1971 war with India weakened bilateral 
relations, and many Pakistanis believed that the August 1971 Indo-Soviet 
Treaty of Friendship, Peace and Cooperation encouraged Indian 
belligerency. Subsequent Soviet arms sales to India, amounting to 
billions of dollars on concessional terms, reinforced this argument.

During the 1980s, tensions increased between the Soviet Union and 
Pakistan, because of the latter's key role in helping to organize 
political and material support for the Afghan rebel forces. The 
withdrawal of Soviet forces from Afghanistan and the collapse of the 
former Soviet Union have resulted in significantly improved bilateral 
relations.

People's Republic of China

In 1950, Pakistan was among the first countries to recognize the 
People's Republic of China (P.R.C.). Following the Sino-Indian 
hostilities of 1962, Pakistan's relations with China became stronger; 
since then, the two countries have regularly exchanged high-level visits 
resulting in a variety of agreements. China has provided economic, 
military, and technical assistance to Pakistan.

Favorable relations with China have been a pillar of Pakistan's foreign 
policy. The P.R.C. strongly supported Pakistan's opposition to Soviet 
involvement in Afghanistan and is perceived by Pakistan as a regional 
counterweight to India and Russia.

Iran and the Persian Gulf

Historically, Pakistan has had close geopolitical and cultural-religious 
linkages with Iran. However, strains in the relationship appear to have 
recently intensified. Pakistan and Iran support opposing factions in the 
Afghan conflict. Also, some Pakistanis suspect Iranian support for 
sectarian violence which has plagued Pakistan. Nevertheless, Pakistan 
pursues an active diplomatic relationship with Iran.

Despite popular support for Iraq in 1991, the Pakistani government 
supported the coalition against Iraq's invasion of Kuwait and sent 
11,600 troops to defend Saudi Arabia. Pakistan provides military 
personnel to strengthen gulf-state defenses and to reinforce its own 
security interests in the area.

U.S.-Pakistan Relations

The United States and Pakistan established diplomatic relations in 1947. 
The U.S. agreement to provide economic and military assistance to 
Pakistan and the latter's partnership in the Baghdad Pact/CENTO and 
SEATO strengthened relations between the two nations. However, the U.S. 
suspension of military assistance during the 1965 Indo-Pakistan war 
generated a widespread feeling in Pakistan that the United States was 
not a reliable ally. Even though the United States suspended military 
assistance to both countries involved in the conflict, the suspension of 
aid affected Pakistan much more severely. Gradually, relations improved 
and arms sales were renewed in 1975. Then, in April 1979, the United 
States cut off economic assistance to Pakistan, except food assistance, 
as required under the Symington Amendment to the Foreign Assistance Act 
of 1961, due to concerns about Pakistan's nuclear program.

The Soviet invasion of Afghanistan in December 1979 highlighted the 
common interest of Pakistan and the United States in peace and stability 
in South Asia. In 1981, the United States and Pakistan agreed on a $3.2-
billion military and economic assistance program aimed at helping 
Pakistan deal with the heightened threat to security in the region and 
its economic development needs.

Recognizing national security concerns and accepting Pakistan's 
assurances that it did not intend to construct a nuclear weapon, 
Congress waived restrictions (Symington Amendment) on military 
assistance to Pakistan. In March 1986, the two countries agreed on a 
second multi-year (FY 1988-93) $4-billion economic development and 
security assistance program. On October 1, 1990, however, the United 
States suspended all military assistance and new economic aid to 
Pakistan under the Pressler Amendment, which required that the President 
certify annually that Pakistan "does not possess a nuclear device." 
Since then, both countries continue to cooperate in areas of common 
interest such as UN peace-keeping missions.

There have been several incidents of violence against American officials 
and U.S. mission employees in Pakistan. In November 1979, false rumors 
that the United States had participated in the seizure of the Grand 
Mosque in Mecca provoked a mob attack on the U.S. embassy in Islamabad. 
The government's delayed response enabled the mob to burn the embassy. 
Four people died, two of them U.S. nationals. The American Cultural 
Center in Lahore also was destroyed by fire. At the time of the 
incident, U.S. assistance to Pakistan had been suspended because of 
concerns about Pakistan's nuclear program. In 1989, there was an attack 
on the American Center in Islamabad, where six Pakistanis were killed in 
the crossfire with the police. In March of 1995, two American employees 
of the consulate in Karachi were killed and one wounded in an attack on 
the home-to-office shuttle.

During the second Clinton Administration there has been renewed U.S. 
Government interest in South Asia. The U.S. Government has been 
encouraged by developments in the region, including resumption of 
official dialogue between Pakistan and India, economic reforms in the 
region, and strengthened democratic governments in all but two countries 
in the region. This renewed interest is manifested in a series of high-
level visits of U.S. officials including the Under Secretary of State 
for Political Affairs in October 1997, the Secretary of State in 
November 1997, and a planned Presidential visit in the first quarter of 
1998.

