Islamabad, Pakistan (CNN) -- An important political party that recently broke from Pakistan's ruling coalition has rejoined the government, a move that has averted a crisis in the South Asian nation.
The Muttahida Quami Movement, or MQM, announced Friday it will return to the coalition government after breaking away last week.
The departure stoked fears about the future of a government the United States has been counting on to confront militants in the country's tribal region, where the Taliban and al Qaeda have a strong presence.
MQM's move means Prime Minister Yousaf Raza Gilani and his Pakistan People's Party now regain their governing majority, which it lost when MQM left his coalition.
The MQM decision comes a day after Gilani announced a reversal of a fuel price hike that went into effect less than a week ago. The price hike -- one of many complaints the party had -- prompted MQM to bolt from the government.
"We have withdrawn the hike in fuel prices," Gilani said, adding "we will not move forward to impose new taxes until a consensus is developed".
Raza Harron, senior leader of MQM, said that his party made the decision "for the sake of democracy, law and order in the country, and to address inflation".
In a visit to MQM's headquarters in Karachi Friday, Gilani told reporters that the government had addressed most of MQM's demands. He also promised that any remaining demands will be resolved with consensus.
Pakistan has one of the smallest tax bases in the world. So there is runaway inflation in the country -- in November, consumer prices jumped over 15% from the year before. That's the highest rate in Asia.
The gas price hike would have helped build that tax base. Without it, the government will probably be forced to print more money -- which adds to the runaway inflation in Pakistan. CNN
