The history of Pakistan-which for the period preceding the nation's founding in 1947,is intermittently shared with those of Afghanistan, India, and Iran-traces back to the beginnings of human life in South Asia. Spanning the western expanse of the Indian subcontinent and the eastern borderlands of the Iranian plateau, the region of present-day Pakistan served both as the fertile ground of some of South Asia's major civilizations and as the subcontinent's gateway to the Middle East and Central Asia. Pakistan is home to some of the most important sites of archaeology, including the earliest palaeolithic hominid site in South Asia in the Soan River valley. Situated on the first coastal migration route of anatomically modern Homo sapiens out of Africa, the region was inhabited early by modern humans.The 9,000-year history of village life in South Asia goes back to the Neolithic (7000-4300 BCE) site of Mehrgarh in Pakistan, and the 5,000-year history of urban civilization in South Asia to the various sites of the Indus Valley Civilization, including Mohenjo Daro and Harappa. The ensuing millennia saw the region of present-day Pakistan absorb many influences-represented among others in the Vedic-Buddhist site of Taxila, the Greco-Buddhist site of Takht-i-Bahi, the 14th-century Islamic-Sindhi monuments of Thatta, and the 17th-century Mughal monuments of Lahore. From the late 18th century, the region was gradually appropriated by the British East India Company-resulting in 90 years of direct British rule, and ending with the creation of Pakistan in 1947, through the efforts, among others, of its future national poet Allama Iqbal and its founder, Muhammad Ali Jinnah. Since then, the country has experienced both civilian-democratic and military rule, resulting in periods of significant economic and military growth as well those of instability; significant during the latter, was the secession, in 1971, of East Pakistan as the new nation of Bangladesh.
Civilian rule returned after the war when General Yahya Khan handed over power to Zulfikar Ali Bhutto. In 1972, Pakistani intelligence learned that India was close to developing a nuclear bomb, and in response, Bhutto formed a group of engineers and scientists, headed by nuclear scientist Abdus Salam - who later won the Nobel Prize in Physics -to develop nuclear devices.
Pakistan had been a US ally for much of the Cold War, from the 1950s and as a member of CENTO and SEATO. The Soviet invasion of Afghanistan renewed and deepened the US-Pakistan alliance. The Reagan administration in the United States helped supply and finance an anti-Soviet insurgency in Afghanistan, using Pakistan as a conduit. In retaliation, the KHAD, under Afghan leader Mohammad Najibullah, carried out (according to the Mitrokhin archives and other sources) a large number of terrorist operations against Pakistan, which also suffered from an influx of weaponry and drugs from Afghanistan. In the 1980s, as the front-line state in the anti-Soviet struggle, Pakistan received substantial aid from the United States and took in millions of Afghan (mostly Pashtun) refugees fleeing the Soviet occupation. The influx of so many refugees - believed to be the largest refugee population in the world - had a heavy impact on Pakistan and its effects continue to this day. From 1988 to 1999, Pakistan was ruled by civilian governments, alternately headed by Benazir Bhutto and Nawaz Sharif, who were each elected twice and removed from office on charges of corruption. Economic growth declined towards the end of this period, hurt by the Asian financial crisis, and economic sanctions imposed on Pakistan after its first tests of nuclear devices in 1998. On May 12, 2000 the Supreme Court of Pakistan ordered Pervez Musharraf to hold general elections by October 12, 2002. In an attempt to legitimize his presidency and assure its continuance after the impending elections, he held a national referendum on April 30, 2002, which extended his presidential term to a period ending five years after the October elections. General Musharraf continues to hold post of the army chief. In keeping with its rapid economic development in recent years, Pakistan registered an economic growth rate of 7 percent in the financial year 2006-07, the fourth consecutive year of seven percent growth. In its June 2006 Economic Survey global finance giant Morgan Stanley listed Pakistan on its list of major emerging markets in the world economy, placing it on a list of 25 countries displaying continued moderate to strong growth over a sustained period of time. The report noted "its economy has been growing quickly in recent periods and corporate direct investors have taken notice". Concurrently, highlighting the strides made on the economic front in recent times, Moody's Investors Service in December 2006 upgraded Pakistan's credit rating from B2 to B1, noting a "positive outlook". In late March 2007, the Asian Development Bank "Outlook 2007" report predicted that strong growth would continue in 2007 and 2008 with growth rates of 6.5 to 7 percent, with manufacturing, exports and consumer expenditure leading the way. Further progress was highlighted by news that the FDI for FY 2006/7 would touch $7 billion, eclipsing the targeted $4 billion. Telecoms, real estate and energy are major industries for FDI.