May 31, 2003	Saturday	Rabi-ul-Awwal 28, 1424

KARACHI, May 30: Moves by Islamic parties to impose strict Shariah law in NWFP are likely to heighten the country’s political risk for international investors.

Representatives of multinational companies and western diplomats in Pakistan fear the six-member alliance will try to adopt hardline policies of the former Taliban regime in neighbouring Afghanistan.

And this, they say, would quickly cast a pall on Pakistan’s slowly improving investment climate. The development comes at an awkward time for President Pervez Musharraf, who is already embroiled in a tussle with the MMA over changes he has made to the constitution in recent years to strengthen his grip on power.

Last week, Islamic hard-liners in the Peshawar tore down billboards showing women in advertisements for western products, branding them immoral. “We have started removing all our billboards from NWFP and it’s their loss not ours,” said a Pakistani executive of a foreign consumer group, referring to the Islamic Alliance’s stronghold.

The NWFP has historically been an important trade route to Central Asia through landlocked Afghanistan. But cross-border trade fell sharply in the aftermath of Sept 11 and US-led war on Afghanistan.

Analysts are concerned that a drift toward a more hardline brand of Islam even in a remote part of the country could undermine efforts to attract western capital to Pakistan.

However, KASB’s Arshad said Pakistan’s broad economy was unlikely to suffer much from a slowdown in the NWFP from the imposition of Shariah as the region contributes only a small percentage to the country’s gross domestic product and foreign investment there is weak.— Dow Jones Newswires