Saturday, June 4, 2011

Obama Retools 2008 Machine for Tough Run

Saddled with a faltering economic recovery, President Obama is rebuilding the campaign machinery that vaulted him into office, hoping it can overcome the challenges of persistently high unemployment and a fractured coalition of supporters.

Under the cover of an intensifying Republican nominating contest, the Obama campaign’s top fund-raisers gathered for their first meeting here last week. To galvanize them, they were shown a presentation of potential rivals, including Sarah Palin, and given access to senior advisers to the president, including the White House chief of staff, William M. Daley.

They pledged to reach a fund-raising goal of $60 million before June 30 as a first installment to create a state-by-state organization. Their goals include reactivating the network of supporters, registering young and Latino voters and fighting restrictive new election laws in battleground states now led by Republicans.

While Mr. Obama will not fully engage in campaign activity until next year, aides said, he is embarking on weekly economic-focused trips throughout the summer. Doing so will allow him to use his bully pulpit to show that he is focused on addressing joblessness, the issue that more than any other could shape his electoral prospects and that Republicans are using to assert that his policies have failed.

He will also continue to be the main draw in a fund-raising campaign that has a goal of taking in at least $750 million by Election Day, which would match his 2008 figure even though he does not face the long primary battle that he did four years ago.

“I’m confident that the things that we can control, we will do a good job on,” said David Axelrod, the president’s senior political strategist, who returned to Chicago to help with the re-election effort.

The campaign is shaping up as a test of whether the much-vaunted organizing abilities of Mr. Obama and his team can offset the headwinds he faces. In battleground states, volunteers are fanning out by the thousands to reach out to neighbors who helped Mr. Obama in his first presidential campaign and persuade them to re-up.

Campaign officials said they know that in some cases, 2008 supporters will have to be coached to overcome what they see as disappointment that Mr. Obama has not achieved as much as they hoped. Several thousand times a week, still-committed volunteers knock on the doors of potential new recruits and neighbors involved four years ago to see if they will join in. The idea is to get face-to-face, neighbor-to-neighbor commitments that will have more staying power than those collected by strangers over the phone.

And in the re-election nerve center here, where a handmade calendar counts down the more than 520 days that remain before the election, campaign officials are sorting through census and polling data as they work to chart a variety of routes to the 270 electoral votes Mr. Obama will need to clinch a second term.

The early focus is on the same collection of states that Mr. Obama carried in 2008, with the exception of Indiana, which advisers believe is out of reach. But among these, strategists are digging deeper into Colorado, Florida, Nevada, North Carolina and Virginia — where new census figures show surging populations of Hispanics and blacks, two groups that supported Mr. Obama in 2008 by wide margins. The campaign sees possibilities for gains, for example, around Charlotte, N.C., which not coincidentally is where Mr. Obama chose to hold his party’s nominating convention next year, a decision that aides said signaled how serious they are about competing in North Carolina.

So far, the regrouping of the campaign is a methodical, nuts-and-bolts operation. It is oriented toward rekindling a grass-roots movement that had been the envy of Republicans in 2008 but has shown severe signs of strain over two years of partisan rancor in Washington and economic struggle across the country.

But for all of the planning, the biggest challenges of the election remain largely out of the organizers’ control, as the bleak jobs report on Friday showed.

So uncertain are the economic indicators that Mr. Obama’s aides say they have not fully settled on an overarching campaign theme for next year.

For now, the president faces a delicate task in arguing that things have improved under his watch when they remain so grim for so many — and that the programs he has put in place are working but need time to show their full benefits. With their hopes dashed at this point of substantial improvement in unemployment anytime soon, aides indicated that the theme was likely to be less “morning in America” and more “don’t change horses in midstream.”

Mr. Axelrod said: “We’re not going to be putting up a ‘Mission Accomplished’ sign. Part of the message is going to be we have to see these things through.”

In an interview at his Chicago consulting offices, Mr. Axelrod repeatedly said “stability” for the middle class would be central.

