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National Trade Data Bank
ITEM ID     : ST BNOTES PAKISTAN
DATE        : Oct 28, 1994

AGENCY      : U.S. DEPARTMENT OF STATE
PROGRAM     : BACKGROUND NOTES
TITLE       : Background Notes - PAKISTAN

Source key      : ST
Program key     : ST BNOTES
Update sched.   : Occasionally
Data type       : TEXT
End year        : 1992
Date of record  : 19941018
Keywords 3      :
Keywords 3      : | PAKISTAN

US DEPARTMENT OF STATE
PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS

BACKGROUND NOTE:  Pakistan, June 1992

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 (pop. 400,000), combined
with adjacent Rawalpindi, makes up a national capital area with a
population in excess of 1.2 million; Karachi 7 million; Lahore 3.5
million; Faisalabad 2 million.

People
Nationality: Noun and adjective--Pakistan(i).  Population:  117
million.  Annual growth rate (mid-1988): 3%.  Density: 134 per sq.
km. (346 per sq. mi.).  Ethnic groups: Punjabi, Sindhi, Pathan,
Baluch, Muhajirs (i.e., Urdu-speaking immigrants from India).
Religions: Muslim 97%; small minorities of Christians, Hindus, and
others.  Languages:  Urdu (official), English, Punjabi, Sindhi,
Pushtu, Baluchi.  Education: Literacy--26%.  Health: Infant
mortality rate (1991)--109/1,000.  Life expectancy (1991)--men 56
yrs., women 57 yrs.  Work force: Agriculture--54%.  Services--33%.
Industry--13%.

Government
Type:  Parliamentary democracy in a federal setting.  Independence:
August 14, 1947.

        Branches:  Executive--president with constitutional
authority, prime minister, cabinet.  Legislative--National Assembly
and Senate.  Judicial--provincial high courts, Supreme Court,
Federal Islamic Court.
        Political parties:  The Islamic Democratic Alliance (IJI in
Urdu), which includes the Pakistan Muslim League, and the Pakistan
People's Party (PPP), are the most important on the national level.
Other significant parties include the Muhajir Quami Movement (MQM),
the Awami National Party (ANP), and the Jamiat-ul-Ulema-i-Islam
(JUI).  Suffrage:  Universal adult over 21.  Religious minorities
and women vote for special reserved seats.
        Political subdivisions:  Four provinces--Punjab, Sindh,
Northwest Frontier, Baluchistan--each with a parliamentary system;
Northern Areas; Tribal Areas; Federal Capital.
        Flag:  White vertical band on staff side; green field with
white crescent and star in center.

Economy
GNP (Pakistan fiscal year (FY) 1990): $43 billion.  Annual growth
rate 1990:  5%.  Per capita GNP (FY1990):  $380.  Per capita growth
rate (FY 1990):  2%.
        Natural resources:  Arable land, natural gas, limited
petroleum, substantial hydropower potential, coal, iron ore.
        Agriculture (26% of GNP):  Products--wheat, cotton, rice,
sugarcane.
        Industry (18% of GDP):  Types--textiles, fertilizer, steel
products, food processing, oil and gas products.
        Trade (Pakistan FY 1990):  Exports--$4.9 billion: raw
cotton, rice, cotton yarn, textiles, fruits, vegetables.  Major
partners--Japan, US, UK, Saudi Arabia, Germany.  Imports--$6.3
billion:  crude oil, cooking oil, fertilizers, machinery.  Major
partners--Japan, US, Saudi Arabia, Malaysia, UK, Sri Lanka.
        Fiscal year:  July 1-June 30.
        Official exchange rate (1991):  about 22 rupees=US$1.
        Economic aid received:  Total--about $36 billion (1947-85).
US only (1981-87)--$3 billion; (1988-1993 est.)--$350 million
annually.  Major donors--(aid to Pakistan consortium--US, Canada,
Japan, some West European countries), World Bank, Asian Development
Bank, Saudi Arabia.

PEOPLE

        Most Pakistanis live in Karachi, in the Indus River valley,
and along an arc formed by the cities of Faisalabad, Lahore,
Rawalpindi/Islamabad, and Peshawar.  Punjabis are in the majority,
with minorities of other Indo-European language-speaking peoples.
        The official language is Urdu; spoken as a first language
by only 9% of Pakistanis; 65% speak Punjabi, 11% Sindhi, and 24%
other languages (Saraiki, Baluchi, Brahui).  Urdu, Punjabi, Pushtu,
and Baluchi are of the Indo-European language group; Brahui is
believed to have a Dravidian (pre-Indo-European) origin.  English
is widely used within the government, the military, and in many
institutions of higher learning.  The government plans gradually to
replace English with Urdu in schools and to introduce Arabic for
Islamic studies.

