Why the Cook Islands fears rich-country status

MOST political leaders play up their country’s economic performance. Those on the Cook Islands, a collection of 15 islets spread over 2m square kilometres in the South Pacific, are doing the opposite.

At issue is whether the country of 17,000 people has become wealthy enough to warrant a reassignment by the OECD, a club of mostly rich countries, from upper middle-income to high-income status. The rub is that “graduation” would make it more difficult for the country to claim it qualifies for aid. This amounted to NZ$33m ($22m) in 2016, or just under 8% of the islands’ GDP. However, New Zealand, the biggest donor country to date, has said it will continue to give an unspecified amount of financial assistance if the Cook Islands graduates. 

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Henry Puna, the prime minister, has acknowledged that achieving high-income status would be a source of national pride. It would be a first for a Pacific-island state. But he has warned that “premature graduation could have serious implications” for his country. The finance ministry downplays the islands’ impressive average annual growth of around 5% between 2014 and 2016. It noted in a recent press release that “economic growth may not have been as strong as we thought”.  

The OECD sorts countries into groups based on their gross national income (GNI) per person. Countries that exceed the high-income threshold, as defined by the World Bank, for three consecutive years are promoted to the list of developed countries. (In 2016 the high-income threshold was $12,236.) The Cook Islands, however, does not produce data for GNI, only for GDP, which does not include net income from abroad. So when the OECD hinted last year that the islands appeared ready for graduation, officials resisted, arguing that they should be granted extra time to compile their own GNI statistics. The OECD set a deadline of early 2019.

 The Cook Islands has good reason to worry that the good times may not last. It has lost 12% of its population in the past 12 years, as young people seek greener pastures in New Zealand. (Cook Islanders hold New Zealand citizenship, thanks to their country’s “free association” arrangement with the former colonial master.) Spending by tourists accounts for over 60% of the islands’ economy. Around 80% of the visitors (161,000 of them last year) are from New Zealand and Australia. A recession in one of those countries, or a natural disaster at home, would be an enormous economic blow to the Cook Islands.  

Further complicating matters, the Cook Islands, after suffering the effects of profligacy in the mid-1990s, has since imposed on itself some of the world’s toughest fiscal constraints. These state that public debt be kept under 35% of GDP even as tax revenue is capped at 25% of GDP. Yet tax revenue is projected to breach the ceiling this year, and the debt-to-GDP ratio is inching closer to the upper bound. So raising taxes or issuing bonds are unlikely to be realistic alternatives if foreign aid is cut. 

Given these challenges, and the reliance of the OECD on countries’ own calculations of their GNI, Cook Islands officials may want to cook the books to avoid crossing the high-income threshold. But Mark Brown, the finance minister, dismisses this possibility. He says that massaging the GNI data “would not be acceptable to the OECD, nor do we believe that it would be in the best interests of the Cook Islands.”

Mr Brown concedes, however, that “a more gradual timeline, of say the early 2020s”, would be preferable for joining the ranks of the rich. That would allow more time for the economy to achieve “self-sufficiency”. One bright spot is the country’s vast seabed mineral deposits. The Cook Islands is reckoned to have up to a sixth of the world’s reserves of cobalt, an element used in batteries and jet engines. But large-scale mining is still a long way off. Well before then the OECD will have made a decision. According to an OECD spokesperson, if a country “meets the criteria for graduation, it cannot refuse graduation.” 

Violence and claims of election-rigging overshadow Pakistan’s election

“FOR the first time in our history, fair elections are going to be held,” insisted Fawad Chaudhry, a spokesman for the opposition Pakistan Tehreek-e-Insaf (PTI) party, this week. Unfortunately, this view is not universally held. The national and state elections on July 25th, in which 100m people are registered to vote, should mark a further stage in the country’s progress towards democracy, for the transfer of power thereafter will be only the second from one civilian government to another in the country’s seven decades of coup-studded history. But the poll takes place amid accusations that the powerful military establishment is tilting the field in favour of the PTI and its leader, a former cricket star, Imran Khan (pictured, on the flag).

There is another dark cloud over the campaign: violence. On July 13th a suicide-bomber, alleged to have links with Islamic State, killed 149 people in an attack on a rally in Mastung, a town in the south-western province of Balochistan. It was the country’s second-deadliest terrorist incident and a reminder that, despite a steep fall in the number of terrorist incidents in recent years, the menace remains.