Advisers said the president was just beginning to plug into the campaign, and even then, sporadically. While the campaign manager here, Jim Messina, briefs him on the organizational effort, aides said Mr. Obama was not focused or very interested in the nitty-gritty details, for now.

“He’s doing his day job,” Mr. Messina said in an interview at his new office overlooking Millennium Park. “When he and I are talking about these things he wants to know, ‘What are we hearing on the ground?’ ”

But at the White House and in Chicago, aides are also keeping a close eye on the Republican field.

The president’s advisers are most closely watching the candidacies of Mitt Romney and Tim Pawlenty, but they are mindful that the rise of the Tea Party movement makes the course of the race hard to predict and makes it difficult to determine the strength of potential populist candidates like Ms. Palin.

“We’re doing our due diligence in terms of really understanding where this race is at and where people are at,” Mr. Axelrod said. “That’s the most important work we can do right now.”

In several interviews, aides to Mr. Obama said they were impressed with the early campaign tactics of Mr. Romney and Mr. Pawlenty. They said Mr. Romney had been wise to remain out of the fray for as long as possible — giving rivals less time to attack him — and Mr. Pawlenty wise to barnstorm important states, early, to become better known. Mr. Romney’s previous experience as a candidate, they suggested, could help him deal with the problems he faces.

They said they also viewed former Gov. Jon M. Huntsman Jr. of Utah, until a few weeks ago Mr. Obama’s ambassador to China, as a potentially formidable general election candidate if he did not have to modulate his policy stances to navigate the Republican primary.

They said they would be ready to pounce on any candidate who switches positions in the hunt for the nomination as lacking core convictions, indicating that they were particularly keen on doing so against Mr. Romney, who is still facing such accusations from his 2008 campaign.

al Qaeda ZOMBIE killed in Pakistan by drone strike

A U.S. drone strike killed a senior al Qaeda figure in Pakistan after a tipoff from local intelligence, a Pakistani intelligence official said on Saturday.
The elimination of Ilyas Kashmiri, regarded as one of the most dangerous militants in the world, appeared to be another coup for the United States after American special forces killed Osama bin Laden in a garrison town close to Islamabad on May 2.
Islamabad's cooperation in the killing could help repair ties with Washington, badly damaged when it was discovered that bin Laden had apparently been living in Pakistan for years.
"We are sure that he (Kashmiri) has been killed. Now we are trying to retrieve the bodies. We want to get photographs of the bodies," said the Pakistani intelligence official.
Kashmiri was wrongly reported to have been killed in a September 2009 strike by a U.S. drone.
A Pakistani television station quoted the group Kashmiri headed, Harkat-ul Jihad Islami (HUJI) which is allied to al Qaeda, as saying the latest report was true.
"We confirm that our Amir (leader) and commander in chief, Mohammad Ilyas Kashmiri, along with other companions, was martyred in an American drone strike on June 3, 2011, at 11:15 p.m.," Abu Hanzla Kashir, who identified himself as a HUJI spokesman, said in a statement faxed to the station.
"God willing ... America will very soon see our full revenge. Our only target is America."
The authenticity of the statement could not be verified.
Kashmiri's death is good news for Pakistan, which has failed to subdue militants seeking to topple its unpopular government despite a series of army offensives against their strongholds.
"It will be a very big blow to militants and Pakistan will be a major beneficiary because he was behind attacks on Pakistani defense and military installations," said retired Brigadier Asad Munir, a former Pakistani intelligence officer.
Kashmiri, said to be a former Pakistani military officer, and other militants were with an Afghan Taliban member involved in liaison with the Pakistani Taliban when the drone missile struck, said the intelligence official.
He said they were in a house in South Waziristan, close to the Afghan border in northwest Pakistan, that was believed to be the headquarters of Kashmiri's group, which has been described as an operational wing of al Qaeda.
"We were closing in on him and he switched off his satellite phone and cellphone and he wanted to cross the border to Afghanistan to find a hiding place," the official added. "It was a tipoff by us since we were closely monitoring his movements."
Five of his close allies were also killed in the attack by a pilotless drone aircraft, along with two other militants, intelligence officials said.
A U.S. embassy spokesman said he could not confirm the killing of Kashmiri or whether Pakistan provided support for an operation.
The killing of bin Laden aroused international suspicions that Pakistani authorities had been complicit in hiding him, and led to domestic criticism of them for failing to detect or stop the U.S. team that killed him.
Kashmiri was on a list which the United States gave Pakistan of senior militants it wanted killed or captured, said a Pakistani official.
Drone strikes have increased under the Obama administration, sometimes killing civilians and fuelling anti-American sentiment in Pakistan.
While Pakistani leaders publicly criticize the attacks, analysts say killing high-value targets like Kashmiri would not be possible without Pakistani intelligence.
Washington reiterated its call on Pakistan, a major recipient of U.S. aid, to crack down harder on militancy after it was discovered that bin Laden had been living about a two-hour drive from intelligence headquarters.
The U.S. Department of State has labeled Kashmiri a "specially designated global terrorist."
Last year, the U.S. attorney's office quoted a Chicago taxi driver charged with sending money to Kashmiri as saying the Pakistani militant had told him he "wanted to train operatives to conduct attacks in the United States."
Kashmiri battled Soviet occupation troops in the 1980s in Afghanistan, where he lost an eye. His group also fought Indian rule in the disputed Kashmir region.
He has been linked to attacks including the 2008 rampage through the Indian city of Mumbai which killed 166 people.
"This will be a huge loss for al Qaeda," said Kamran Bokhari of global intelligence firm STRATFOR. "Everyone will benefit, the United States, Pakistan and India."
The Pakistani media has speculated that Kashmiri was the mastermind of an attack on the PNS Mehran naval base in Karachi last month which humiliated the Pakistani military.
In that operation, six militants held off 100 security forces, including commandos, for 16 hours.