HISTORY

        Archeology has 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 of Aryans, Indo-European-speaking warrior tribes from the
Caucasus region in what is now the Soviet Union.  The Aryans, who
quickly dominated the subcontinent, were followed in 500 BC by
Persians and, in 326 BC, by Alexander the Great, conqueror of the
Persian Empire.
        Pakistan's Islamic history began with the arrival of Muslim
traders in the 8th century AD.  During the 16th and 17th centuries,
the Mughuls (Persian for "Mongol") united most of South Asia in an
empire marked both by its administrative effectiveness and cultural
refinement.
        British traders arrived in the region in 1601, but the
British Empire did not consolidate its control there until the
latter half of the 18th century.  After 1850, the British, or those
influenced by them, governed virtually the entire subcontinent,
including most of what is now Pakistan.
        In the early 20th century, Muslim and Hindu leaders began
to press for a greater degree of independence.  At the movement's
forefront was the largely Hindu Indian National Congress.  Growing
concern about Hindu domination of the movement led Muslim leaders
to form the All-India Muslim League in 1906.  In 1913, the League
formally adopted the same goal as the Indian National Congress:
self-government for India within the British Empire.  The Congress
and the League were unable, however to agree on a formula to ensure
the protection of Muslim religious, economic and political rights.
Over the next two decades, mounting tension between Hindus and
Muslims led to a series of bitter communal conflicts.

Pakistan and Partition
        The idea of a separate Muslim state emerged in the 1930s.
It gained popularity among Indian Muslims after 1936, when the
Muslim League suffered a decisive electoral defeat in the first
elections under the 1935 constitution.  On March 23, 1940, Muhammad
Ali Jinnah, leader of the Muslim League, publicly endorsed the
"Pakistan Resolution," that called for the creation of an
independent state in regions where Muslims were a majority.
        At the end of World War II, the United Kingdom, under
considerable international pressure to reduce the size of its
overseas empire, moved with increasing urgency to grant India
independence.  The Congress Party and the Muslim League could not,
however, agree on the terms for drafting a constitution or
establishing an interim government.  In June 1947, the British
Government declared that it would grant full dominion status to two
successor states--India and Pakistan.  Pakistan would consist of
the contiguous Muslim-majority districts of western British India,
plus parts of Bengal.  The various princely states could freely
join either India or Pakistan.  These arrangements resulted in a
bifurcated Muslim nation separated by more than 1,600 kilometers
(1,000 mi.) of Indian territory when Pakistan became a
self-governing dominion within the Commonwealth on August 14, 1947.
West Pakistan comprised four provinces and the capital, Lahore.
East Pakistan was formed of a single province.  Each province had
a legislature.

After Independence
        Pakistan's history for the next 26 years was marked by
political instability and economic difficulties.  Dominion status
was rejected in 1956 in favor of an "Islamic Republic within the
Commonwealth."  Attempts at civilian political rule failed, and the
government imposed martial law between 1958 and 1962 and 1969 and
1972.  Frictions between West and East Pakistan culminated in a
1971 army crackdown against the East Pakistan dissident movement
led by Sheikh Mujibur Rahman, whose Awami League Party had won 167
seats out of 313 National Assembly seats on a platform of greater
autonomy for the eastern province.
        Mujibur Rahman was arrested and his party banned.  Many of
his aides and more than 1 million Bengali refugees fled to India,
where they established a provisional government.  Tensions
escalated and hostilities broke out between India and Pakistan in
late November 1971.  The combined Indian-Bengali forces soon
overwhelmed Pakistan's small army contingent in the East.  By the
time Pakistan's forces surrendered on December 16, 1971, India had
taken numerous prisoners and gained control of a large area of East
Pakistan.