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The bloodshed occurred on the day that the former prime minister, Nawaz Sharif, flew from Britain to Pakistan to begin serving a ten-year prison term for corruption—a punishment that his supporters allege was orchestrated by the army. Reflecting the poisonous mood of the campaign, Mr Khan insinuated that Mr Sharif’s party, the ruling Pakistan Muslim League-Nawaz (PML-N), was somehow responsible for the bloodshed in Mastung. “Beginning to wonder why whenever Nawaz Sharif is in trouble, there is increasing tension along Pakistan’s borders and a rise in terrorist attacks. Is it a mere coincidence?” Mr Khan asked in a tweet.

Mr Khan’s party has at least an even chance of winning, and he, at the age of 65, of becoming prime minister. What a change from the years leading up to the election in 2013, when the PTI had only one seat in parliament (Mr Khan’s own). Since then his promise of a naya (new), corruption-free Pakistan has enthralled young and middle-class voters. In 2013, in a poll deemed fair by international observers, the PTI took 34 seats in the 342-seat legislature, breaking the duopoly of the Pakistan Peoples Party (PPP), then in power, and the PML-N. Mr Khan is credited with boosting turnout to a 30-year high of 55%.

How close he is to the generals is hard to gauge. Many Pakistanis still praise the “Charter for Democracy”, signed in 2006 by the PPP and PML-N, which appeared to put an end to years of competition between the two parties for the army’s favour. The document pledges that “no party shall solicit support of the military to come into power”. Mr Khan, however, declared it a sham. Within a year of the election in 2013, he was leading protests against the victorious PML-N, accusing it of having rigged the vote. Now the PML-N accuses Mr Khan of having played into the army’s hands with his successful request for the Supreme Court to disqualify Mr Sharif as prime minister because of his undeclared assets in London (it did so a year ago). The army had been chafing at Mr Sharif’s attempts to assert civilian supremacy.

The party’s spin

The PTI’s strategy in this election campaign is similar to the one it adopted five years ago. It emphasises Mr Khan’s celebrity as the “captain” who brought home the Cricket World Cup of 1992, as well as talking up his philanthropy. Mr Khan has established three world-class cancer hospitals in Pakistan. In addition, the PTI promises to secure the return from abroad of $2.3bn that Mr Khan claims was looted by the Sharif family from public coffers.

The Oxford-educated ex-cricketer’s tirades against corruption enjoy much appeal among educated, well-heeled Pakistanis. But Umair Javed, a columnist, says that Mr Khan’s attempts at populism are “just not popular enough” among those who are less well off. Ali Cheema, an academic, says his studies have found that ordinary Pakistanis are more interested in the economy, employment and public services than in Mr Khan’s anti-corruption platform. In these areas, the PML-N enjoys a good record. It has fulfilled its manifesto pledge to end electricity shortages. Its splurge of spending on infrastructure is popular (Mr Khan’s accusations that the PML-N has built too much fall flat). Since 2013 Mr Khan’s party has ruled effectively in the northern province of Khyber Pakhtunkhwa. But its success there may not be sufficient to persuade many voters to desert the PML-N in the national polls.

So the PTI has focused on persuading PML-N legislators to switch sides and bring their voters with them. Mr Khan says that without “electables”, as such weathervane politicians are known, “you cannot contest the election”. Around a third of the PTI’s candidates are recent entrants from other parties. They have been wooed with little regard to their backgrounds. Some are precisely the kind of sleazy politician that Mr Khan has railed against. Opinion polls suggest the PTI is neck-and-neck with the PML-N, says Haris Gazdar, an academic. But the rush of strong candidates to the PTI may suggest that the political elite is putting its money on Mr Khan.

One reason for the defections may be pressure from the army. Several PML-N politicians have publicly claimed in recent weeks that they were pushed by Inter-Services Intelligence, an army-dominated agency, to change their affiliation. Mr Khan denies that the army is supporting him, but says it is the “only institution” that functions in Pakistan. Some of his supporters believe the army is influential. It is playing “a big role” in the election, says Zeeshan Haider, a PTI activist. “They will decide what set-up to bring in Pakistan.” The army denies all such allegations.

