Economic Worries Trump Security Fears in Pakistan

Bombs explode and a state of emergency is imposed. Judges are sacked, lawyers protest en masse, and the country's most popular politician is assassinated. But if you ask Pakistani Jamila Bibi what she's worried about, she doesn't cite terrorism or political instability. She's worried, she says, because she has no customers.

"Oil is so expensive, flour is so expensive, I can't sell anything. We are under great distress," the 51-year-old widow says at a weekly market in Islamabad, standing under the bras she used to sell with ease. "I've taken a loan out to educate and feed my grandchildren. I don't know what to do. Everything has become so expensive, I'm left with nothing."

There are many things that people fear in this troubled country. Bombs have been placed under fruit carts in markets. Mosques have been attacked. Residents avoid standing next to police or soldiers, the most common target.

But if you want to get a sense of what preoccupies people on a daily basis, on an hourly basis, ask them about the price of bread. Ask them about the price of flour, if they can even find flour.

"The flour was very expensive," says Mohammed Nazir Gul, who managed to locate one of the rare government stores in Islamabad with a few bags left. "People come from miles and stand in line. Thank God there's no line here."

A severe flour shortage first hit Pakistan in December. Then there was the unprecedented rolling blackouts, or "loadshedding," as it's known here, implemented for the first time during the winter months. Then there was the shortage of CNG in the big cities. Then there was the inflation, some of the worst of any country in the region: Over the last year the price of clothes rose 9 percent while food jumped 12 percent. And from November to December, the price of flour rose 20 percent.

Day in and day out, there is no good news for the Pakistani middle class. But despite the media's focus on terrorism, it is economic woes, perhaps more than people's physical fears, that are the most important going into next month's election.

It didn't always used to be like this. A few years ago the story of the Pakistan's economy was one of promise and profits. Annual economic growth averaged more than 7 percent from 2002 to 2007. The stock market soared 40 percent last year. And foreign investment flowed into the country, rising almost 50 percent to $5.1 billion as of last June.

You can find that promise in the offices of Foundation Securities, an investment bank in Islamabad whose windows afford some of the best views of the mountains that ring this city. In the main room, couches and tea and magazines are set up around a huge TV screen that updates every few seconds. People come here to watch their stocks rise and fall, minute by minute, rupee by rupee.

"The Pakistani economy has done tremendously well the last four or five years. Everybody has made money," says Azhar Hussain, Foundation Securities' deputy manager. "Post -9/11, Pakistan was seen to be a country which was toeing the line of the West, and very acceptable. So a lot of money came in. And a lot of money came in from different places."

Money from Pakistanis returning home, money from Pakistanis who profited from stocks or real estate. And foreign money from the Middle East, from Singapore, from Europe and, more than any other country, from the U.S.

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