Wednesday, October 2, 2013
President Barack Obama on Wednesday scrapped part of a long-planned trip to Asia and left the remainder of the trip in doubt as a U.S. government shutdown went into a second day with no end in sight to the funding battle in Congress that triggered it. Obama scuttled two stops on a planned four-country tour and left visits to two other countries up in the air, according to White House statements. The president told his counterparts in Malaysia and the Philippines he would not be able to meet them as planned and a White House official said the president is weighing whether to attend diplomatic summits in Indonesia and Brunei. "We will continue to evaluate those trips based on how events develop throughout the course of the week," National Security Council spokeswoman Caitlin Hayden said. Obama was originally due to leave the United States on Saturday and return a week later. Not only must the president deal with the budget impasse and its effects, but he faces an even bigger crunch in Congress, which will put the United States at risk of defaulting on its debts if it does not raise the limit on U.S. public debt. Treasury Secretary Jack Lew has said the United States will exhaust its borrowing authority no later than October 17. The fight between Obama's Democrats and the Republicans over the government's borrowing power is rapidly merging with the standoff over everyday funding, which has forced the first government shutdown in 17 years and sent hundreds of thousands of federal employees on unpaid leave. The White House announcements about the Asia trip followed a fruitless day on Capitol Hill, with congressional Democrats and Republicans coming no closer to resolving their differences. Obama accused Republicans of taking the government hostage to sabotage his signature healthcare law, the most ambitious U.S. social program in five decades, passed three years ago. Republicans in the House of Representatives view the Affordable Care Act as a dangerous extension of government power, and have coupled their efforts to undermine it with continued efforts to block government funding. The Democratic-controlled Senate has repeatedly rejected those efforts. The standoff has raised new concerns about lawmakers' ability to perform their most basic duties and threatens to hamper a still fragile economic recovery. "This is a mess. A royal screw-up," said Democratic Representative Louise Slaughter of New York. LANDMARKS CORDONED OFF As police cordoned off landmarks such as the Lincoln Memorial, and government agencies stopped activities ranging from cancer treatments to trade negotiations, Republicans in the House sought to restore funding to national parks, veterans' care and the District of Columbia, the capital. An effort to pass the three bills fell short on Tuesday evening, but Republicans plan to try again on Wednesday. They are likely to be defeated by the Democratic-controlled Senate. "That's important - a park? How about the kids who need daycare?" said Democratic Representative Sander Levin of Michigan. "You have to let all the hostages go. Every single one of them." The setback to the Asia trip, designed to reinforce U.S. commitment to the region, is the first obvious international consequence of the troubles in Washington. "They've shut down the government over an ideological crusade to deny affordable health insurance to millions of Americans," Obama said on Tuesday. Republicans said Obama could not complain about the impact of the shutdown while refusing to negotiate. "The White House position is unsustainably hypocritical," said Michael Steel, a spokesman for House Speaker John Boehner. A Reuters/Ipsos poll indicated that 24 percent of Americans blamed Republicans, while 19 percent blamed Obama or Democrats. Another 46 percent said everyone was to blame. COOLING OFF PERIOD? All three bills won support from a majority of the House, but fell short of the two-thirds vote needed to pass under special rules that allow quick action. Republican leaders plan to bring up the bills for a regular vote on Wednesday. Obama said he would veto the bills if they reached his desk. The selective spending plan appeared to temporarily unite Republicans, heading off a split between Tea Party conservatives who pushed for the government funding confrontation and moderates who appear to be losing stomach for the fight. Representative Peter King, a New York moderate, estimated that more than 100 of the chamber's 232 Republicans would back Obama's demand to restore all government funding without conditions. That would be enough to easily pass the House with the support of the chamber's 200 Democrats. "They're afraid to go forward because they're afraid of a primary," he said on MSNBC's "Morning Joe" program, citing the fear of retribution at the polls ahead of the 2014 midterm election from possible challengers from the Tea Party, the conservative Republican movement advocating limited government. King urged Obama to do more, saying there could be room to negotiate and combine the current spending bill with a deal on the debt ceiling if the president offers Republicans something, such as lifting the healthcare law's tax on medical devices. "It's time for the president to come in right now," he said. House Democratic Whip Steny Hoyer also saw potential for a plan that could buy a "a cooling off period" of about six weeks. "We may be getting to a place where there's going to be enough rational Republicans to join with the Democrats and pass ... a continuing resolution which will fund government, get us open," he told CNN's "New Day" program. The shutdown closed landmarks including access to the Grand