Pakistan

Relations between the U. S. and Pakistan have been strained over nuclear issues and the ouster of pro-Western Prime Minister Benazir Bhutto last year. But now they're on the upswing. Conservative, Islamic Pakistan is following Iran's lead in shifting toward a more market-oriented economy (page 46 18 ). In a dramatic move, Pakistan's Prime Minister Nawaz Sharif on May 30 announced plans to privatize 150 state enterprises. The drive is accompanied by an effort to strengthen Pakistan's capital markets. International Finance Corp., an affiliate of the World Bank, is lead-ing the way with equity investments.The key obstacle to improved relations is U. S. worry over Islamabad's nuclear plans. Last October, the Administration suspended $237.8 million in military and economic aid because Pakistan's leaders failed to give assurances that they weren't building a nuclear bomb. To resolve the deadlock, Sharif is dispatching a high-level delegation to Washington for talks on June 11 with senior U. S. officials.

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