Background Note: Pakistan - Part 2
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Industry
Pakistan's manufacturing sector accounts for about 26% of GDP. Cotton textile production and apparel manufacturing are Pakistan's largest industries, accounting for about 64% 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 1998-99, gross fixed capital formation in the public sector accounted for about 38% of the total. 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 high trade deficit. In FY 1998-99, Pakistan recorded a current account deficit of $1.7 billion, only a slight improvement over the FY 1997-98 current account deficit of $1.9 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 1998-99 totaled $2.6 billion, more than double the amount paid in FY 1989-90. Annual debt service now exceeds 34% of export earnings.
Pakistan receives about $2.5 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. 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, Srinagar, 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 three 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 five 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.
In the last several years, the Indo-Pakistani relationship has veered sharply between rapprochement and conflict. After taking office in February 1997, Prime Minister Nawaz Sharif moved to resume official dialog with India. A number of meetings at the foreign secretary and prime ministerial level took place, with positive atmospherics but little concrete progress. The relationship improved markedly when Indian Prime Minister Vajpayee traveled to Lahore for a summit with Sharif in February 1999. There was considerable hope that the meeting could lead to a breakthrough. Unfortunately, in spring 1999 infiltrators from Pakistan occupied positions on the Indian side of the Line of Control in the remote, mountainous area of Kashmir near Kargil, threatening the ability of India to supply its forces on Siachen Glacier. By early summer, serious fighting flared in the Kargil sector. The infiltrators withdrew following a meeting between Prime Minister Sharif and President Clinton in July. Relations between India and Pakistan have since been particularly strained, especially since the October 12, 1999 coup in Islamabad.
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. In 1999, the United States provided approximately $70 million in humanitarian assistance to Afghanistan and Afghan refugees in Pakistan, mainly through multilateral organizations and NGOs. As such, the United States in 1999 was the largest single donor. In 1999, more than 1.2 million registered Afghan refugees remained in Pakistan, as fighting between rival factions continued. Pakistan has recognized the Taliban as the government in Afghanistan and provides the Taliban assistance. Pakistan has periodically offered to try to help bring Afghanistan's warring factions to the negotiating table, thus far with negligible results.
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 resulted in significantly improved bilateral relations, but Pakistan's support for and recognition of the Taliban regime in neighboring Afghanistan is an ongoing source of tension.
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 appeared in the last decade. Pakistan and Iran support opposing factions in the Afghan conflict. Also, some Pakistanis suspect Iranian support for the sectarian violence which has plagued Pakistan. Nevertheless, Pakistan pursues an active diplomatic relationship with Iran, including recent overtures to seek a negotiated settlement between Afghanistan's warring factions.
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 explosive device."
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. 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. In November of 1997, four U.S. businessmen were brutally murdered while being driven to work in Karachi. In November 1999, the Embassy and the American Center were the targets of rocket attacks that wounded one local national security guard.
The decision by India to conduct nuclear tests in May 1998 and Pakistan's matching response set back U.S. relations in the region, which had seen renewed U.S. Government interest during the second Clinton Administration. A presidential visit scheduled for the first quarter of 1998 was postponed and, under the Glenn Amendment, sanctions restricted the provision of credits, military sales, economic assistance, and loans to the government. An intensive dialogue on nuclear nonproliferation and security issues between Deputy Secretary Talbott and Foreign Secretary Shamshad Ahmad was initiated, with discussions focusing on CTBT signature and ratification, FMCT negotiations, export controls, and a nuclear restraint regime. The October 1999 overthrow of the democratically elected Sharif government triggered an additional layer of sanctions under Section 508 of the Foreign Appropriations Act which include restrictions on foreign military financing and economic assistance. Presently, U.S. Government assistance to Pakistan is limited mainly to refugee and counter-narcotics assistance.
Principal U.S. Embassy Officials
Ambassador--William B. Milam
Deputy Chief of Mission--Michele J. Sison
Defense Attache--Col. Herb Stoddard
Defense Representative--Col. Tod Wilson
Counselor for Political Affairs--John R. Schmidt
Counselor for Economic Affairs--James S. Elliott
Public Affairs Officer--Lee James Irwin
Consul General--David Donahue
Consul General, Karachi--John Bennett
Principal Officer, Lahore--Sheldon Rapoport
Principal Officer, Peshawar--David Katz
The U.S. Embassy is located at the Diplomatic Enclave, Ramna 5, Islamabad [Tel. (92)-(51)-2080-2000; telex 82-5-864].
TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program provides Consular Information Sheets, Travel Warnings, and Public Announcements. Consular Information Sheets exist for all countries and include information on entry requirements, currency regulations, health conditions, areas of instability, crime and security, political disturbances, and the addresses of the U.S. posts in the country. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain 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. Consular Information Sheets and Travel Warnings also are available on the Consular Affairs Internet home page: travel.state.gov. Consular Affairs Tips for Travelers publication series, which contain information on obtaining passports and planning a safe trip abroad are on the internet and hard copies can be purchased from the Superintendent of Documents, U.S. Government Printing Office, 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 information can be obtained by calling the National Passport Information Center's 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). It also is available on the internet.
Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web site at cdc.gov give 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. |
