Pakistan

Pakistan is a country in Southern Asia, bordering the Arabian Sea, between India on the east, Iran and Afghanistan on the west and China in the north.

The separation in 1947 of British India into the Muslim state of Pakistan (with two sections West and East) and largely Hindu India was never satisfactorily resolved, and India and Pakistan fought two wars - in 1947-48 and 1965 - over the disputed Kashmir territory. A third war between these countries in 1971 - in which India capitalized on Islamabad's marginalization of Bengalis in Pakistani politics - resulted in East Pakistan becoming the separate nation of Bangladesh. In response to Indian nuclear weapons testing, Pakistan conducted its own tests in 1998. The dispute over the state of Kashmir is ongoing, but discussions and confidence-building measures have led to decreased tensions since 2002.

Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes, low levels of foreign investment, and a costly, ongoing confrontation with neighboring India. However, International Monetary Fund-approved government policies, bolstered by generous foreign assistance and renewed access to global markets since 2001, have generated solid macroeconomic recovery the last five years. The government has made substantial macroeconomic reforms since 2000, most notably privatizing the banking sector. Poverty levels have decreased by 10 percent since 2001, and Islamabad has steadily raised development spending in recent years.