Pakistan: After The Himalayas Quake

The disaster may ease India-Pakistan tensions

Pakistan is still reeling from the earthquake that hit the Himalayas in early October. On Oct. 19, authorities said the death toll had risen to nearly 48,000, while 60,000 have been injured and 3 million left homeless in the Northwest Frontier Province and Kashmir. Despite the devastation, President Pervez Musharraf said on Oct. 18 that the area would be rebuilt for a total estimated cost of $5 billion. That could put construction, cement, and related industries "into high gear over the next 12 months," says Nadeem Naqvi, CEO of AKD Securities, a Karachi brokerage. Because the quake didn't hit industrial or agricultural centers, the economy is still expected to grow 7% this year.

Meanwhile, there are signs the disaster may help resolve the long-standing dispute over Kashmir, which has sparked three Indian-Pakistan wars. Despite continued violence, including the assassination of an Indian official in Kashmir on Oct. 18, contact between the two sides is picking up. For the first time, Pakistani and Indian mobile-phone companies have been allowed to open up communications for Kashmiris. And the Line of Control through Kashmir is expected to open for citizens to cross. Kashmiris hope the moves will lead to the declaration of an independent state. At the least, talks between Musharraf and Indian Prime Minister Manmohan Singh stand a chance of making progress.

By Naween A. Mangi in Karachi

Edited by Rose Brady

    Before it's here, it's on the Bloomberg Terminal.