Prospects for Pakistan

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Prospects for Pakistan
Jonathan Paris

January 2010

Prospects for Pakistan
Jonathan Paris Legatum Institute

Copyright © 2010 Legatum Limited All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical including photocopying, recording or any information storage or retrieval system, without the prior written permission of the copyright holder. Please direct all enquiries to the publishers. Legatum Institute 11 Charles Street, Mayfair London, W1J 5DW United Kingdom T +44 (0)20 7148 5400 F +44 (0)20 7148 5401 www.li.com info@li.com

CoNTeNTS
Preface executive Summary Introduction Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Conclusion economy Civil-Military Issues Trends In Islamism The Future of Pashtun Nationalism The Future of The Pakistan Taliban The India-Pakistan Relationship China-Pakistan Relations US-Pakistan Relations 4 5 11 13 21 27 34 39 45 52 54 60

PReFACe

The author wishes to thank Stephen P. Cohen (Brookings Institute), Shuja Nawaz (Atlantic Council), Stephen Tankel (King’s College London) and Joshua White (SAIS) in Washington, Nigel Inkster (IISS), eric Kaufmann (Birkbeck) and Anatol Lieven (King’s College London and New America Foundation) in London, and David Washbrook at Trinity College, Cambridge, for their comments and for providing a helpful framework for understanding the coming challenges and opportunities for Pakistan. The author would especially like to extend his gratitude to William Inboden, Senior Vice President of Legatum Institute, who asked the author to prepare this Report, for patiently mentoring the author with supportive and critical feedback throughout these past 16 months, and to Claudia Schwartz, Research Assistant at Legatum, for helping turn the manuscript into a printed Report. Jonathan Paris1

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Jonathan S. Paris is a London-based political analyst and Non-resident Senior Fellow with the Atlantic Council of the United States’ South Asia Center. He is also an Adjunct Fellow at Legatum Institute and an Associate Fellow with the International Centre for the Study of Radicalisation (ICSR) at King’s College London. He is a visiting lecturer at the University of Buckingham Centre for Security and Intelligence Studies (BUCSIS). Before moving to London in 2001, he was a Fellow at the Council on Foreign Relations in New York, where he worked on the Middle east peace process and was deputy to Paul A. Volcker, Chairman of the Council’s Middle east economic Strategy Group. At the Council, he co-edited the first book on Indonesia’s democratic transition, The Politics of Post-Suharto Indonesia (Brookings/CFR 1999). A Senior Associate Member at St. Antony’s College, oxford from 2004-2005, he is a graduate of Yale University and Stanford Law School.

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eXeCUTIVe SUMMARY

This Report analyses the prospects for Pakistan over a one to three year time horizon. It looks at economic, political, security, and bilateral issues. There are three possible scenarios for Pakistan over this relatively short time horizon; Pakistan probably will avoid becoming a “failed state” and is unlikely to find a “pathway to success” but, as Pakistan confronts a myriad of vexing challenges, the most likely scenario is that it will “muddle through”.

1. economy
Looking at the economy optimistically, in just over 20 years, Pakistan will surpass Indonesia and become the fifth most populous country and the one with the most Muslims. Its youth bulge provides it with a baby boom which, if educated and employed, could provide its economy with a demographic dividend long after the equivalent bulges in China and India have aged and retired. Pakistan has an opportunity to leverage its domestic consumer market to attract multinationals and build up competitive economies of scale in industries like food, electronics, autos and engineering for the export market. Peace with India would turn...
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