Canyon and pared the government's spy agencies by 70 percent. In Washington, the National Zoo shut off a popular "panda cam" that allowed visitors to view its newborn panda cub online. In Pennsylvania, white supremacists had to cancel a planned rally at Gettysburg National Military Park. MARKET REACTION Stock investors on Wednesday appeared to show growing anxiety on over the standoff after taking the news in stride on Tuesday, with Wall Street expected to open 0.6 percent lower and the U.S. dollar continuing to fall. The U.S. Treasury has also been forced to pay the highest interest rate in about 10 months on its short-term debt as many investors avoided bonds that would be due later this month, when the government is due to exhaust its borrowing capacity. A short-term shutdown would slow U.S. economic growth by about 0.2 percentage points, Goldman Sachs said on Wednesday, but a weeks-long disruption could weigh more heavily - 0.4 percentage points - as furloughed workers scale back personal spending. The last shutdown in 1995 and 1996 cost taxpayers $1.4 billion, according to congressional researchers. The political crisis has raised fresh concern about whether Congress can meet a mid-October deadline to raise the government's $16.7 trillion debt ceiling. Some Republicans see that vote as another opportunity to undercut Obama's healthcare law. Failure to raise the debt limit would force the United States to default on its obligations, dealing a blow to the economy and sending shockwaves around global markets. A 2011 standoff over the debt ceiling hammered consumer confidence and prompted a first-ever downgrade of the United States' credit rating. Analysts say this time it could be worse. Lawmakers back then were fighting over how best to reduce trillion-dollar budget deficits, but this time they are at loggerheads over an issue that does not lend itself to compromise as easily: an expansion of government-supported health benefits to millions of uninsured Americans. Republicans have voted more than 40 times to repeal or delay "Obamacare," but they failed to block the launch of its online insurance marketplaces on Tuesday. The program had a rocky start as government websites struggled to cope with heavy online traffic.
Christians make up only 2 percent of the population of Pakistan, but the country's colonial past makes the religious minority a target for grievances against the West. Fred de Sam Lazaro reports that suicide bombings, attacks on churches and a law against blasphemy have left Pakistani Christians living in fear.
In one week alone, the frontier city has seen nearly 150 killed in three separate bombings, and yet somehow its residents muster the will to carry on n Sept. 29, Naveed Qureshi was sitting in his shoe store in Peshawar’s historic Qissa Khawani market when it was shaken by a huge explosion outside. “All we could see was fire,” he says. “And there were piles of bodies, and body parts, everywhere.” A car bomb, packed with over 200 kg of explosives, phosphorus and artillery shells, had blown up, killing 43 and badly damaging a mosque. “In just one family,” says a stunned Qureshi, “17 people were killed, only a few days before the son was to get married.” The ancient Qissa Khawani Bazaar, or the Storyteller’s Market, derives its name from a time centuries ago, when troubadours regaled itinerant traders and warriors here with tales of heroism and love. Much later, some of its denizens later crossed into India to become famous fablemakers in the world’s largest film industry. In the narrow streets, speckled by what little sunlight falls between the old, densely packed buildings, are the former homes of Bollywood legends Dilip Kumar and Prithviraj Kapoor, patriarch of the famous acting clan. Now, shopkeepers sit on the empty streets, in the shade of the bazaar’s elegant decrepitude, to sip tea and trade tales of anguish. Zafar Yab, another shoe-store owner, hasn’t even surveyed the damage to his business yet. “I haven’t had the time,” he says. “Since Sunday’s bombing, I’ve been doing the rounds at hospitals and graveyards. We forget about it, we forget and brace ourselves for the next one. That’s how we cope.” The atrocity at Qissa Khawani was the third major attack on Peshawar in a week, leading to the loss of nearly 150 lives and over twice as many wounded. On Sept. 22, two suicide bombers attacked the nearby All Saints Church, killing over 80 parishioners. On Sept. 27, a bus carrying government employees on its way to the city was bombed, killing 20. Then it was Qissa Khawani’s turn — again. “It is the fifth time in recent years this market has been attacked,” Yab says. “And there have been nearly a dozen attacks within the gates of the old city.” He has no faith in the police. “Two days before the bombing, they came and told us that a car was wandering around,” he recalls. “They said, ‘Protect yourselves.’ Can you believe it?” Since a new government came to power in Pakistan in June, there has been, on average, one terrorist attack a day. These have struck across the country, but have been mostly centered on the strife-torn northwest province of Khyber Pakhtunkhwa, of which Peshawar is the capital. Last month, Prime Minister Nawaz Sharif and the country’s other political leaders united behind a push to negotiate a settlement with the Pakistani Taliban and their affiliates. But as the near-daily violence shows, the militants aren’t willing to talk. In fact, they are taking advantage of the government’s overture — seizing the opportunity to lay siege to the storied and strategically located frontier city of Peshawar, on the edge of Pakistan’s tribal areas. When the attack on Qissa Khawani took place, worshippers at the 19th century All Saints Church were having their first service since the massacre of over 80 of their number the week before. “Everyone screamed in panic,” says Farrukh Jalil, a nurse and a parishioner. “They thought it was happening all over again.” The clock on the wall of the church still says 11:43 — the time the church was bombed. Remarkably, its elegant arches and vaulted ceiling remain well preserved. Outside, there is a shrine of remembrance, surrounded by photos of those killed in the attack on Sept. 22, the worst single tragedy to befall Pakistan’s tiny and beleaguered Christian community. Jalil helped carry bodies to another 19th century landmark nearby, the Lady Reading Hospital. When the dead arrived, Dr. Shiraz Afridi, the director of emergency services, was there. “There was a big panic,” says Afridi, a U.S.- and U.K.-trained physician. “Ambulances were overflowing, and bodies were arriving even in rickshaws and on man-driven carts.” The hospital, a sprawling redbrick building with neatly manicured lawns, located next to a vast Mughal military fort, has been struggling to cope with the frequent bombings. “We’re the busiest emergency center in the world,” the burly doctor says. “We have seen up to 3,000 patients a day.” With limited resources — there are only 100 beds — the doctor must weigh up life in an instant. Those who can walk aren’t a priority. Those close to death are put to one side. “Our focus is trying to save the lives of those in between,” Afridi says. He has overseen the emergency response to more than 120 terrorist attacks and is depressingly familiar with the havoc they cause. “By looking at the wounds,” he says, “I can now tell whether it was a suicide blast.” Like the shopkeepers of Qissa Khawani, he does what he needs to do, forgets for a while, and then braces for the next one. Read more: http://world.time.com/2013/10/02/pakistans-terror-capital-inside-peshawar-a-city-under-siege/#ixzz2gZWU80FL
The State Bank of Pakistan made a startling disclosure before a parliamentary committee on Tuesday that $25 million in foreign currency was illegally flowing out of the country each day from airports and that was perhaps one major reason for the recent battering of the rupee. “About $25 million foreign exchange goes out every day from Quetta, Islamabad, Lahore and Karachi airports and we are signing an MOU with the Federal Investigation Agency to check suitcases to control this and plug holes,” SBP Governor Dr Yasin Anwar told the Senate Standing Committee on Finance. Mr Anwar made the statement when senators raised questions about the government’s policy to restore people’s confidence in the rupee that had been losing its value for several weeks, leading to excessive dollarisation. “Even property dealers and big stores are doing business in dollars,” said Senator Haji Adeel of ANP. At the committee meeting presided over by Senator Nasrin Jalil of MQM, Usman Saifullah Khan and Sughra Imam of PPP wanted to know the reason behind Prime Minister Nawaz Sharif’s recent meeting with Hungarian-American billionaire George Soros who they alleged was one of the leading global currency speculators and had played havoc with Southeast Asian economies in the 1990s. “We should also know who advised the prime minister for this meeting,” Senator Saifullah said. The official response was that Mr Soros had no presence in Pakistan’s currency market but he had made some philanthropist contributions and his meeting with the prime minister was part of an interaction with leading international investors. Senators criticised the government’s priorities, particularly providing $5 billion to IPPs instead of using the amount for development of hydropower projects like Bhasha dam, Dassu dam and Neelum Jhelum project where only nominal allocations were being made. Secretary Finance Dr Waqar Masood Khan described the perception of dollarisation as baseless and said there was no evidence to prove that payments were made in foreign currency. He said the government was working to synchronise the anti-money laundering law with anti-terrorism financing to comply with international standards. The SBP chief said economic policies were always designed for longer-term objectives and should not be assessed on the basis of short-term problems. He said the central bank was not a law-enforcement agency which could take direct action. But, he pointed out that its vigilance on market moves had led in the past to FIA’s actions against Khanani & Kalia and Zarco Exchange. The flight of capital has always been a major pressure on foreign exchange reserves and exchange rate but such outflows were previously estimated at between $5-10 million a day. The revelation by SBP governor puts the amount of outflows by illegal means at a staggering $750 million a month or $9 billion a year — almost equivalent to the country’s total foreign exchange reserves. Dr Anwar did not agree that the recent steep fall in the value of the rupee to Rs110 against the dollar was a regular feature because of withdrawal from foreign currency accounts. He said the rupee had touched its lowest point only for two minutes during which only $11.3 million was misappropriated. He said he had already held a meeting with banks and punishments had been decided against banks involved in the inappropriate activity. He said the government and the central bank were being criticised for a single day fall in the value of the rupee but the critics did not appreciate the fact that the SBP managed the foreign exchange position from March to June, when a major transition was taking place from one political government to the interim