S&P may cut Pakistan

Standard & Poor's said that the sovereign credit ratings on Pakistan (foreign currency B+/negative/B, local currency BB/negative/B) could be lowered, if the assassination of Benazir Bhutto precipitates heightened levels of violence and political turmoil.

The death of former prime minister Bhutto, one of the main political contenders in the upcoming general elections, is a significant blow to Pakistan's transition to democratic rule and leaves a considerable political vacuum in Pakistani politics, the agency said.

It therefore casts doubts on whether general elections scheduled for Jan. 8 will proceed, while violent reactions by supporters could potentially spark escalating civil disorder, S&P added.

The prevailing negative outlook on the ratings on Pakistan encapsulates to a large extent risks to the political process, including attempts on the life of political leaders after a number of such incidents in the past, according to the agency.

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