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Pakistan was an ally of the United States for much of its early history as a modern nation-state, from the 1950s and as a member of CENTO and SEATO. However, it all changed from 1965 when Pakistan went to war with India during the height of the Cold War. The US placed heavy military sanctions on Pakistan during the war forcing Pakistan to agree to the cease fire and pulling out of the war that was heading for a stalemate.
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According to many sources, the government has made substantial inroads in macroeconomic reform since 2000, and medium-term prospects for job creation and poverty reduction are the best in nearly a decade. Islamabad has raised development spending from about 2% of GDP in the 1990s to 4% in 2003, a necessary step towards reversing the broad underdevelopment of its social sector.
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Testament to the British mishandling of the independence, in addition to compounding conflict, are the still pending disputes of Kashmir and Rann of Kutch (Sir Creek) between India and Pakistan. Both nations have fought three all out wars due to these unsettled issues, primarily focused on Kashmir.