Pakistan's current political crisis has caused considerable harm to equity prices across the Karachi stock exchange with the representative KSE-100 index taking the hit this month.

But as a new interim administration took oath in Islamabad, policy makers were quick to claim that the basic parameters of the economy remain fundamentally strong.

Even if the official view was accepted for the moment, there is no assurance of long term economic success till the political crisis, which has engulfed Pakistan in general and President General Pervez Musharraf in particular, begins to subside.

For long, Pakistan's economy remained in slumber and began recovering just in the past five years, prompted mainly by generous support from the US as the country joined the US-led war on terror.

There can be a denial of a close link between political trends and economic direction in the case of a country like Pakistan. For too long, Pakistan's successive governments have tried hard to reform the economy but to little effect when compared with the success achieved in recent years.

To the extent that the political trends can be read accurately, Pakistan's present-day rulers, most notably Musharraf, repeatedly assert the view that Pakistan's economic outlook will be jeopardised should there be a change of government in Islamabad. In other words, the argument from the government clearly goes like this; "Unless we remain in power, the economy is doomed to return to its yesteryear outlook".

There can be no bigger fallacy than the view of the economy heard today from Pakistan's leaders. The fact that there has been a recovery in recent years must present reason for optimism, with or without Musharraf left in charge of the country.

If the president is indeed forced out of power as many predict in Pakistan today, the recovery seen during his tenure must outlive his political life. Parameters such as a strong recovery in liquid foreign currency reserves or indeed fast improving economic growth rates must ultimately stay the course, fuelled by the momentum gained in recent years.

A new government may prove to be more committed on seizing fresh initiatives for a new future, and addressing the challenges left unattended under Musharraf's watch. Notwithstanding the official claims of a sharp economic recovery, there are many aspects of the economy which remain unattended.

While the government claims to have laid the basis for progressive economic change, almost one third of Pakistan's population of 165 million remains below the poverty line. Even judging by the government's own estimates on this count of just a quarter of the population being below the poverty line, does nothing to reduce the sense of alarm surrounding the economy.

In the ultimate analysis, two related points have to be emphasised. The extent to which the Pakistani economy has emerged fully from a long period of slumber is a questionable assumption. While there has certain been an upturn during Musharraf's tenure, there are still many profound challenges faced by the Pakistani economy. The recent political crisis has demonstrated that there are clear limits on the extent to which an economic recovery can be celebrated as a sign of a permanent upturn.