government and to a new elected government despite predictions of crisis and defaults by major commentators. He said the government’s decision to reach a bailout agreement with the International Monetary Fund (IMF) was taken at a suitable time because of outstanding foreign repayments of $6.6 billion when major multilateral lenders like the World Bank and the Asian Development Banks had stopped extending loans for development. This led to improved market sentiments and positive comments from international rating agencies. He said parliamentarians should not compare the handling of exchange rate issue with India where 75 per cent banks were state-run, while in Pakistan 80 per cent banking was in the private sector. As senators criticised the economic team for allowing the IMF to take micro-level decisions, both the secretary finance and the central bank governor said daily, weekly and monthly reporting of economic data to IMF was a prerequisite for all member countries but this compliance became strict when a nation adopted to have an IMF programme which was neither unusual nor a Pakistan specific condition. Senator Sughra Imam expressed concern that policy-makers did not offer any incentive to people for keeping rupee deposits in banks and as a result savings were being diverted to foreign currency accounts for the sake of profits because of declining exchange rate. She asked why foreign exchange deposits were not subjected to taxes like the rupee accounts. “They are earning profits just by holding dollars in their accounts.” UNCERTAIN INFLOWS: The senators criticised the government for banking on uncertain foreign exchange inflows through auction of 3G telecom licences, PTCL proceeds from Etisalat and coalition support fund (CSF) from the US which had not materialised over the past four years. Secretary Waqar Masood said appointments to key positions in Pakistan Telecommunication Authority had been made and soon the matter would be pushed forward. He said Finance Minister Ishaq Dar had taken up the issue of PTCL proceeds with Etisalat. He said out of $1.4 billion CSF inflows expected this year, about $325 million would be disbursed before Oct 15, although these were earlier expected in the first quarter of the fiscal year.
Ever since the May 2013 general elections, average Pakistanis seem to be in for their fair share of bad luck and economic misery. This is because the current dispensation headed by Prime Minister (PM) Nawaz Sharif and his party, the PML-N, has seen fit to lump one financial hardship after another on the backs of the public with no end in sight to the debilitating economic policies emerging from the corridors of power. The latest financial bombs to hit the people are the whopping increases in prices of petroleum products and the per unit increase in electricity tariffs, leaving the people to feel even more frustrated and vulnerable than they did before. Electricity prices have spiralled to as much as a 30 percent increase and oil products have gone up by about 4.2 percent from October 1, 2013. To say that this is a massive shock for an already overburdened public is putting it lightly. These price hikes have the potential to cause the complete collapse of the already overburdened average citizens. They are already burdened by extreme inflation, added taxes heaped onto those already heavily taxed, natural calamities occurring nearly every year, almost daily terror attacks and bombings. Add all these up and you have a recipe for absolute disaster. It seems the government is hurtling towards making this a doomsday scenario. The usual rhetoric, whenever we see an increase in the price of POL products, is that the Oil and Gas Regulatory Authority (OGRA) raises or lessens — although one hardly ever sees a substantial decrease — prices in line with the international market trends. Well, if this is true, then it must be quite embarrassing for the government that on the day it announced the price hike in POL products, the Indian authorities announced a decrease in the prices of their petroleum products. So, which country is actually following international market trends, the country that chooses to ease its people’s woes or the country that chooses to further enhance them? The government of Nawaz Sharif has taken this particular step too quickly, increasing the costs of two major sectors together in one go, leaving little to no room for people to adjust to increased economic hardships. It is common knowledge that with this electricity and petroleum price hike, the cost of everything will increase. With this added inflationary pressure across the board, businesses will plummet and transporters and businessmen will first protest and then pass on the burden to the public. For most common citizens, this will be a policy that will seal their fate. The entire nation’s fate has been rendered bleak with this government, once again, leaning on the International Monetary Fund (IMF) for support. At first, the government was hesitant to admit that it had accepted stringent conditionalities dictated by the IMF for the latter’s loan of $ 6.5 billion. But with this heavy price hike, it is apparent that the IMF is telling the government exactly what to do and how to do it — remove all subsidies in ‘shock and awe’ style. It is well known that IMF terms tend to be deflationary and austerity is their ‘one size fits all’ nostrum. What the government needs to be doing instead is encouraging business, investment and economic revival instead of taking to task the millions of common Pakistanis. There is only so much the people will be willing to take, given the anti-people thrust of the present economic policies.