APNS president backs HRW claims on Shahzad’s murder

Hameed Haroon, president of the All Pakistan Newspapers Society, has sharply reacted to the denial by the Inter-Services Intelligence (ISI) regarding its involvement in the abduction and murder of Pakistani journalist Saleem Shahzad. The ISI has denied any role in the murder and termed the allegation of Human Right’s Watch (HRW) as “baseless”.

Haroon, also the chief executive officer of Dawn, has confirmed that the slain journalist had received threatening messages from ISI on at least three occasions. The deceased had not only informed his employer, Asia Time Online, but also confided in Haroon and other friends.

Following is the full text of his statement, released to the media on June 2, 2011.

“It has come to my notice that a spokesman of Inter Services Intelligence (ISI) while speaking to the official national news agency in Islamabad yesterday has questioned the “baseless allegations” leveled by Human Rights Watch on the basis of an E mail from Saleem Shahzad, the Bureau Chief of the Hong Kong based Asia Times Online, in their possession . Mr Shahzad was murdered three days ago near Islamabad after being abducted by unknown persons.

“I wish to state on record that the e mail in the possession of Mr Ali Dayan, the monitor for Human Rights Watch (HRW) stationed in ,Lahore Pakistan, is indeed one of the three identical E mails sent by Mr Shahzad to HRW , his employers (Asia Times Online) and to his former employer, myself . I also wish to verify that allegations levied by HRW at the Inter services Intelligence (ISI) are essentially in complete consonance with the contents of the slain journalists E mail ”