The Years of Zulfiqar Ali Bhutto
        Pakistan's defeat in East Pakistan resulted in the fall of
military strongman Yahya Khan on December 20, 1971.  Zulfiqar Ali
Bhutto, whose Pakistan People's Party (PPP) had won a majority of
the seats in West Pakistan in the 1970 elections, replaced Yahya.
East Pakistan gained independence as Bangladesh.
        Bhutto moved decisively to restore national confidence
after the East Pakistan disaster.  He pursued an active foreign
policy, taking a leading role in Islamic and Third World forums.
Although Pakistan did not join the Nonaligned Movement until the
Central Treaty Organization (CENTO) was dissolved in 1979 (after
Bhutto's fall), its position on most issues coincided with the
goals of the Non-Aligned Movement throughout Bhutto's tenure.
        Domestically, Bhutto cultivated the allegiance of both
urban and rural poor.  He nationalized major industries and the
banking system and dramatically increased wages and benefits for
lower income industrial workers.  The government also instituted a
land reform program and attempted to restructure the feudal social
system still intact in many rural areas, but the results never met
expectations.  In 1973, Bhutto promulgated a new constitution
approved by all political elements and stepped down as president to
become prime minister.
        Although Bhutto never departed from his populist and
reformist rhetoric, he increasingly relied for support on
Pakistan's urban industrialists and rural landlords.  His rule also
grew more authoritarian and capricious.  Over time the economy
stagnated, largely as a result of the dislocation and uncertainty
created by Bhutto's frequently changing economic policies.
        When Bhutto called for elections in March 1977, nine
leading opposition parties--from the secularist, pro-autonomy
National Democratic Party (which enjoyed significant support in the
Northwest Frontier and Baluchistan) to the conservative, religious
Jamaat-i-Islami--joined to form the Pakistan National Alliance
(PNA).  The PNA focused its campaign on the alleged inefficiency,
corruption, and immorality of the Bhutto regime.  Its attack seemed
to strike a responsive chord, and the outcome of the elections
appeared uncertain.  After Bhutto claimed a victory with two-thirds
of the National Assembly seats in the Pakistan People's Party (PPP)
hands, the opposition PNA denounced the election as a fraud and
demanded new elections.  Bhutto resisted and, after a wave of
violence swept the country, arrested the PNA leadership.

1977 Martial Law
        The army grew restive in its role as enforcer of civil
order in the face of increasing anti-government unrest.  On July 5,
1977, the military removed Bhutto from power, 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 90 days.
        Initially, Zia claimed that he had not directed his action
against Bhutto and that Bhutto could contest the election scheduled
for October 1977.  However, after it had become clear that Bhutto's
popularity had survived his government, Zia reversed his decision.
Acting in his role as Martial Law Administrator, Zia postponed the
October 1977 elections and began criminal investigations of the
senior PPP leadership.  Bhutto, released from house arrest earlier
along with other political leaders, was re-arrested, tried, and
convicted for conspiracy to murder a political opponent, whose
father was killed in the murder attempt.  The Supreme Court upheld
the verdict and death sentence, and, despite international appeals
on his behalf, Bhutto was hanged on April 6, 1979.
        After backing away from his initial commitment to hold
elections within 90 days, Zia began to institutionalize his regime.
He created an Advisory Council formed mostly of technocrats and
government servants.  In August 1978, representatives of several
political parties were added to the council, redesigned as a
cabinet.  Following the resignation of President Choudhury in
September, Zia assumed the presidency and called elections for
November.
        As the elections neared, it became clear that the PNA had
fallen into disarray and the PPP was once more the strongest party
nationwide.  Fearful of a PPP victory, Zia banned political
activity in October 1979 and postponed the national elections.
Only the elections for local bodies were held, and these took place
on a non-party basis.
        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 1973 constitution as it existed
before Zia's takeover.  In early December 1984, President Zia
proclaimed a national referendum for December 19, asking voters to
approve his program for Islamization.  He also declared that if
voters passed the referendum, they would approve his continuation
in office for 5 years from the first sitting of the next National
Assembly.  Zia's opponents, led by the MRD, called for a boycott.
Subsequently, the government claimed a 63% turnout, with more than
90% approving the referendum.  Many outside the government
questioned these figures.
        Capitalizing on his referendum victory, President Zia
announced national and provincial assembly elections for February
1985.  Candidates were required to run on a non-party basis but
were not disqualified because of past party affiliation.  Perhaps
misjudging the effectiveness of its referendum boycott and the
appeal of new elections, the MRD again urged the voters to stay
home.  However, several conservative and religious parties,
including the Pakistan Muslim League faction headed by the Pir of
Pagaro and the Jam-aat-i-Islami, endorsed the balloting.  The MRD
suffered numerous defections, as politicians abandoned their
parties to stand for office.  The boycott failed, and most
independent observers vouch for the claimed 53% turnout for the
National Assembly balloting (with a slightly higher percentage of
voter turnout in the provincial elections).  The elections
generally were free of fraud (as evidenced by the defeat of 5
serving members of Zia's Cabinet).  The boycott failure accentuated
divisions within the MRD and left Zia's opposition in further
disarray.
        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's
role was largely that of a figurehead.) Subsequently, Zia named
Muhammad Khan Junejo, a Muslim League member, as his choice for
prime minister.  The new National Assembly met for the first time
on March 23, 1985, and unanimously endorsed Junejo as prime
minister.
        The ensuing National Assembly session was dominated by the
debate over President Zia's proposed eighth amendment to the
constitution that would legitimate the actions of the martial law
government and exempt them (including decisions of the military
courts) from judicial review.  The amendment passed in October
1985, after a compromise was reached on a series of modifications
restoring some powers to the prime minister.

