Sunday, November 25, 2018
#Pakistan - The winter of our discontent
Dr Pervez Tahir
Whether the government accepts a bailout on the IMF’s conditions or not, inflation is high and on a rising trajectory following the hike in energy prices.
In 1976, the British government was forced to seek an IMF loan to stabilise the value of the pound sterling. In two years, it led to what is known as The Winter of Discontent. Inflation could not be brought down. There were strikes against pay cuts and other austerity measures. The anti-labour policies of a Labour government paved the way for Thatcher the Milk Snatcher.
In Pakistan, the winter has set in. Is it going to be the winter of our discontent? A government team has been negotiating with an IMF team to agree to the terms of a stabilisation package. Whether the government accepts a bailout on the IMF conditions or not remains to be seen. What is, however, apparent is that inflation is high and on a rising trajectory following the hike in energy prices to make up for the past under-pricing, double-digit depreciation of the rupee and increased import and regulatory duties on a large number of items. Following its calendar, the Pakistan Bureau of Statistics (PBS) announced an increase of 7 per cent in the Consumer Price Index (CPI) for October 2018, compared to 3.8 per cent in October 2017.
It seems the finance minister panicked and questioned the estimate. Although the PBS was taken out of the control of Ministry of Finance by former prime minister, Shahid Khaqan Abbasi, it seems the organisation continues to be a pushover. With no minister, no secretary, no chief statistician and no member in-charge of economic statistics, the PBS quickly obliged and the CPI was “rationalised by adjusting seven slabs of gas prices introduced by OGRA into five slabs of CPI methodology adopted by PBS” to 6.8 per cent. For 0.2 percentage points, the integrity and the transparency of the system was put at stake.
Not content, he blamed the media for ignoring the low rate of inflation for the lowest income group. True, the price increase for the lowest quintile is 3.94 per cent against the overall inflation rate of 6.78. However, this overall increase for the lowest quintile hides significant increases in some sensitive groups of commodities. The group including housing, water, electricity, gas and other fuels recorded an increase of 5.77 per cent. Transport, where the oil price rise hurts most, went through the roof at 22.12 per cent. It was higher than all the other four quintiles. At 6.84 per cent, clothing and footwear was also the highest for the lowest income group.
Education and health present an interesting story. In the cost of education, all quintiles faced a double-digit rise but the lowest income quintile experienced a higher increase than the highest income quintile. Health cost increases with increase in income, but an increase of 8.62 per cent for the lowest income quintile is very high. Mercifully, the food price index increase for the lowest income quintile was less than one per cent.
A serious problem with the CPI is that it only covers urban areas. According to a recent World Bank report, “State of Water Supply, Sanitation and Poverty in Pakistan”, 80 per cent of the poor live in rural areas. The lowest income quintile of the CPI thus reflects the rising cost of living faced by the urban poor. One also needs to keep in mind the income levels defining the various quintiles. Those making up to Rs8,000 fall in the first quintile and the second quintile covers earners from Rs8,001 to Rs12,000. Although these are also the groups considered in the estimation of the official poverty line, the amount is less than the poverty line as well as the minimum wage when compared in real terms.
Education and health present an interesting story. In the cost of education, all quintiles faced a double-digit rise but the lowest income quintile experienced a higher increase than the highest income quintile. Health cost increases with increase in income, but an increase of 8.62 per cent for the lowest income quintile is very high. Mercifully, the food price index increase for the lowest income quintile was less than one per cent.
Come to think of it, the third and fourth quintiles of Rs12,001 to Rs18,000 and Rs18,001 to Rs35,000 do not really correspond to the upper income groups. In the top group of Rs35,000 and above, sky is the limit.