By returning to serve a sentence that he attributes to an army conspiracy, Mr Sharif has tried to persuade voters that the election is a choice between democracy (supposedly represented by his party) and military rule with the PTI as its front. On board Etihad Flight 243 to Lahore, the capital of Punjab province and his home town, he told The Economist that his battle with the “establishment”—the army, in other words—was “heading to its peak”. The authorities certainly fear as much. As Mr Sharif prepared to head home, almost 300 PML-N activists were detained to prevent them stirring up trouble. Around 10,000 policemen were deployed to block a procession led by his brother, Shahbaz, a former chief minister of Punjab, from reaching the airport. There Nawaz was transferred to another flight that took him to a prison near Islamabad. Shahbaz has since tried to mollify the army. In an interview with the Financial Times, he vowed to consult the army, when needed, should the PML-N win.

Fears that these elections may not be fair are justified. The work of a 100-strong EU monitoring team has been mysteriously obstructed. For the first time in four elections, the EU observers were able to start their work only a week before the vote. Previously they had started more than a month in advance. The army has also been more visible this time. In 2013, when terrorism was a bigger problem, it deployed 70,000 soldiers to polling stations. There will be 370,000 of them on July 25th. The Election Commission of Pakistan, which oversees the vote, has granted army officers the power of magistrates. This will give them control over proceedings in polling stations. The Human Rights Commission of Pakistan, a respected NGO, complained recently of “unabashed attempts to manipulate the outcome” of the vote.

If there is a hung parliament, which is likely, the PTI may be able to form a government with the support of smaller religious parties and independent legislators. The party may even have to approach its old foe, the PPP, which these days has little support outside the southern province of Sindh. That would require Mr Khan to swallow his words about not joining hands with the PPP’s chairman, Asif Ali Zardari. He has accused Mr Zardari, who was president between 2008 and 2013, of corruption. But the two parties did team up against the PML-N in senate elections in March. Mr Khan has proved flexible in his pursuit of power.

The idea of Eurasia is once again the subject of geopolitics

OH, EAST is East, and West is West, and never the twain shall meet. Perhaps that was true when an Iron Curtain ran down the middle of Europe, and Mao Zedong’s China had turned disastrously inward. But now? This week leaders of the European Union and China met at a summit in Beijing to praise “EU-China connectivity”. It is more than an empty phrase, even if European leaders, distracted by political and migrant crises at home, are less clear-sighted about its implications than are their Chinese counterparts. China has hugely ambitious plans to connect the commercial worlds of Europe and East Asia via infrastructure links that will knit the vast—and till now seemingly inchoate—land mass of Eurasia together. But Chinese efforts are only the most notable of many modernising impulses that are beginning to mesh Eurasia into something resembling a whole.

In a stack of recent books and papers, a growing number of strategists argue that the emergence of a cohering Eurasia is the key feature of a new world order that is taking shape. In truth, Eurasia never went away. Nor are musings on its significance especially new. Over a century ago Halford Mackinder, a founding father of geopolitics, placed Eurasia at the centre of world affairs. In his so-called “heartland theory”, he reasoned that whoever controlled the geographic core of Eurasia could rule the world.

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The most original case for Eurasia having new meaning is made by Robert Kaplan in his new book, “The Return of Marco Polo’s World”. Mr Kaplan, an American journalist and strategist, has a long fascination with how geography shapes destiny. He argues that Eurasia’s new connectivity in roads, railways, gas pipelines and fibre-optic cables means that the old regional categorisations of, say, Central, East and South Asia have ever less meaning as geopolitical concepts. The primacy of nation-states in those regions is also fading. Rather, the interplay of globalisation, technology and geography is leading “the Eurasian supercontinent to become…one fluid and comprehensible unit. Eurasia simply has meaning in the way that it didn’t used to.”

So far, so relatively uncontentious. But Mr Kaplan draws a couple of striking conclusions. First, he argues that, in a land mass historically dominated by China, Russia, Persia (modern-day Iran) and Turkey, a half-hidden tradition of empire is striking back. Nowhere is that more evident than with China and its Belt and Road Initiative, which uses infrastructure as a weapon for neocolonial domination. But other historical empires are attempting to make themselves felt too—think of Russia with its Eurasian Economic Union. These new empires don’t call themselves such. But they act with an imperial mindset.