“In their denial issued Wednesday an anonymous spokesman from the ISI has questioned the “baseless allegation” leveled against ISI by Mr Dayan of HRW. I wish to state on the record for the information of the officers involved in investigating journalist Saleem Shahzad’s gruesome murder that the late journalist confided to me and several others that he had received death threats from various officers of the ISI on at least three occasions in the past five years. Whatever the substance of these allegations , they form an integral part of Mr Shahzad’s last testimony. Mr Shahzad’s purpose in transmitting this information to three concerned colleagues in the media ,was not to defame the ISI but to avert a possible fulfillment of what he clearly perceived to be a death threat. The last threat which I refer to was recorded by Mr Shahzad by e mail with me, tersely phrased as “for the record”, at precisely 4.11 am on October18,2010, wherein he recounted the details of his meetings at the ISI headquarters in Islamabad between the Director General- Media Wing (ISI) Rear- Admiral Adnan Nazir, with the Deputy Director General of the Media Wing, Commodore Khalid Pervaiz, also being present on the occasion.

The ostensible agenda for this meeting was the subject of Mr Shahzads’s story of Asia Times Online with respect to the Pakistan government freeing of senior Afghan Taliban commander, Mullah Baraadar. Mr Shahzad informed the senior officials that he story was leaked by an intelligence channel in Pakistan, and confirmed thereafter by the ” most credible Taliban s source” . The senior officials present suggested to Mr Shahzad that he officially deny the story, which he refused to do, terming the official’s demand as “impractical”

The senior intelligence official was “curious” to identify the source of Mr Shahzad’s story claiming it to be a “shame” that such a leak should occur from the offices of a high profile intelligence service. Mr Shahzad additionally stated that the Rear -Admiral offered him some information, ostensibly “as a favour ” in the following words : ” We have recently arrested a terrorist and have recovered a lot of data, diaries and other materials during the interrogation. The terrorist had a hit list with him. If I find your name on the list I will certainly let you know.”

Mr Shahzad subsequently confirmed to me in a conversation that he not only interpreted this conversation as a veiled threat to his person. He also informed me that he let an official from the ISI know soon thereafter that he intended share the content of this threat with his colleagues ..

As President of the All Pakistan Newspapers Society (APNS) and as head of Pakistan’s leading media group I consider the security of journalists to be of paramount importance. At present the APNS has officially committed itself to the creation of a national body for the investigations of serious threats to the lives of journalists, a body which the Committee to Protect the Journalists in New York, and other leading organizations in the Pakistani press and human rights bodies have promised to lend vigorous support to. Pakistan has one of the high rates in the world for journalists’ killings and such an environment is inimical to the functioning of democracy. The government and the intelligence agencies should take the investigation into Mr Shahzad’s murder seriously and examine his last testimony closely.

Whether the Oct 18th incident itself or his last article in the Asia Times Online, that alleged Al-Qaeda penetration of the security curtain for Pakistani Naval establishment in Karachi hastened his murder is for the official investigation to uncover. And nobody not even the ISI should be above the law”.