The closest indication of how the wretched of the earth are doing is provided by the Sensitive Price Indicator (SPI). It comes out every week and focuses on price changes in 53 essential items in 17 major cities. It has the same five income quintiles as the CPI. At the time of writing, the latest data for the week ended on November 15, 2018 showed an annualised increase of 5.71 per cent for the SPI combined for the five quintiles. It was the highest in ten weeks. For the lowest quintile, it was lower at 1.69 per cent, though the second highest in ten weeks. On November 22, 2018 the National Electric Power Regulatory Authority announced a hike of 47 paisa per unit in the electricity tariff on account of fuel cost adjustment. While it will impact upon the overall CPI, the lowest income quintile will not be affected due to the exemption given to the lifeline consumers.
Specific prices may matter to individuals and groups, but the State Bank has to worry about inflation, a macro indicator. It is concerned that core inflation, the non-food non-energy component of CPI, increased by 8.2 per cent in October 2018 compared to 5.3 per cent in October 2017. During the same time, another measure of core inflation, 20 per cent weighted trimmed mean CPI increased by 6.7per cent compared to 5.8 per cent. A core inflation jump that is well above the headline (overall CPI) inflation reflects the underlying inflationary pressures in the economy. Consequently, the real interests are falling.
To contain this demand pull, the State Bank had increased its target policy rate by 100 bps to 8.5 per cent in September. With the high expectations of support from friends and the diminishing necessity of finalising a stabilisation package with the IMF, the upward adjustment of the policy rate in the next monetary policy statement may be just 50 bps to make it 9 per cent. So the interest rate and the inflation rate are still away from the double-digit territory.
In addition to CPI and SPI is the WPI, the Wholesale Price Index. In July-October 2018-19, the WPI inflation was as high as 10.97 compared to a mere 1.39 per cent in the corresponding period of the previous year. This is way above the CPI inflation of 5.9 per cent and SPI inflation of 2.29 per cent. In October, the WPI inflation was even higher at 13.12 per cent. The situation in the previous two years was the reverse of it, with CPI inflation higher than the WPI inflation. Does this reversal have any serious implications for the future course of inflation?
In a State Bank study, Arby and Ghauri investigated the relationship between WPI and CPI to conclude that “both the CPI and WPI cause each other, as against the general perception that only CPI follows WPI. However, in case of food group, we can expect consumer prices of food items to follow changes in wholesale prices.” In the recent surge in CPI and WPI, food group is not a significant contributor. As food matters most to the lowest income quintiles, the winter is less likely to see much discontent.
#Pakistan - AITZAZ EHSAN TERMS SLOGAN OF CHANGE A DREAM NOT REALITY
The senior leader of Pakistan Peoples Party (PPP) Aitzaz Ahsan said that the first 100-day plan of PTI government was only a show off as there was no reality behind slogans of change.
Aitzaz Ahsan said that the 100-day plan has been a reason for embarrassment to the government.
Ahsan said that the PTI should not have made tall claims because no government can reach its goals only within the initial 100 days of coming to power.
Talking to media in Lahore, In a statement, Senator Aitzaz Ahsan claimed that PTI government has not the ability to bring the change and all its promises nothing more than delusion.” I am not happy over sending anyone to jail, however, Nawaz Sharif statements show that his escape from sentence not possible,” he said.
He mentioned that first Nawaz Sharif told the parliament details of his means of income and now he was drifting from his stance.
https://www.suchtv.pk/pakistan/general/item/77731-aitzaz-ehsan-terms-slogan-of-change-a-dream-not-reality.html
Opinion | Pakistan continues to support terrorism
Kamal Davar
As India observes the 10th anniversary of the ghastly Mumbai terror attack on 26 November 2008, which resulted in 166 fatalities including of foreign tourists and over 600 injuries, certain misgivings continue to agitate the minds of its concerned citizens and the security establishment alike.
For decades, India has been the target of deliberate, well-planned Pakistani sponsored terrorism. Though India’s financial capital, Mumbai, has been a chosen destination for terror acts earlier too in 1993 and the Mumbai train massacres in 2006, those four horrific days of 26-29 November 2008 shook the nation and many civilized countries around the world. In matters of counter-terrorism endeavours, India woke up from its traditional languorous slumber, to a large extent, as it laboured to counter its own version of the infamous 9/11 terror strike on the American homeland. Was it a failure of intelligence, inadequate response mechanisms or, importantly, a systemic failure of the Indian security establishment? The candid answer lies in a combination of all these factors which resulted in this attack.
