2008: Pakistan economic events

January In the aftermath of Bhutto’s death

Following a three-day shut-down, the benchmark index, the KSE100 index, of the Karachi Stock Exchange fell 4.7 percent. The rupee fell to its lowest level against the U.S. dollar since October 2001. The stock exchange has a history of recovering after political unrest. The Pakistan Railways suffered losses of PKR 12.3 billion as a direct result of riots following the assassination. 63 railway stations, 149 bogies, and 29 locomotives were damaged within two days of Bhutto’s death. In the first four days after the assassination, Karachi suffered losses of $1 billion. By the fifth day, the cost of country wide violence amounted to 8% of the GDP.  

February: Scotland Yard detectives investigating the death of former PM of Pakistan Benazir Bhutto say that she died from the effect of a bomb blast not gunfire.

* Pakistani censors cause most of the Earth’s Internet users to lose access to the Internet site YouTube for up to two hours.


March: Pakistan’s Election Commission announces the completed results of parliamentary election.  The new Parliament convenes for the first time after the 2008 general election.

* The Parliament of Pakistan elects Fahmida Mirza as its first female speaker.

* Yusuf Raza Gillani of the Pakistan Peoples Party is elected Prime Minister of Pakistan by the National Assembly.


April: The United States Department of State’s annual report on terrorism states that al-Qaeda “has reconstituted some of its pre-9/11 operational capabilities” in the Federally Administered Tribal Areas of Pakistan.


May: Pakistan’s two main coalition leaders, Asif Ali Zardari and Nawaz Sharif meet with U.S. Assistant Secretary of State Richard Boucher in London to discuss the removal of judges by President Pervez Musharraf, but fail to reach an agreement.


June: The United States Secretary of Defense Robert Gates invites Pakistan and Afghanistan to participate in an investigation of the Gora Prai airstrike.

* The President of Afghanistan Hamid Karzai warns the Taliban that he will send forces into Pakistan in hot pursuit of militants.

* Pakistan commences a military operation against Taliban militants in the Khyber Agency near Peshawar.


July: The Prime Minister of Pakistan Yousaf Raza Gillani denies any involvement in the 2008 Indian embassy bombing in Kabul. The Government of Afghanistan has hinted that it believes that Pakistan’s Inter-Services Intelligence had some involvement.

* A United States Predator drone launches a missile strike on a Pakistani madrassa killing six people reportedly including al-Qaeda member.


August: Members of the South Asian Association for Regional Cooperation meet to discuss trade, terrorism, and poverty. Tensions between India and Pakistan threaten to overshadow the eight-nation gathering.

* Pakistani President Pervez Musharraf, announces his resignation as President. Indirect presidential elections will be held within 30 days.


September: The Electoral College of Pakistan elects Asif Ali Zardari of the Pakistan People’s Party as the next President of Pakistan.

* President George W. Bush is reported to have authorized United States special forces to conduct operations against insurgents inside Pakistan without seeking approval from the Government of Pakistan.

October: Pakistani president Asif Ali Zardari acknowledges his government’s consent to US air strikes in Pakistan and says India has never been a threat.

* A trade route opens within Pakistan-administered Kashmir and India.


November: A strong aftershock measuring 5.0 on the Richter magnitude scale hits southwestern Pakistan three days after it was struck by a 6.4 magnitude earthquake.


December: Indian Prime Minister Manmohan Singh denies reports of possible war with Pakistan over the November terrorist attacks in Mumbai.

* President of Pakistan Asif Ali Zardari accepts that “non-state actors” exist in the country and vows to root out terrorism there.

As world leaders seek answers to the global financial crisis, take a closer look at the key economic events of the year.

* The crisis in world financial markets has its roots in declining home values in the US real estate market which began in late 2006 and led to a wave of foreclosures and defaults on home loans.

* The loans, many to borrowers with poor credit, were bundled into assets that began to way heavily on banks’ balance sheets around the world.

* Earlier efforts to assist homeowners, and the sale of several major financial institutions did little to stem the flood, and the international crisis rapidly expanded after the fall of financial giant Lehman Brothers in September.

* Banks worldwide may be forced to write down a total of $1.4 trillion in assets by the end of the year, according to the International Monetary Fund. Here is a chronology of major economic events this year:

January: Bank of America acquires Countrywide Financial, the biggest US mortgage lender. US Federal Reserve slashes interest rates twice.

March: On the verge of collapse and under pressure by the Fed, Bear Stearns is forced to accept a buyout by US investment bank JP Morgan Chase. The deal is backed by Fed loans of $30 billion.

*        In Germany, Deutsche Bank reports a loss of 141 million euros for the first quarter of 2008, its first quarterly loss in five years. Fed spearheads coordinated push by world central banks to bolster global economic confidence by announcing moves to pump $200-billion liquidity into markets.

*        US frees up another $200 bn to back troubled Fannie Mae and Freddie Mac.

April: G7 ministers agree to new wave of financial regulation to combat protracted financial crisis.

July: California mortgage lender IndyMac collapses. US Treasury, Fed move to guarantee debts of Fannie, Freddie. US Congress gives final passage to multi-billion-dollar program to address mortgage and foreclosure crisis.

*        Spain’s largest property developer, Martinsa-Fadesa, declares insolvency.

September: 07 – US govt seizes control of Fannie, Freddie in $200-billion bail-out.

15th – Lehman Brothers investment bank declares $600-billion bankruptcy. Merrill Lynch acquired by Bank of America.

17th – US bails out AIG insurance giant for $85 billion.

19th – White House requests $700-billion bail-out plan from Congress for all financial firms with bad mortgage securities to free up tightening credit flow.

22th – Last two standing investment banks, Morgan Stanley and Goldman Sachs, convert to bank holding companies.

26th – Feds seize Washington Mutual in largest-ever US bank failure.

29th – US House of Representatives rejects mammoth $700-bn bail-out plan.

*        Governmental bail-outs announced for key banks in Britain, the Benelux and Germany as well as a state takeover of a bank in Iceland.

October 1: US Senate adopts massive bail-out plan, adding sweeteners to get House acceptance.

3rd – Wells Fargo bank and the fourth-largest US bank Wachovia Corp announce merger.

*        The largest govt intervention in capital markets in US history clears the
US House of Representatives, becoming law with signature by President Bush.

11th – G7 finance ministers gather for talks in Washington, agree to use all available tools to address crisis.

15th – European Union leaders guarantee inter-bank lending.

29th – US Federal Reserve slashes interest rates by 0.5 percentage points to 1 percent, the lowest level since June 2004.

30th – Japan announces 26.9-trillion-yen ($276-billion) stimulus package, including 2 trillion yen in financial assistance for all households to jump-start consumption and up to 6 million yen in tax breaks for housing loans for 10 years.

*        International Monetary Fund approves a new programme to provide emergency loans to countries facing serious cash shortages.

November 3: Euro zone finance ministers meet, rule out stimulus package.

4th – Economic woes help propel Democrat Barack Obama to presidency in US elections.

6th – The European Central Bank and Bank of England announce coordinated rate cut. IMF predicts global recession for 2009.

8th – G20 finance ministers meeting in Sao Paulo.

9th – China announces 4-trillion-yuan ($588-bn) economic stimulus package.

10th - US government invest an additional $40 billion in AIG in exchange for preferred stock in the insurer.

15th – Leaders of G20 nations to gather in Washington to discuss world financial situation. 



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