Principal U.S. Embassy Officials

Ambassador--Thomas W. Simons, Jr. 
Deputy Chief of Mission--Alan W. Eastham 
Defense Attache--Col. Herb Stoddard 
Defense Representative--Col. James L. Spring
Counselor for Political Affairs--Thomas L. Price 
Counselor for Economic Affairs--James S. Elliott 
Public Affairs Officer--Barrie Walkley 
Consul General--Bernard Alter 
Consul General, Karachi--Douglas B. Archard 
Principal Officer, Lahore--Geoffrey Pyatt 
Principal Officer, Peshawar--Bradford E. Hanson

The U.S. Embassy is located at the Diplomatic Enclave, Ramna 5, 
Islamabad [Tel. (92)-(51)-826161; telex 82-5-864]. 


TRAVEL AND BUSINESS INFORMATION

The U.S. Department of State's Consular Information Program provides 
Travel Warnings and Consular Information Sheets. Travel Warnings are 
issued when the State Department recommends that Americans avoid travel 
to a certain country. Consular Information Sheets exist for all 
countries and include information on immigration practices, currency 
regulations, health conditions, areas of instability, crime and 
security, political disturbances, and the addresses of the U.S. posts in 
the country. Public Announcements are issued as a means to disseminate 
information quickly about terrorist threats and other relatively short-
term conditions overseas which pose significant risks to the security of 
American travelers. Free copies of this information are available by 
calling the Bureau of Consular Affairs at 202-647-5225 or via the fax-
on-demand system: 202-647-3000. Travel Warnings and Consular Information 
Sheets also are available on the Consular Affairs Internet home page: 
http://travel.state.gov and the Consular Affairs Bulletin Board (CABB). 
To access CABB, dial the modem number: (301-946-4400 (it will 
accommodate up to 33,600 bps), set terminal communications program to N-
8-1 (no parity, 8 bits, 1 stop bit); and terminal emulation to VT100. 
The login is travel and the password is info (Note: Lower case is 
required). The CABB also carries international security information from 
the Overseas Security Advisory Council and Department's Bureau of 
Diplomatic Security. Consular Affairs Trips for Travelers publication 
series, which contain information on obtaining passports and planning a 
safe trip abroad, can be purchased from the Superintendent of Documents, 
U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-
7954; telephone: 202-512-1800; fax 202-512-2250. 

Emergency information concerning Americans traveling abroad may be 
obtained from the Office of Overseas Citizens Services at (202) 647-
5225. For after-hours emergencies, Sundays and holidays, call 202-647-
4000. 

Passport Services information can be obtained by calling the 24-hour, 7-
day a week automated system ($.35 per minute) or live operators 8 a.m. 
to 8 p.m. (EST) Monday-Friday ($1.05 per minute). The number is 1-900-
225-5674 (TDD: 1-900-225-7778). Major credit card users (for a flat rate 
of $4.95) may call 1-888-362-8668 (TDD: 1-888-498-3648) 

Travelers can check the latest health information with the U.S. Centers 
for Disease Control and Prevention in Atlanta, Georgia. A hotline at 
(404) 332-4559 gives the most recent health advisories, immunization 
recommendations or requirements, and advice on food and drinking water 
safety for regions and countries. A booklet entitled Health Information 
for International Travel (HHS publication number CDC-95-8280) is 
available from the U.S. Government Printing Office, Washington, DC 
20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements, currency and 
customs regulations, legal holidays, and other items of interest to 
travelers also may be obtained before your departure from a country's 
embassy and/or consulates in the U.S. (for this country, see "Principal 
Government Officials" listing in this publication). 

U.S. citizens who are long-term visitors or traveling in dangerous areas 
are encouraged to register at the U.S. embassy upon arrival in a country 
(see "Principal U.S. Embassy Officials" listing in this publication). 
This may help family members contact you in case of an emergency. 

Further Electronic Information: 

Department of State Foreign Affairs Network. Available on the Internet, 
DOSFAN provides timely, global access to official U.S. foreign policy 
information. Updated daily, DOSFAN includes Background Notes; Dispatch, 
the official magazine of U.S. foreign policy; daily press briefings; 
Country Commercial Guides; directories of key officers of foreign 
service posts; etc. DOSFAN's World Wide Web site is at 
http://www/state/gov.

U.S. Foreign Affairs on CD-ROM (USFAC). Published on a semi-annual basis 
by the U.S. Department of State, USFAC archives information on the 
Department of State Foreign Affairs Network, and includes an array of 
official foreign policy information from 1990 to the present. Contact 
the Superintendent of Documents, U.S. Government Printing Office, P.O. 
Box 371954, Pittsburgh, PA 15250-7954. To order, call (202) 512-1800 or 
fax (202) 512-2250.

National Trade Data Bank (NTDB). Operated by the U.S. Department of 
Commerce, the NTDB contains a wealth of trade-related information. It is 
available on the Internet  (www.state.usa.gov) and on CD-ROM. Call the 
NTDB Help-Line at (202) 482-1986 for more information. 

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