In today’s increasingly troubled world, terrorism remains an ever burgeoning scourge outwitting advanced nations and their security forces time and again. Terrorism has explicitly developed into a rabidly dangerous reality with an expanding footprint, both regional and globally. The South Asian region, thanks to the original perpetrator of global terror, Pakistan, remains a hotbed of this plague, with no end in sight owing to continuing Pakistani machinations in India and Afghanistan. To Pakistan, the employment of terror as an extension of state policy appears to be more than a productive stratagem. Regrettably, Pakistan persists with its myopic and self-destructive terror policies in the region, continuing to foment terror in J&K, parts of the Indian hinterland through Nepal and, to some extent, in the north-east via Bangladesh.
To successfully ward off cataclysmic events, a hard-nosed study and detailed addressal of the many professional and preparedness shortcomings which contribute to the likelihood of such occurrences is an imperative which security agencies can only disregard at the nation’s peril. It is the considered view of many security analysts that Indian commercial, public, military and other iconic, high-value institutions and infrastructure—perennial and lucrative targets for Pakistan-sponsored terror—have to have their security preparedness of the desired order to be vastly buttressed.
Global problems beckon global solutions. With terrorism now a common threat confronting like-minded nations, intelligence sharing between friendly nations is sine qua non. To a large extent, especially after 26/11, the US intelligence community has established professional links with their Indian counterparts. Though some level of intelligence sharing does exist with certain friendly nations, India must forge far more deliberate intelligence cooperation with intelligence agencies of terror-afflicted nations like the UK, France, Russia, Afghanistan, Iran, Bangladesh and the Central Asian Republics. Though it is not a simple affair to develop seamless coordination resulting in speedy sharing of hard, actionable intelligence with foreign agencies, the criticality of effective counter-terrorism interoperability requires the same. Thus, India must take the lead with like-minded security outfits to get them on the same page. UN protocols on counter-terrorism and agencies like Interpol and the Paris-based Financial Action Task Force must endeavour towards greater cooperation to combat the common enemies of humanity.
Looking inwards, it is endemic with some intelligence agencies in India to try and be ‘one up’ on each other by not fully sharing their inputs with sister institutions. This malaise, where existing, must be rooted out by the NSA. In addition, it is common knowledge that terrorists today are not merely in rag-tag outfits but with advanced technology and continually improving modern weaponry and tools to support their nefarious designs. Thus, security agencies have to keep abreast of all technological innovations taking place. As the nation endeavours to improve its technical intelligence capabilities in its myriad applications, human intelligence capabilities need also to be sharpened.
A large number of terror outfits are labelled as ‘non-state’ actors which is a stark misnomer as some of the nations they are located in are supporting these terror conglomerates. In the case of Pakistan, its notorious spy agency, the ISI, funds, trains and equips a large number of these terror ‘tanzeems’ such as the Hafiz Saeed-led Lashkar-e-Taiba which carried out the Mumbai attacks under its watchful eye, the Jaish-e-Mohd, Harkat-ul-Mujahideen, and Sipaha-e-Sahaba, among others. US President Donald Trump’s recent imposition of financial sanctions on Pakistan for its duplicity in the war on terror was a long overdue measure. Similarly, Indian financial intelligence set-ups must keep a hawk’s eye on suspicious financial transactions from abroad to accounts in India.
As Pakistan displays no signs of mending its ways, the Indian security establishment must factor in its preparedness the ever-looming and innovative terror threats from Pakistan and its proxies. Thus, for India, eternal vigilance and security upgrades remain the price to pay to fire-wall itself from terrorism.
https://www.livemint.com/Opinion/rfrOaGi0Fw9hismdauzrzJ/Opinion--Pakistan-continues-to-support-terrorism.html
WHY ARE SEPARATIST MILITANTS VIOLENTLY TARGETING CHINESE IN PAKISTAN?
