ABSTRACT
Pakistan’s future has never seemed more uncertain than it appeared at the start of 2013, the time of writing. The country faced difficulties on many fronts. The economy was weakening; it appeared highly unlikely that the governing coalition in Islamabad would be able to take the steps to bring growth back to the level needed to absorb the two million additional workers who join the workforce every year. The International Monetary Fund (IMF), in its Article IV consultations with Islamabad conducted in the spring of 2012, estimated that the economy needed to expand by 7% a year to keep unemployment from increasing. It forecast a rate of increase of at 3.4% in 2012–13 1 although, as discussed below, Hafeez Sheikh, the finance minister, expected a higher rate of growth. The country’s external situation was weakening as it prepared to service the large amount of accumulated debt, in particular the amount owed to the IMF. There was no doubt that Pakistan needed external support, particularly from the USA, but relations with the USA remained patchy.