The Return of Democracy
        On December 30, 1985, President Zia lifted martial law and
restored all the constitutional rights safeguarded under the 1973
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 the deposed prime
minister, returned to Pakistan from exile in Europe.
        Following the lifting of martial law, Prime Minister Junejo
launched a concerted effort to strengthen his Pakistan Muslim
League (PML), which was registered as an official party in February
1986, as a political force capable of contending with the PPP and
its MRD allies on a national level.  Prime Minister Junejo's
increasing independence eventually led to a rift with President
Zia.  There were also differences between them on Pakistan's Afghan
policy.  Zia was an unabashed and outspoken supporter of the Afghan
Resistance, which had been fighting occupying Soviet forces since
those forces invaded Afghanistan in 1980.  Junejo repeatedly
expressed his concern over the effect the conflict, and
particularly the presence of 3 million Afghan refugees in Pakistan,
might have on Pakistan's internal security.
        On May 29, 1988, President Zia, citing corruption and the
prime minister's reluctance to support his Islamization policies,
dismissed the Junejo government and called elections for November.
In June, Zia proclaimed that Sharia (Islamic law) would be supreme
in Pakistan and all civil law must agree with traditional Muslim
edicts.
        On August 17, a military aircraft carrying Zia, American
Ambassador Arnold Raphel, chief of the US military aid mission to
Pakistan Brig. Gen. Herbert Wassom, and 28 Pakistani military
officers, crashed while returning from a military equipment trial
near Bahawalpur.  All on board were killed.  President of the
Senate Ghulam Ishaq Khan assumed the presidency in accordance with
the constitution.
        President Khan announced almost immediately that the
elections, scheduled for November, would go forward as planned.
The Supreme Court, which had played a very limited role under Zia,
made a series of decisions during the summer of 1988 that helped
ensure the democratic character of the November balloting.
        Observers judged the National Assembly elections on
November 16 to have been the fairest and most orderly in Pakistan's
history.  The PPP won 93 of the 205 seats contested.  The Islamic
Democratic Alliance, a coalition including the Pakistan Muslim
League, ran a distant second, winning 55 seats.  The PPP in
conjunction with several smaller parties built a viable coalition;
on December 1, President Ghulam Ishaq Khan formally requested PPP
leader Benazir Bhutto to form a government.
        Differing interpretations of constitutional authority and
responsibility hindered Pakistan's efforts to develop democratic
institutions throughout the 20 months of Ms. Bhutto's tenure.  A
constitutional debate over the powers of the president and prime
minister was caused in part by changes made in the constitution by
the late President Zia.  There was also a debate over the powers of
the central government versus those of the provinces.  Political
differences between the Bhutto administration  and opposition
governments in Punjab and Baluchistan seriously impeded social and
economic reform programs.  Ethnic divisions, primarily in Sindh,
exacerbated the problems caused by strong political,
constitutional, and regional differences.  The result of these
differences, plus the weakness of central and provincial law
enforcement agencies and the superabundance of weapons, was a
serious deterioration in law and order.
        On August 6, 1990, President Khan, pursuant to his powers
under the constitution, dismissed the Bhutto government and
dissolved the National Assembly.  The provincial assemblies were
also dissolved.  The president called for elections to be held on
October 24 for the National Assembly and October 27 for provincial
assemblies.  Caretaker governments were formed at the center and in
the four provinces.  A state of emergency was declared to enable
the president to administer in the absence of the assemblies.
Special tribunals, as provided for under the law, were established
to try politicians accused of corruption or misconduct while in
office during the period since December 1988.  Civilian
administrators and the courts continued to function, and the basic
rights guaranteed under the constitution were untouched.
        The elections were held as scheduled and were observed by
a number of international teams.  Although marred by some
irregularities, they were considered to have been generally free
and fair.  On November 6, Muhammad Nawaz Sharif, leader of the
Islamic Jamhoori Ittehad (IJI) was overwhelmingly elected prime
minister by the members of the assembly.  His first official act as
prime minister was to lift the state of emergency.