BY MURTAZA SOLANGI
Separatist militants who oppose Chinese investment in western Pakistan have claimed responsibility for the attack on the Chinese consulate in Karachi on Friday. At least four people were killed when three gunman belonging to the Balochistan Liberation Army (BLA) tried to enter the consulate at about 9.30am local time. No consulate staff were harmed in the attack, and all three militants were shot dead by police.
BLA is one of a number of militant groups formed in the mid 1970s among the Baloch people, an ethnic group found in parts of Pakistan, Iran, and Afghanistan. Its leadership and areas of influence have evolved with the passage of time. Most analysts insist that the BLA is currently led by Harbiyar Marri, son of the late Khair Bakhsh Marri.
Harbiyar, who lives in London, has denied leading the group. Other prominent Baloch militant groups include the Balochistan Liberation Front (BLF), led by Allah Nazar, and the Baloch Republican Army (BRA), led by Brahumdagh Bugti, the grandson of Akbar Bugti, who was killed during a military operation in 2006.
The exact numerical strength of the BLA is not known. Most analysts agree that the group comprises several hundred members who operate in the province of Balochistan as well as neighbouring Afghanistan. Until now, the group’s biggest targets have been the Pakistani military and workers hailing from other provinces, mostly Punjabis. Pakistani authorities have routinely blamed India for supporting the BLA and other Baloch militant groups, which New Delhi has denied. On Saturday, Zhao Lijian, Deputy Chief of Mission of the Chinese embassy in Islamabad, accused an Indian journalist, Aditya Raj Kaul, of “glorifying terrorists” after he posted a video of the alleged gunmen on Twitter. Kaul hit back on Twitter, saying the diplomat needed “urgent psychiatric treatment” and his country did not understand the meaning of a free press.
While the BLA and other militant groups do pose a security threat, they are not seen to have the wherewithal to defeat the Pakistani military or run over the province. Nevertheless, they remain a serious impediment to the development of the China – Pakistan Economic Corridor (CPEC), the crown jewel of Beijing’s Belt and Road Initiative in Pakistan. The CPEC is supposed to run through Balochistan to end in the deep seaport of Gawadar, providing the shortest land and sea route between China and the Persian Gulf.The BLA last struck on August 11 in an attack on a bus carrying Chinese engineers in Dalbandin, about 340 southwest of the provincial capital Quetta. Despite the Pakistani military maintaining control of the province, militants are able to take advantage of the mountainous terrain and porous border with Afghanistan and Iran to launch guerilla attacks on their targets.
Baloch insurgents targeting Chinese is a recent development, although they had been caught in the cross fire periodically in clashes with the Pakistani military. With the Pakistani military guarding Chinese projects, the group has started deliberately attacking Chinese interests. Baloch militants accuse the Pakistani military of colonising the province with the help of China, turning them into a minority in their own province. In a statement given to Agence France-Presse after the consulate attack, the BLA referred to the Chinese as “an oppressor.” The Pakistani government says the group plays into the hands of India by impeding progress that is being led by Chinese investment.
Along with Baloch separatists, extreme nationalists in the Sindh province share a similar anti-Chinese agenda but enjoy little support in the province.
https://www.scmp.com/week-asia/geopolitics/article/2174837/why-are-separatist-militants-violently-targeting-chinese
I NEVER ESCAPED THE VIOLENCE: FATIMA BHUTTO ON HER NEW NOVEL THE RUNAWAYS
BY MUHAMMAD COHEN
When the world is on fire, it’s difficult to find your proper place in it. Fatima Bhutto’s new novel The Runaways faces that question from perspectives highlighting the many facets of modern Pakistan, inevitably encompassing issues of radicalism and Muslim identity.
