Time to weigh the implications

Islamabad: Leaders of the ruling coalition on Tuesday set about seeking a replacement for President Pervez Musharraf but it would be worthwhile to assess some of the political, economic and diplomatic implications of his resignation.

• Opposition to Musharraf has bonded rival parties in the coalition government. His departure could see them drift apart.
• Since Musharraf's resignation, US President George W. Bush has said he looks forward to working with Pakistan on the economic, political and security challenges it faces. Washington can be expected to press the coalition government to take a firm line to stop militancy, in particular attacks into Afghanistan.
• India enjoyed some of its best diplomatic relations with Pakistan in decades under Musharraf. While the new government is committed to the peace process with India, launched under Musharraf in 2004, India's fear is that a weak civilian government in Islamabad will not have the same muscle Musharraf had over the army and the powerful military spy agency, which India suspects has a hand in most attacks on its soil.
• The government has vowed to turn its attention to economic problems after Musharraf leaves. Inflation is at its highest in years, and trade and fiscal deficits are widening. High oil prices have depleted foreign reserves while the rupee has lost about a quarter of its value this year.
• An end to the uncertainty over Musharraf eased investor worries and the main stock index and rupee gained on Monday. However, the markets were off early highs yesterday amid doubts about the new government's ability to deal with the economic challenges facing the country.