GOVERNMENT AND POLITICAL CONDITIONS

        The constitution of August 14, 1973, as amended in 1985,
provides for a president (chief of state) elected by an electoral
college (consisting of the Senate, National Assembly, and the
members of the provincial assemblies), and a prime minister--(head
of government) nominated by the president and elected by the
National Assembly in special session.  Following the election, the
prime minister is invited by the president to form the government.
        The National Assembly--217 members elected by universal
adult suffrage (207 Muslims and 10 non-Muslims)--has a 5-year term
subject to dissolution. In 1990, a constitutional provision which
established 20 reserved seats for women lapsed, and has not been
renewed. The Senate, not subject to dissolution, consists of 84
members elected indirectly for 6 years by the provincial assemblies
and tribal councils; plus three members elected from the federal
area of Islamabad, as determined by the president.  Half of the
members stand for reelection every 3 years.
        The constitution permits a vote of "no confidence" against
the prime minister by a majority of the total assembly membership,
provided that the assembly is not in the annual budget session.
        Two lists--federal and concurrent--specify jurisdiction on
legislative subjects; all residual powers belong to the provinces.
According to the 1973 constitution, the president, after
consultation with the prime minister, appoints provincial
governors, who act on the advice of the cabinet or chief minister
of the province.  Each province has a high court, with the justices
appointed by the president after consultation with the chief
justice of the Supreme Court, the provincial governor, and the
provincial chief justice.  Pakistan's highest court is the Supreme
Court.  The president appoints the chief justice and, in
consultation with him, the remaining justices.
        During the martial law period, the powers and independence
of the civilian judiciary were curtailed.  Various martial law
decrees extended the jurisdiction of military tribunals and
prohibited the civilian judiciary from reviewing the procedures and
decisions of military courts.

Principal Government Officials

President--Ghulam Ishaq Khan
Prime Minister--Mian Muhammad Nawaz Sharif
Minister of State for Foreign Affairs--Muhhamad Siddique Khan Kanju
Ambassador to the US--Syeda Abida Hussain
Ambassador to the UN--Jamsheed Marker
        Pakistan maintains an embassy in the United States at 2315
Massachusetts Avenue, NW., Washington, DC  20008  (tel.
202-939-6200).

ECONOMY

        Pakistan is a relatively poor country but has the resources
and entrepreneurial skill to support rapid economic growth.  In
fact, real growth of gross domestic product (GDP) averages 8% per
year over the decade of the 1980s (fiscal years 1981-90), with
generally moderate inflation.  Growing  fiscal imbalances, however,
pushed the budget and current account deficits to unsustainable
levels by decade's end.  Economic growth has slowed in recent
years; real GDP expanded 5% in FY 1990 and about 6% in FY 1991.
Measures adopted under a 4-year, IMF-sponsored structural
adjustment program (FY 1989-92) have improved fiscal and monetary
conditions, and eased the foreign exchange gap on the balance of
payments.  But deficit financing has substantially increased the
government's domestic and external debt burdens.  Domestic debt
service payments, for example, consumed 32% of current expenditures
in the FY 1991 budget (defense spending took another 43%).

        In FY 1991, the Government of Prime Minister Nawaz Sharif
launched an ambitious program of privatization, deregulation, and
economic reform.  Despite a slow start and resistance from the
bureaucracy and labor unions, the government is pushing ahead with
the denationalization of banks, industrial firms, and utilities.
In addition, the government has eased controls on foreign exchange,
removed barriers to foreign investment, and liberalized foreign
access to Pakistan's growing capital market.  The Prime Minister's
reform program has accelerated the trend toward private enterprise
and a market economy already underway for a decade.  For example,
investment in manufacturing in FY 1981 was fairly equally divided
between the public and private sectors.  But in 1991,  private
investment was more than 12 times higher than in the public sector.
The government envisions the virtual elimination of public sector
involvement in manufacturing by the end of FY 1992.
        Nonetheless, Pakistan still has a long way to go in terms
of economic development.  With per capita GNP of about $380, the
World Bank ranks Pakistan as a  low-income country roughly on a par
with China and India.  Only about 26% of adults are literate, and
life expectancy  at birth is about 56 years.  The population,
currently about 117 million, is estimated to be growing at about 3%
per year, and is expected to double within 20 years.  Relatively
few resources have been devoted to socioeconomic development
(especially education, health, and population programs) or
infrastructure projects.  Development accounted for 28% of total
expenditures in the FY 1991 budget.