'Saudi Women Revolution' makes a stand for equal rights

As election centers across Saudi Arabia opened on April 23 for voters to register for forthcoming municipal elections, groups of women turned up asking to take part.
As expected, they were turned away -- women will not be able to stand or vote in September's municipal elections -- but just by showing up they had made their point.
This was one of the first public acts of the newly-formed "Saudi Women Revolution," a movement set up to campaign for the end of Saudi Arabia's discriminatory laws.
Their chief aim is ending male guardianship, which means Saudi women often need permission from their husband, father, brother or even son to work, travel, study, marry, or access health care, according to Human Rights Watch.
They also want to be allowed to drive, which is forbidden for women in the Kingdom.The Saudi Women Revolution was started as a Facebook page and a discussion topic, or hash tag, on Twitter in February, by Nuha Al Sulaiman.
Al Sulaiman, 28, said: "I started the Twitter hash tag to allow women to write whatever they are suffering from.
"It wasn't easy to do, particularly using the word 'revolution,' but I reached a point where I just had to do something about our daily suffering.
"In the past I couldn't meet people who have the same ideas as I have, but social media has made that possible."
The Facebook group now has more than 3,000 "likes" and a core of the women have met in person to discuss their campaign.
Al Sulaiman said: "We will do whatever it takes. We will go to the king himself. We will never stop fighting for our rights because it's time for change.
"Women should be able to take responsibility for everything they do themselves. It makes my blood drive high that nothing is changing."
Al Sulaiman said she and 11 other women had tried to register to vote at an election center in Riyadh, while other groups of women went to centers in Jeddah, Dammam and Khobar.
Municipal elections in Saudi Arabia will be held in September for only the second time in more than 40 years. The Saudi electoral commission was reported to have said that women cannot vote because preparations had not been made to keep them separate.Rasha Al Duwaisi, a 30-year-old mother of two who took part in the protest, said: "The elections are a sham and many men are boycotting them. However, we still want the opportunity to be involved.
"The most important thing is we want women to be recognized as adults.
She added: "The first time I was interviewed in the media I was so nervous I was shaking. I'd never done anything like this before and I didn't know if I had antagonized the government.
"People are saying I'm immodest and against religion, but that isn't true."
Those involved are mostly young university-educated women. They said it took some time before they trusted each other enough to give their real names and to arrange to meet in person.
Not all Saudi women want to end male guardianship. In 2009, a group of Saudi women launched a campaign called "My Guardian Knows What's Best for Me," which attracted thousands of supporters.
But for Saudi Women Revolution, it's a matter of ending discrimination. Another member, Khuloud al Fahad, a 33-year-old mother of two and businesswoman, said: "We are trying to do this in a safe and correct way. We don't want problems with the government, we just want to send a message that we will not keep silent about this discrimination anymore.
"Our freedom is very restricted. I can't move without permission, I can't travel without permission, I can't have surgery without permission, I can't rent a flat without permission.
"When my daughter was in hospital, I wasn't even allowed to sign the papers for her to come home. We are not half human beings, we are human beings."
Wajeha al Huwaider, 49, a veteran Saudi women's rights campaigner who has long campaigned for the end of male guardianship, said the protests at the election centers were the right way to get the campaign noticed.
And the campaign has attracted support from outside the country. Mona Kareem, a journalist and blogger in Kuwait, supported Saudi Women Revolution by collating the most common demands from the group's Twitter topic into a statement to be sent to human rights organizations. She published it on her blog translated into seven languages.
Saudi Women Revolution is planning to publish its own formal statement of demands this week and will then be asking women to sign their names to it.
Even signing their names to the statement will take courage.
Al Huwaider said: "Women in this country don't even have control over their own names. Their husbands or fathers are angry with them if they put their name to something, which is why many are not willing to stand up for their rights.
"Women are just like property, owned by the men in their family."

Afghanistan commander considers exit strategy

Planning is underway for the initial withdrawal of U.S. troops from Afghanistan, and the details are being closely guarded by the officer overseeing the process, Army Gen. David Petraeus.

“The ground-truth is there’s one action officer on this effort,” Petraeus, commander of the International Security Assistance Force and U.S. Forces Afghanistan, told Military Times during an exclusive interview Friday at his office inside NATO’s headquarters here. “You’re looking at him.”

Petraeus expects his options will be delivered to the White House before the end of June, around the time he is likely to testify before the Senate Armed Services Committee on his nomination to become the CIA’s next director. He dismissed recent media reports suggesting the initial drawdown would include between 5,000 and 10,000 troops, saying nobody could have that information because he has not shared it with anyone.

Neither Petraeus’ commander’s initiatives group nor his executive staff has participated in the development of options for the president, the general said. The effort has taken place in his office, behind his own desk.

“There may be one or two folks on the staff who think they know something about it; they might be deceiving themselves because there are misdirection plays out there,” Petraeus said. “I want to assure everybody above me that this is not going to leak, that there will be no kinds of atmospherics as a result of leaks.”

Before they’re presented to President Obama, Petraeus’ plans will be shared only with Marine Gen. James Mattis, commander of U.S. Central Command; Adm. Mike Mullen, chairman of the Joint Chiefs of Staff; and Defense Secretary Robert Gates. Gates and Mullen, he said, will most likely be the ones who take it to the Oval Office.

