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		</div><p><a href="http://londonglossy.com/wp-content/uploads/2011/01/party-rejoins-pakistan-coalition.jpg"><img class="alignnone size-full" title="PM Yousuf Raza Gilani agreed to reverse fuel price hikes that partly prompted a coalition party's defection from his government" src="http://londonglossy.com/wp-content/uploads/2011/01/min-party-rejoins-pakistan-coalition.jpg" alt="PM Yousuf Raza Gilani agreed to reverse fuel price hikes that partly prompted a coalition party's defection from his government"/></a></p>
<p>The second-largest member of Pakistan&#8217;s ruling coalition has reversed its decision to join the opposition, averting the potential collapse of the nation&#8217;s government. </p>
<p>The move by the Muttahida Qaumi Movement, announced after the government backed down on unpopular economic measures, eased the political crisis facing Pakistan. But the government&#8217;s concessions could prevent it from receiving billions in international loans, exacerbating the country&#8217;s already precarious financial position.</p>
<p>The MQM&#8217;s decision came a day after Prime Minister Yousuf Raza Gilani said the government would reverse unpopular fuel price hikes that partly prompted the party&#8217;s defection. He also said during a visit to MQM headquarters in the southern port city of Karachi that the government would postpone a new tax system meant to raise more revenue.</p>
<p>&#8220;Our unity will benefit both the country and the national interest,&#8221; said Gilani, while standing next to senior MQM leader Raza Haroon. &#8220;We can steer the country out of this storm.&#8221;</p>
<p>Haroon said the MQM had agreed to rejoin the coalition for the sake of democracy and the country&#8217;s well-being. But the party&#8217;s demands that the government reduce fuel prices and hold off on tax reform will deepen the country&#8217;s deficit, a development that could lead the International Monetary Fund to withhold loans desperately needed to stabilise the economy.</p>
<p>IMF spokeswoman Caroline Atkinson criticised the fuel price decision, saying Pakistan needed to reduce the amount of money it spends on energy subsidies.</p>
<p>&#8220;They&#8217;re inefficient and untargeted so that the bulk &#8230; of the benefit from the energy subsidy goes to higher-income individuals and large companies,&#8221; Atkinson said.</p>
<p>US Secretary of State Hillary Clinton also criticised the decision, saying it was &#8220;a mistake to reverse the progress that was being made to provide a stronger economic base for Pakistan.&#8221;</p>
<p>Political analyst Mosharraf Zaidi said the ruling Pakistan People&#8217;s Party may have survived this crisis, but it was severely weakened and unlikely to get much done legislatively in the two years remaining in its term.</p>
<p>He said: &#8220;There&#8217;s a good chance it&#8217;ll complete its mandated tenure, but it will do so literally continuing to stumble and sputter from one crisis to next.&#8221;</p>
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