Agriculture and Natural Resources
        The country's principal natural resource is its arable land
(25% of the total land area is under cultivation).  Agriculture
accounts for about 26% of GDP and employs more than 50% of the
labor force.  Pakistan boasts the largest contiguous irrigation
system in the world, making cultivation possible in semi-arid
regions of the country.  The most important crops include wheat,
cotton, and rice, which together account for almost 70% of total
crop output by value.  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.
        Pakistan has extensive energy resources, including fairly
sizable natural gas reserves, some proven oil reserves, and large
hydropower potential.  Exploitation of energy resources has been
slow, however, and domestic demand for power continues to outstrip
supply.  The government is developing new thermal and hydro-power
generation capability and is encouraging private investment in
power development, with some support by foreign donor agencies.
Petroleum production, in which foreign oil companies participate,
totals about 65,000 barrels per day out of a total requirement of
125,000 barrels per day.  Coal is also mined in Pakistan, with
production reaching about  267,000 tons in FY 1991.

Industry
        Cotton textile and apparel manufacturing is Pakistan's
largest industry, accounting for nearly 20% of total manufacturing
output and almost 40% of total exports.  Other major industries
include cement, fertilizer, edible oil, sugar, steel, machinery,
and food processing. Large-scale manufacturing units account for
about 70% of total output value.  The public sector, which includes
many enterprises nationalized in the 1970s, produced about 30% of
FY 1991 manufacturing output.  The public sector share, however, is
expected to decline sharply as state industrial units are sold to
private investors.

Foreign Trade
        Strong export performance and moderate import growth during
FY 1991 significantly improved Pakistan's balance of payments.
Pakistan's exports are dominated by cotton textiles and apparel,
rice, leather products, surgical and sports equipment, and carpets.
Major imports include petroleum and petroleum products, edible oil,
chemicals, fertilizer, capital goods, industrial raw materials, and
consumer products.  Despite the impact of temporarily higher oil
prices and the loss of some 100,000 Pakistani jobs in Kuwait and
Iraq as a result of the Gulf crisis, the FY 1991 current account
deficit declined to $1.5 billion, down from nearly $2 billion in FY
1989.  Amortization of Pakistan's large but manageable external
debt burden (about $25 million) consumed about 26% of export
earnings in FY 1991.  Pakistan receives about $2 billion per year
in loan/grant assistance from international financial institutions
(IMF, World Bank, Asian Development Bank) and bilateral donors,
including the US Agency for International Development (US aid is
currently suspended because of concerns about Pakistan's nuclear
program).

DEFENSE

        Pakistan's 500,000-member armed forces, the world's 11th
largest, are well trained and disciplined.  Pakistan operates
military equipment from several foreign sources--the United States,
China,   France, the United Kingdom, and others.  Much of this
equipment is outdated.  Pakistan's extensive efforts to modernize
its defense capability are frustrated by its limited industrial
base and fiscal resources.
        Until 1990, a portion of US aid to Pakistan was used to
help modernize Pakistan's conventional defensive capability.  The
United States allocated about 40% of its current (1988-93)
assistance package to nonreimbursable credits for military
purchases.  The remainder of the program is devoted to economic
assistance.  The ratio of military assistance to economic
assistance has decreased slightly in recent years, at the request
of the Government of Pakistan.  Military aid and other assistance
was suspended in October 1990 due to the Administration's inability
to 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 United States assistance
package will reduce significantly the risk that Pakistan will
possess a nuclear explosive device."

FOREIGN RELATIONS

        Pakistan is a non-aligned country, a prominent member of
the Organization of the Islamic Conference (OIC), and an active UN
member.  In 1989, Pakistan rejoined the 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 (including cordial relations with Iran), and wide-ranging
bilateral relations with the United States.