Petraeus is likely hoping to avoid a repeat of late 2009, when his recommendation for a troop surge in Afghanistan — a proposal meant only for the president — was leaked to the media, fueling pre-decisional speculation for weeks. Upon announcing the surge of 30,000 U.S. troops, Obama made it clear those forces would begin to leave in July 2011.

“What a commander in my position should do is to provide the chain of command and president with options to implement the policy … at a pace determined by conditions on the ground,” said Petraeus, who then was in charge of CENTCOM.

The recommendations for the president, Petraeus said, are informed by visits to ground commanders across Afghanistan, including the volatile southern provinces where Marines and soldiers continue to battle Taliban fighters in what used to be their exclusive stronghold.

Important considerations also include the purview of Mattis, whose context is the entire theater, not just Afghanistan, and by Gates and Mullen, who must consider broader global context. At the top is Obama, who faces difficult fiscal challenges and an atmosphere in Congress where there is waning support for the war.

Bahrain police open fire at protesters in capital

Bahraini police fired tear gas and rubber bullets at protesters marching toward the landmark Pearl Square in the country's capital Friday, two days after authorities lifted emergency rule.
The downtown square was the focus of weeks of Shiite-led protests against the Gulf nation's Sunni rulers earlier this year. Witnesses in the tiny island kingdom said there were no immediate reports of casualties among the hundreds of opposition supporters who took their grievances to the streets for the first time since martial law was imposed more than two months ago.

The country's security force moved against the protesters shortly before Formula One's governing body deemed the kingdom safe enough to host the Bahrain Grand Prix in October.

The annual F1 race has been Bahrain's most profitable international event since 2004, when the nation became the first Arab country to stage the Grand Prix. Bahrain organizers insisted they are ready to host the race this year despite the deadly crackdown. The season-opening March auto race was postponed because of the political unrest.

Also Friday, thousands of mourners gathered at a cemetery in the capital, Manama, to bury a protester who died in a hospital earlier in the day of injuries from a demonstration in March.

The death of 63-year-old Salman Abu Idris raised to at least 31 the number of people killed since the campaign for greater rights and freedoms began in the Western-allied nation in February.

Bahrain is home to the U.S. Navy's 5th Fleet, and the U.S. has called on its leaders to make reforms in an effort to meet at least some of the protest movement's demands.

The government lifted emergency rule Wednesday, pulling back tanks and soldiers from the heart of the capital. But authorities warned they were not easing pressure on anti-government protesters. Opposition groups called supporters to return to the streets, the first such appeal since the military overran the protesters' encampment at Pearl Square after martial law was imposed in mid-March.

U.N. Secretary-General Ban Ki-moon welcomed the lifting of emergency laws and the king's call for a national dialogue at a meeting in New York late Friday with Crown Prince Salman bin Hamad Al Khalifa, who is also Bahrain's deputy defense chief, and Foreign Minister Khalid bin Ahmed Al Khalifa.

"The secretary-general reiterated his call on the government and security forces in Bahrain to uphold international human rights norms and standards and welcomed the commitment and assurances made by the crown prince in this regard," U.N. associate spokeswoman Vannina Maestracci said.

Ban also reiterated the U.N.'s readiness to assist in promoting a national dialogue, she said.

Bahrain's Sunni rulers invited 1,500 troops from a Saudi-led Gulf force to help suppress the unrest when emergency rule was declared. The Saudi intervention infuriated Iran, the major Shiite power in the Gulf. It underscored the fears of Iran among Sunni-dominated Arab countries, particularly among Gulf Arab leaders. They fear gains by Bahrain's Shiites could provide an opening for expanded Iranian influence on the doorstep of rival Saudi Arabia.

Despite tight security across Bahrain and police reinforcements at checkpoints around the capital, hundreds of opposition supporters from the mostly Shiite populated villages around Manama took their grievances to the streets again and set off to reclaim Pearl Square.