Monday saw the worst autocratic rule in the country when the federal government bypassed the National Electric Power Regulatory Authority (NEPRA)—the regulatory body of electricity – to make a massive increase of 210 per cent in the power tariff for domestic consumers effective. With same stroke of pen, the government increased the prices of petrol, diesel and other petroleum products. Meaning thereby the fuel budget of every house—be it is of the poor, rich or industry-- will be multiplied, causing a major jack-up in the input cost of every sector. Justifying its reckless act, the government has given some relief for the poor. Notwithstanding what it had offered to the poor, the fact is that the oil and power that constitutes fundamental ingredient of input of agricultural and industrial sector, the price of every house-hold item will be jacked up which will nullify the so-called and eye-wash relief offered to the poor in the minimum slab on power consumption. Every human being living in Pakistan will be facing more financial constraints as he will be paying more on anything he will consume. Apart from price-hike that the massive jack-up in power and oil prices will also trigger a unprecedented inflation. There is every chance that the industrial sector will face severe liquidity crunch that may bring industrial wheels to a grinding halt that for sure will result in more unemployment. A significant proportion of the population already living below poverty line will be pushed to starvation and the middle class that is considered to be the main stray of the economy will also shed their buying power. Resultantly, the worst recession in the market is inevitable. The government decision to make autocrat increase in the power and oil prices is the worst act that even a dictator cannot dare to implement. But the so-called peoples’ representatives have made mockery of the confidence the Electoral College that voted them to power, and after assuming power, the incumbent rulers have grown bigger than their size hence ignoring the national institutions—be it is the NEPRA or the Parliament—in making the decision of national importance. Considering themselves unquestionable, the rulers are adopting short-cuts to squeeze out money from the hapless masses rather than carrying out remedial measures of eradicating massive corruption, high ratio of line losses, overstaffing and unmanageable perks & privileges to the WAPDA employees. On the top of it, the able leadership did not launch drive to recover a receivable amount Rs 441 billion rather opted short-cut to generate total revenue of Rs 941 billion during one year on the call of their international financial managers sitting in the IMF. The international donours may find the increase in power tariff satisfactory to shower some words of praise on the rulers but the reckless act of the government will surely spell economic disaster for the country and make life of common man a living hell. Particular if the government continued to pass the burden of its incompetency and bad management of the state-run institutions to consumers who paid their dues regularly. The recent increase is designed to raise an additional revenue of Rs175 billion against the IMF demand of doing away with the power subsidy of Rs396 billion. Even earlier, the circular debt was paid off by burdening the common man—the decision that experts perceived as ultra-constitutional. it is advisable here that the country’s managers should revamp the existing system to make efficient and cost effective rather than fleecing consumers through direct increase prices and indirect increase in taxation on it, befooling the poor with slabs of benefits. By no means, new slabs on power tariff will extend any breather to the poor. Soon the wrath of the tariff-hike will echo in the power corridors let the power bills reach the masses later this month. Similarly, the petrol is fuel of the poor. Unfortunately, again the petrol price is jacked up the maximum while the jet fuel for the rich gets a minimum push. The increase is simply too much, thus the government should revise its oppressive decision before it echoes on streets and roads in mass protests.