India
        Relations between Pakistan and India reflect centuries-old
Muslim-Hindu rivalries and suspicions.  Although many issues divide
the two countries, the most sensitive one since independence has
been the status of Kashmir.
        At the time of partition, Kashmir, although 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.  The Kashmiri
ruler offered his state to India in return  for military aid in
crushing the revolt.   Indian troops occupied the eastern portion
of Kashmir, including its capital, Srinigar, while the western half
came under Pakistani control.
        India took this dispute to the United Nations on January 1,
1948.  One year later, the United Nations arranged a cease-fire
along a line dividing Kashmir roughly in half 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 to hold a UN-supervised plebiscite to determine the
state's future, but India did not fulfill this commitment.
        Full-scale hostilities erupted in September 1965, when
India alleged that terrorists trained and supplied by Pakistan were
operating in India-controlled Kashmir.  Hostilities ceased 3 weeks
later, following mediation efforts by the United Nations and
friendly nations.  In January 1966, Indian and Pakistani
representatives met in Tashkent, USSR, and agreed to work for a
peaceful settlement of the Kashmir dispute and other differences.
        Following the 1971 crisis in East Pakistan, which led to
the war that ended with the emergence of independent Bangladesh,
President Bhutto and Indian Prime Minister Indira Gandhi met in the
mountain town of Simla, India, in July 1972.  They agreed on the
withdrawal of forces from occupied territories, the determination
of a line control in Kashmir, and settlement of bilateral disputes
through peaceful means.  In 1974, Pakistan and India agreed to
re-establish postal and telecommunications links and measures to
facilitate travel.  After a hiatus of 5 years, trade and diplomatic
relations were restored in 1976.
        Strains in bilateral relations continue over defense and
internal security matters, communal concerns, and economic issues.
India's self-proclaimed "peaceful nuclear explosion" in 1974 led to
great uncertainty in Pakistan, and is generally acknowledged to
have been the impetus for Pakistan's alleged clandestine nuclear
research.  In 1983, the two nations exchanged charges that each was
aiding the other's separatists, i.e., Sikhs in India's (east)
Punjab State and Sindhis in Pakistan's Sindh Province.  In
addition, conflict arose between Indian and Pakistani troops in the
remote Siachin Glacier region of northern Kashmir, while New Delhi
sharpened its criticism  of  what it alleged was Pakistan's
clandestine nuclear weapons program.  Tensions diminished after
Rajiv Gandhi replaced his assassinated mother as Indian Prime
Minister in November 1984 and a group of Sikh hijackers was brought
to trial by Pakistan in March 1985.  In December 1985, President
Zia and Prime Minister Gandhi pledged that neither would launch a
first strike against the other's nuclear facilities. A formal "no
first strike" agreement was signed in January 1991.  High-level
talks began in early 1986 to resolve the Siachin Glacier border
dispute and to improve trade. Bilateral tensions rose again in
early 1990 as Kashmiri militants challenged the authority of the
Indian Government.  Subsequent frequent bilateral meetings on high
levels have helped lay the groundwork for improvement in the
relationship.  These issues, and particularly unrest in
Indian-controlled Kashmir and in India's (east) Punjab State, are
likely to continue to dominate Indo-Pakistani relations.

Afghanistan
        Pakistan played a vital role in supporting Afghan
Resistance fighters following the 1980 Soviet invasion. In the wake
of the Soviet withdrawal from Afghanistan in February 1989,
Pakistan remained an important source of support for the Afghan
Resistance.  More than 3 million Afghan refugees are in Pakistan,
but are returning in increasing numbers. Pakistan, in cooperation
with the world community, undertook a massive relief effort to care
for the refugees.  The United States has provided nearly $500
million in humanitarian assistance for Afghan refugees in Pakistan,
mainly through multilateral organizations.

The Former Soviet Union
        Under military leaders Ayub Khan, Pakistan sought to
improve relations with Moscow; trade and cultural exchanges between
the two countries increased between 1966 and 1971.  With the
beginning of the East Pakistan crisis in March 1971, however,
Soviet criticism of Pakistan's position cooled relations; and many
Pakistanis believed that the August 1971 Indo-Soviet Treaty of
Friendship, Peace and Cooperation encouraged Indian belligerency.
Subsequent Soviet arms sales amounting to billions of dollars on
concessional terms to India--in addition  to all the Soviet arms
sales throughout the 1960s--reinforced this view.
        During the 1980s, tensions increased between the Soviet
Union and Pakistan, because of the latter's key role in organizing
political and material support for the Afghan rebel forces.  As the
Soviet withdrawal neared, the Soviet Government increased its
attempts to intimidate Pakistan.  Changes in the former Soviet
Union will probably lead to improved bilateral relations.