It is a world that Marco Polo, who travelled from Europe to Mongol-ruled China in the 13th century, would recognise—as Mr Kaplan’s title implies. China’s grand strategy today acknowledges that trade is a better weapon than the sword—just like the Pax Mongolica that then held sway across multicultural Eurasia.

Now, as then, risks live side by side with the potential for wealth creation. Connectivity, Mr Kaplan says, “has wrought a more claustrophobic and ferociously contested world.” The communications revolution denies empires an unambiguous upper hand. At one level, it allows sovereignties to multiply, as city-states thrive—think of Singapore or Dubai, like Bukhara in Marco Polo’s day. And identities hew not only to empire, but to locality, religion and clan. There is a dark side to this. Islamist mayhem in Afghanistan and Pakistan, as well as the hounding of Rohingyas in Myanmar, attest to it. When globalisation weakens religion and culture, these get reinvented “in more severe, monochromatic and ideological form”—not so much the clash of civilisations as the clash of artificially reconstructed ones.

Eurasia, Mr Kaplan argues, will prove a curious mix of connectivity and anarchy. The Chinese and Russian empires are themselves vulnerable to groups empowered by communications. Crises in the capital could lead to “ungovernability in the far-flung provinces.” Meanwhile, China’s belt-and-road strategy could cause trouble at home. It is intended to make what Mr Kaplan calls “an end run” around China’s restive western province of Xinjiang. There, modernity has forced the Muslim Uighurs into economic competition with incoming Han Chinese in ways that threaten the survival of the Uighurs’ identity. It has led to Uighur radicalisation. The Chinese response to it has been to run Xinjiang as a police state of utmost brutality. It is hard to square that with the open ideals of China’s plans for intercontinental links.

A new medievalism?

Such ideals may be tested elsewhere, too. China’s $46bn investment in roads, railways and a port to connect its heartlands to the Indian Ocean through Pakistan could generate enough local growth to calm the long-running insurgencies along Pakistan’s frontiers. Done wrong, it could pour fuel on Pakistani fires, leaving Chinese plans in ruins.

Mr Kaplan’s book depicts a new medievalism—a world in which empires, not nation-states hold, sway, and where local identities and grievances breed instability and unrest. But it is possible to base judgment of Eurasia’s future too closely on the crescent of war, strife and police-state thuggery that runs from the Middle East through to western China. And, as Parag Khanna of the Lee Kuan Yew School of Public Policy in Singapore points out, the leaders of Eurasia’s three most populous democracies, India, Indonesia and the Philippines, are “doers” out to reverse, however imperfectly, decades of stagnation and corruption.

Even in Eurasian countries that are undemocratic, a desire for economic growth acts as a moderating force in their relations with one another. Their pursuit of regional trade pacts points to their priorities. Geopolitical faultlines persist, such as between the two most populous countries, India and China, and intra-Eurasian war remains a risk. But it is not the super-region’s destiny.

In Singapore, thousands will attend this year’s LGBT rally

BLACK-and-white photographs in the foyer of an arts cinema are filled with smiling, pouting and laughing faces—young and old, of various races. The portraits are of members of Singapore’s lesbian, gay, bisexual and transgender (LGBT) community. The fact that those pictured are willing to be identified publicly, in such a conservative country, is part of what makes the display striking. A grandson of Lee Kuan Yew, the country’s modern founder, is among them, as is a Paralympian medallist and a policewoman. Leslie Kee, a Singaporean photographer who lives in Japan, took the 150-odd pictures for the exhibition, called “Out in Singapore”. It is one event of many which comprise a festival linked to Pink Dot, a rally on July 21st which thousands are expected to attend.

Pink Dot has been held annually since 2009. It is the city-state’s version of a pride celebration and is tightly regulated (participants in last year’s event are pictured). Foreigners are banned from attending. Organisers must spend heavily on barricades and guards to meet the government’s security requirements, which were tightened two years ago. Foreign firms such as Google and Barclays are no longer allowed to sponsor it. About 100 local companies have offered to back this year’s Pink Dot, down from 120 last year. But this is the first year that involves a cultural festival, with talks, film screenings and even a job fair in the build-up to the rally. Activists say it is creating enormous excitement. More than twice as many people applied to have their pictures taken as were needed for the photography display, says Alan Seah, an advertising executive involved in organising both the exhibition and the Pink Dot rally. “Ten years ago it would have been a lot harder for people to come forward.”

