Download The Economist - 17 October 2001 by The Economist Group PDF

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The European Union has already assured Pakistan of such additional access, which will boost Pakistan's biggest industry once nervousness and recession eventually start to subside. Pakistan, which has some $38 billion of foreign debt, is expecting the most significant boost to come from new loans and easier terms on old ones. The IMF is soon expected to announce a large “poverty-reduction and growth” loan, with conditions relaxed somewhat to take account of the crisis. That is to be followed in December by the restructuring of at least part of the $12 billion owed to foreign governments.

Not only have predictions of an early split been confounded, but the party has also done reasonably well in the local elections held over the past year. It has lost some governorships and mayors, but maintained an average of over 40% of the votes—more than in the presidential race. Not until there is a new face at the helm can the party set a course for recapturing the presidency. But a leadership contest will also polarise the party, between the old guard and the modernisers. It is then that the losers may split off.

Many supporters were outraged by Labor's failure to oppose Mr Howard's asylum-seeker war and defected to the Greens, which doubled their vote at the election. Labor has signalled that it will change leaders again, to Simon Crean, aged 52, an economist, lawyer and former union leader, and install Jenny Macklin, a shrewd relative newcomer, as its first woman deputy leader. Some party officials believe Labor will also have to broaden its membership, shed the remaining union control over its affairs and sell its policies harder if it is to break the coalition's hold on power.

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