"Instead of rights, every family got a political prisoner. Did the government expect people to stay at home?" said Nabeel Rajab, a leading activist and president of the Bahrain Center for Human Rights. "After almost three months of military rule, the crisis is deeper because every family suffered when the army was sent to solve a political problem."

The emergency rule gave the military wide powers to suppress the Shiite-led demonstrations against the minority Sunni monarchy that has ruled Bahrain for over 200 years. Hundreds of protesters, political leaders and Shiite professionals like doctors and lawyers have been arrested and tried in a special security court, set up under martial law. Two protesters were sentenced to death.

Just before the emergency rule was lifted, Bahrain's king urged "unity talks" with protest factions beginning in July — a gesture that fell short of opposition demands for a constitutional monarchy with an elected government. King Hamad bin Isa Al Khalifa's message was in sharp contrast to a Justice Ministry statement calling the demonstrations "criminal acts" and warning that any further challenges will have "consequences."

State of the economy

Daily Times
Not surprisingly, the Economic Survey 2010-11 unveiled by Finance Minister Abdul Hafeez Sheikh in a news conference on Thursday lists a litany of reasons why all targets were missed and the economy’s growth slowed down. Amongst the negative factors impacting the economy, pride of place belongs to last year’s devastating floods, the energy crisis, the hike in international oil prices and the internal and regional security challenges. The economy grew only 2.4 percent against a target of 4.5 percent. The average growth for the last three years of the PPP-led government pans out at 2.6 percent, the lowest in three decades. During the same period, Asian countries grew by 8.4 percent, with India, Sri Lanka and Bangladesh recording growth of 7.7, 6.6 and 6 percent respectively.

The finance minister revealed that the floods in 2010 affected 1.6 million families and caused damage of $ 10.5 billion to infrastructure, agriculture and other assets. It must be said that despite the earlier sympathetic noises by the international community, the actual help to flood affectees and the rehabilitation of infrastructure, etc, has fallen far short of expectations or commitments. Even well meaning local philanthropists seem to have run out of steam, leaving millions still living under open skies and without opportunities to rehabilitate their incomes and lives.

The energy crisis includes not only a shortfall of supply versus demand, but a chronic circular debt of some Rs 120 billion, which is exacerbating the shortage of electricity generation. The government’s strategy for meeting the energy crisis, comprising short- medium- and long-term measures, appears to have run aground at the first hurdle, the Rental Power Projects’ scandal-hit effort. Independent Power Projects, representing the medium-term component of the strategy, appear to be crawling along in implementation. The long-term component of dams, prime being the Bhasha Dam, are stuttering because of financial constraints and the difficulties of generating the finance at affordable cost from the international donors. Renewable energy is still an infant that has to grow teeth before it can make any kind of impact.

While Pakistan, dependent as it is on oil imports, can do little about the spike in international prices of POL, what is conspicuous by its absence is any semblance of a strategy or campaign to conserve energy, which logically would seem to suggest itself as a demand dampener. The energy crunch has impacted industry and commerce seriously, with factories closing down or functioning at low capacity, and trade too suffering customers turning away because of inconvenience and the inflationary spiral biting deep into their purchasing power.

The struggle against terrorism and the open declaration of war against Pakistan by the Tehreek-i-Taliban Pakistan and al Qaeda have led to the worst security climate within memory. Let alone foreign investors, even domestic investors are shy and some have despaired of the interminable security and energy crises to shunt their capital to more salubrious climes abroad. Terrorism is the illegitimate, but inevitable child of the misplaced jihadi enterprise beloved of our military establishment for the last four decades, whose chickens have by now come home to roost with a vengeance. There are growing calls for revisiting this policy, but so far it appears, despite the setbacks in Abbottabad and Karachi, that the military’s point of view is set in stone, despite its own, and the people’s grave losses. Inevitably, Pakistan does not have a hope in hell of attracting any kind of investment, domestic or foreign, unless peace is restored by taking out the terrorists without discrimination or being waylaid by spurious notions of ‘good’ and ‘bad’ Taliban.