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Among the portraits is one of Mr Seah and Laurindo Garcia, whom he plans to marry in Australia later this year. Their union will not be officially recognised in Singapore. Under section 377(A) of the country’s penal code—introduced in the 1930s by British colonial administrators—a man convicted of committing “any act of gross indecency” (ie, sex) with another man is liable to two years in prison.

In practice, the law is not actively enforced. But its existence helps to explain entrenched discrimination in Singapore. For example, the Registrar of Societies refuses registration of LGBT groups (including a homeless shelter for transgender people). Mainstream media shun positive portrayals of LGBT folk. There is no legislation to prevent discrimination against them at work. Same-sex couples find it difficult to gain access to public housing. Their children are deemed illegitimate, which means they are not entitled to welfare benefits. An “unwritten policy” bars gay couples from adopting children in Singapore. Treatments purporting to turn people straight are legal.

The government tries to balance the demands of rainbow activists on the one hand, and of mainly Christian and Islamic conservative groups on the other. Its vague statements muddle matters still further. When asked about his own views on section 377(A) last year, Lee Hsien Loong, the prime minister, was typically non-committal. He said his view involved an “uneasy compromise” that he was prepared to live with “until social attitudes change”. Polling on the issue is infrequent, but a survey conducted five years ago found that 53% of Singaporeans “accept gay lifestyles” but that 55% reject same-sex marriage. Younger Singaporeans tend to be more understanding than their elders. In America, where same-sex marriage has been legal since 2015, polls suggest 62% of adults approve of it. In Britain, where it has been permitted since 2014, support is even higher.

Singapore’s competitive instincts may help to change attitudes. Its status as a financial centre depends on its ability to attract big banks and other large international companies. Talented LGBT employees of such firms, especially those who are married, are put off by Singapore’s strictures. Hong Kong, Singapore’s rival as a financial hub, is more appealing. This month, after years of legal battling, its highest court ordered immigration officials to award spousal visas to same-sex expatriate couples. Singaporean companies are becoming a little bolder on the issue too. Old Chang Kee, a Singaporean street-food chain, dared to support London’s pride event this year. And Poh Heng Jewellery, a local brand, received praise recently for using a gay couple in its shopfront advertising.

Despite Singapore’s illiberal reputation, its LGBT community has a vibrant history. Becca D’Bus, a local drag performer, points out that for decades Bugis Street, a busy shopping area, was famous for the artistry of its drag shows. That came to an end in the 1980s after a government clampdown. But Ms D’Bus’s comedy and wild outfits—sometimes involving netting, spandex and wigs made of luminous plastic tubing—attract huge audiences at festivals and film nights. She also appears at events such as Pink Dot and other, more private, gatherings. Ms D’Bus says, however, that many young drag performers in Singapore still cannot imagine telling their families what they do. Her advice to them on coming out suggests the hazards they face. “If it’s not safe for you, don’t do it,” she says. “If you’re going to lose a roof over your head, or not have food to eat, don’t do it.”

Nawaz Sharif returns to Pakistan, and jail

SITTING stony-faced at the back of a business-class cabin on an Etihad flight from London to the Pakistani city of Lahore, Nawaz Sharif waited patiently for his arrest on the evening of July 13th. His only sign of stress was a balled-up napkin in his right fist. Journalists ignored the pleas of cabin staff to stay in their seats. They clustered around the former prime minister of Pakistan and jabbered reports into smartphones held out on selfie-sticks. Mr Sharif sat still. To his left his 44-year-old daughter, Maryam, occasionally adjusted her white veil. At last around a dozen camouflaged paramilitary police in red berets boarded the plane. Those who reached Mr Sharif first paused by his seat. Supporters yelled from economy class. Mr Sharif slowly rose.

