South Asia Investor Review

Just like the bad old days BRIGHTLY painted Tata lorries, laden with sacks of onions, wait in the noon heat at the Wagah border post between India and Pakistan. Once past customs, the onions will go on to Lahore and beyond. But the lorries must turn back. Their produce is laboriously loaded onto smaller vans, driven by locals. Pakistan's costly imports of food ($3.5 billion in the first ten months of this fiscal year, which ends on June 30th), fertilizer ($823m) and fuel (over $8.6 billion) may pull the economic rug from under its newly installed government, which presented its first budget, belatedly, on June 11th. The State Bank of Pakistan (SBP), the central bank, reckons the country's current-account deficit might reach 7.8% of GDP this fiscal year, its highest ever. Growth has slowed to 5.8%, inflation has quickened to over 19% and the government's budget deficit, at about 7% of GDP, is the highest in ten years. Such macroeconomic disarray will be familiar to the coali...

The Tribal Elders' Role During the British rule of undivided India, the tribal elders in the Federally Administered Tribal Areas (FATA) of Pakistan made deals with the British government that were generally adhered to and kept the peace in the autonomous tribal region. This system continued after Pakistan's independence for several decades. However, as the madrassahs proliferated in Pakistan's tribal areas since the early 1980s, there seems to be a new dynamic affecting the traditional role and influence of the FATA elders. The radical young graduates of these madrassahs are not willing to accept the traditional role of the elders and their decisions in all matters. There have been many instances of tensions reported between the local tribal elders and the Taleban on both sides of the Pakistan-Afghan border. In December 2007, AP reported that suspected Islamic militants fatally shot eight tribal leaders involved in efforts to broker a cease-fire between security forces and ...