Last but not least, the State Bank of Pakistan’s (SBP’s) tight monetary policy and maintaining high interest rates, ostensibly to keep inflation in check, is clearly not working to keep a lid on prices. Inflation officially rose to 12 percent, although this figure is disputed by independent analysts as well as empirical evidence. Since core inflation is related to food prices, the impact of the high interest rates has been to dampen private sector borrowing, crowded out as it is further by government’s dipping into the SBP and commercial banks’ coffers.

On the eve of the budget, the government needs to prioritise the elimination of the bottlenecks listed above to the revival of the economy through visionary, creative, out-of-the-box thinking, not the clichéd and failed nostrums of the international lending agencies and the western governments that swear by them.

Pakistan,Budget more a burden than relief

Daily Times
The Pakistan People’s Party-led coalition government in the Centre unveiled its fourth budget with an outlay of Rs 2.767 trillion for the next fiscal year, 2011-12, in parliament on Friday. The budget outlay is some 14.2 percent higher than the last financial year’s budget.

The federal budget contains less relief measures against the additional burden of around Rs 600 billion on the general populace, specially consumers, say independent economists.

They say that the government has slashed the amount of subsidies from Rs 395.801 billion in 2010-11 to Rs 166.448 billion in 2011-12, a decrease of Rs 229.353 billion, which would force a hike in prices of electricity and essential items.

They are of the view that the additional tax revenue to the tune of Rs 365 billion, which would be generated in the next fiscal year, 2011-12, with a total tax collection at Rs 1.952 trillion, would result in inflation as the business community would pass on this tax burden to the consumers.

The federal government has estimated that in case the provinces helped it by saving Rs 125 billion or creating budget surplus then the budget deficit will remain at Rs 850 billion.

But, if grants from foreign donors are not received, then the budget deficit will reach Rs 974 billion in 2011-12.

The deficit would be met through local and external financing.

Federal Minister for Finance Dr Hafeez Sheikh presented the federal budget and outlined its salient features during his speech in the National Assembly.

Gross revenues of the federal government have been estimated at Rs 2.732 trillion, which include Rs 2.074 trillion from tax revenues and Rs 658 billion from non-tax revenues.

After payment of Rs 1.203 trillion to the provinces, revenue share in federal taxes under the 7th National Finance Commission Award, the federal government’s next revenue receipts would come down to Rs 1.529 trillion in 2011-12.

Net capital receipts of the federal government have been estimated at Rs 369 billion, external receipts Rs 414 billion while provinces will create a budget surplus of Rs 125 billion for keeping the budget deficit at 4 percent of the GDP. The federal government would borrow Rs 304 billion from banks to finance the deficit.

Current expenditures of Rs 2.315 trillion of the federal government during 2011-12 would include Rs 791 billion for repayment of interest on domestic and foreign loans and Rs 243 billion on repayment of foreign loans.

Some Rs 96 billion would be spent on payment of pension to retired employees of the federal government. A sum of Rs 495 billion would go to the armed forces. Rs 295 billion would be spent on grants and transfers to the provinces.

Some Rs 166 billion have been earmarked for subsidising the goods and services for the population of the country. Provision for increase in salaries and pension has been made at Rs 25 billion for 2011-12.

Development expenditures of the federal government will be Rs 452 billion which include Rs 300 billion for federal public sector development programmes and Rs 55 billion for development loans while grants to the provinces and other development expenditures have been estimated at Rs 97 billion.

The government has decided to increase its employees’ salaries by 15 percent and pension by 15 to 20 percent.

The government has increased the income tax exemption limit from Rs 300,000 to 350,000 to facilitate low-salaried class. Fifty percent tax exemption on income over and above of basic exempt income of Rs 350,000 for senior citizens have also been announced.