A week earlier Pakistan’s National Accountability Bureau (NAB), an anti-graft court, had sentenced Mr Sharif, in absentia, to ten years in prison for corruption in connection with the purchase of luxury apartments in London’s Park Lane by members of his family. It had also given a seven-year sentence to Maryam. Many thought he would stay in London, where his wife, Kulsoom, is on a ventilator after treatment for throat cancer. When he did decide to return, just 12 days before a general election, there was much speculation that his flight might be diverted to Islamabad to avoid possible attempts by supporters to prevent his arrest in Lahore, his hometown. Some even wondered whether he might be seized by Pakistani agents during his stopover in Abu Dhabi, where the airline is based. At the airport lounge there Mr Sharif himself hinted at dark forces behind an extra wait of one-and-a-half hours: “Think about who is behind this delay and why,” he said.

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But the arrest went smoothly, doubtless to the Pakistani authorities’ great relief. It may have helped that there had been an intense crackdown on Mr Sharif’s supporters in Lahore. Around 10,000 police were deployed across the city to prevent a column of tens of thousands of his fans from reaching the airport. Lorries and containers were used to cut off roads leading to it. The caretaker provincial government blocked access to the internet and mobile phone services. Almost 300 workers of Mr Sharif’s Pakistan Muslim League-Nawaz (PML-N), the country’s ruling party, were jailed temporarily on flimsy public-order offences. After Mr Sharif disembarked, around fifty paramilitary police linked arms to form a human shield around a car that took him a short distance to another aircraft that flew him to the city of Rawalpindi, close to the capital, where he was deposited in jail.

Mr Sharif, 68, who retains control of the PML-N, says his sentencing was part of a military-backed conspiracy to deny his party a second term in office and to take revenge on him personally for trying to limit the army’s overweening influence after he began his third stint as prime minister in 2013. Reviewing his political career since the first time he was jailed, after his overthrow in a bloodless coup in 1999, Mr Sharif told The Economist on board the Etihad flight that his battle with the “establishment” was “heading towards its peak”. He questioned how credible the election would be with the government “taking such action against our people”.

Mr Sharif’s opponents hope that prison will limit his ability to influence politics. He may indeed find it hard to marshal his lieutenants from behind bars. A media blackout will frustrate any attempt to do so. On the day of Mr Sharif’s return, Pakistan’s media regulator warned media companies against airing footage of the return. A show about Mr Sharif’s return, anchored by one of Pakistan’s most prominent television presenters, Syed Talat Hussain, was cancelled. A veteran TV correspondent, Asma Shirazi, found her lengthy interview with Mr Sharif did not air. “This is worse than dictatorship,” she groaned while waiting in the business-class lounge of Abu Dhabi airport. Ms Shirazi recalled that Pervez Musharraf, the general who toppled Mr Sharif in 1999, had at least allowed journalists to cover the return from exile in 2007 of Benazir Bhutto, another powerful civilian leader feared by the army.

But voters are unlikely to forget Mr Sharif’s decision to sacrifice personal comfort. Murtaza Solangi, a television host, says the former prime minister’s influence within the PML-N will become stronger. Many observers expect the party will fail to retain its parliamentary majority in the election (many of its candidates have defected to the rival Pakistan Tehreek-e-Insaf, a party controlled by Imran Khan, a former cricketer who enjoys support within the army). But Mr Sharif told The Economist that his “struggle” would be “taken forward by my party and by my brother, Shahbaz.” The PML-N may take encouragement from polling conducted for the army suggesting that it is losing popularity in Punjab, a crucial province of which Lahore is the capital and where support for Mr Sharif is strongest.

Mr Sharif’s daughter, Maryam, may also still have a political future. Even just a year ago she was scorned by many people in Pakistan as little more than a bolshie Twitter-user. During her father’s recent saga her stature has risen. Alternately demur and—to quote Mr Hussain, the television presenter—as ferocious as “ten thousand horses” in defence of her father, she faces an additional ten-year ban from politics once she is freed. But, as Mr Sharif put it before leaving London: “These people did not even remember in their hate what stature daughters have in Pakistan.” (the late Ms Bhutto was one such: she went on to become prime minister after her father, a former prime minister, was hanged.) Sentenced for “abetment” and “non-co-operation with the court” in part on the basis of evidence that she had forged a document (her anachronistic use of Calibri font gave her away), Maryam Sharif may yet leave a large mark on Pakistan’s history.


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