People's Republic of China
        Pakistan recognized the People's Republic of China (PRC) in
1950 and was among the first countries to do so.  Following the
Sino-Indian hostilities of 1962, Pakistan's relations with China
grew much closer, and the two countries have concluded a variety of
agreements and regularly exchange high-level visits.  China has
provided economic, military, and technical assistance to Pakistan.
        Good relations with China have been  essential to
Pakistan's foreign policy.  Pakistan views the PRC as a regional
counterweight to India and the former Soviet Union, and the PRC
strongly supported Pakistan's opposition to Soviet involvement in
Afghanistan.

Iran and the Persian Gulf
        Pakistan has long-standing geopolitical, historical, and
cultural-religious ties with Iran.  The two countries enjoy cordial
relations.
        Despite popular support for Iraq, the Pakistani Government
supported the coalition against Iraq's invasion of Kuwait and sent
11,600 troops to defend Saudi Arabia. Pakistan's relations with
Iran are tempered by its extensive ties to Saudi Arabia and other
Arab Persian Gulf states.  Pakistan provides military personnel to
strengthen Gulf state defenses and to reinforce its own security
interest`s in the area.  Nevertheless, Pakistan pursues an active
diplomatic relationship with Iran.

US-PAKISTAN RELATIONS

        The United States and Pakistan established diplomatic
relations in 1947.  With the US agreement to provide economic and
military aid in 1954 and Pakistan's participation in the Baghdad
Pact/-CENTO and SEATO, relations between the two nations grew
close.  During the 1965 Indo-Pakistani war, however, the United
States suspended military assistance to both sides.  The suspension
of aid affected Pakistan much more severely than it did India and
generated a widespread feeling that the United States was not a
reliable ally.  As time passed, relations gradually improved, and
arms sales were renewed in 1975.
        In November 1979, false reports that the United States had
participated in the seizure of the grand mosque in Mecca led to a
mob attack on the US Embassy in Islamabad.  Despite calls for help,
the slow reaction of police authorities allowed time for the
embassy to be burned.  Six persons died, four of them US nationals.
The American cultural centers in Rawalpindi and Lahore also were
destroyed.  Despite an apology from the Pakistan Government, and
its agreement to pay for reconstruction of the Embassy, relations
between the countries reached an all-time low.  At the time of the
incident, US assistance to Pakistan also had been suspended because
of 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 bilateral
relationship entered a new phase.  The United States and Pakistan
agreed on a multi-year, $3.2-billion military and economic aid
program aimed at helping Pakistan deal with the heightened threat
to security in the region and its economic development problems.
        Citing overriding national security concerns and accepting
Pakistan's assurances that it was not seeking to construct a
nuclear weapon, Congress waived restrictions (Symington amendment)
on aid 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.  Implementation of this program is
contingent upon year-by-year congressional approval, a renewal of
the current Symington amendment waiver, and annual certification by
the President that Pakistan does not possess a nuclear explosive
device (the Pressler amendment). As of October 1, 1990, the US
suspended all forms of economic and military assistance to Pakistan
because of concerns about the development of Pakistan's nuclear
program.  Talks continue between the two sides.

Principal US Officials

Ambassador--Nicholas Platt
Deputy Chief of Mission--A. Elizabeth Jones
Defense Representative--Brig. Gen. John Howard
Director, USAID Mission--James Norris
Counselor for Political Affairs--Edward F. Fugit
Counselor for Economic Affairs--Lawrence Benedict
Public Affairs Officer--William R. Lenderking
Consul--Karen M. Stanton
Consul General, Karachi--Richard Faulk
Consul General, Lahore--Laurie Johnston
Consul, Peshawar--Richard Smyth
        The US Embassy is located at the Diplomatic Enclave, Ramna
5, Islamabad (tel. [92]-(51)-826161 through 79; telex
82-5-864).

Travel Notes
        Visas must be obtained before traveling to Pakistan.  The
land border with India is open to travelers at Wagah (between
Lahore and Amritsar) only on certain days of the week.  India and
Pakistan require that all cars entering at the border be covered by
an international Carnet de Passage.  Four-wheel drive vehicles are
recommended for some highways such as the Karakoram Highway,
connecting Pakistan with China through the Khunjerab Pass.
Travelers on this route must obtain visas and make arrangements
through local authorities.  Travelers should note travel
advisories, especially warnings about travel in rural Sindh.