Bhutto herself, the granddaughter and niece of prime ministers and daughter of a political martyr – leading many to wonder if she is destined for Pakistani politics – faces questions about her own place in a tumultuous world.“You don’t get to run away from anything, really. You always return to it,” Bhutto says. “I used to think I was running away from the violence that I encountered growing up. But I never escaped from it because I’m always writing about it, thinking about it, replaying it, trying to understand it in new ways. I don’t think you ever really get to run away. You get to see things from different angles but you still battle them.”
Like Bhutto herself, The Runaways is something of a cipher. The book was not available when she spoke at Ubud Writers & Readers Festival in Bali last month. Since then, the novel has been released exclusively in Pakistan. The rest of the world must await its publication by Penguin in March. During her on onstage discussion and our face-to-face interview, Bhutto jealously guards plot details.
Her 2010 family memoir Songs of Blood and Sword drew a lot of attention for pinning the 1996 killing of her father Murtaza Bhutto in a hail of police gunfire on her aunt, Benazir Bhutto, then prime minister, and her husband Asif Ali Zadari. Fatima Bhutto was 14 at the time. “I’m haunted by the violence,” she says. “Writing is a way for me to exorcise the violence, to expose it to air and shrink it.”
The memoir highlights Bhutto’s childhood during her father’s exile from Pakistan during General Zia-ul-Haq’s military regime. “Born in Kabul bearing a Pakistani passport, grew up in Syria … You don’t want to be in an airport queue with me,” she jokes.Bhutto returned to Pakistan as a pre-teen before undertaking undergraduate studies at New York City’s Barnard College and a master’s degree at University of London’s School of Oriental and Asian Studies.
WRITING IS A WAY FOR ME TO EXORCISE THE VIOLENCE, TO EXPOSE IT TO AIR AND SHRINK IT
“Pakistan has never really been my own,” Bhutto says. “It’s been a part of me, but it’s also been a part of my father, it’s a part of my family. Whereas growing up, Syria was mine, I felt. I understood that my father was in exile in Syria, but I felt like I belonged there. Of course, that changed. When I went back when I was in my twenties, I would be reminded, oh Syria’s not yours because you’ve been away. So I think you’re always making things your own and then releasing them, at least I am. Sometimes they’re all yours, sometimes you share them. Sometimes you surrender them.”
Bhutto admits, “I don’t feel as if I belong anywhere in particular, which allows me to move pretty comfortably, because everywhere feels as if it has to be travelled lightly through. So you’re always looking for home, always looking for a place that you don’t have to travel lightly through.”Characters in The Runaways similarly seek places where they needn’t travel lightly. Some are acutely aware of their predicament. Marked as an outsider by her name and weighed down by poverty, Anita Rose finds refuge under the stairs in mansions where her mother massages the feet of wealthy women. Sonny’s father immigrated from Lucknow to Portsmouth, England, to give his family a better life, a condition he defines in part as excising all vestiges of South Asia, leaving Sonny caught between worlds.
On the other hand, Monty unabashedly enjoys wealth in Karachi. “Monty could have gone to see Crazy Rich Asians and recognised his friends, not seen it as anything other than a fun film, not a problem,” Bhutto says. A new girlfriend forces Monty to confront his position of privilege in a place where most people have so little.
Settings in the novel, Bhutto’s second, are drawn from her own journey. “You don’t really know what you pick up, but you become a bit of a magpie,” she says. “In fiction I think it’s hard to separate what you’ve created from what you’ve experienced. They blend in a really odd and powerful way, so you forget in the process of writing which is real and which is not. They become their own kind of world.”The Karachi, Portsmouth and other locations in The Runaways are both real and imagined. “But the reader and the writer are separated because the reader will never really know what’s real and what’s imagined, but the writer knows. It’s a woven tapestry, so it’s difficult to point out which of the combination is which,” says Bhutto, who also works as a journalist and wrote a book on the 2005 earthquake in Kashmir.
“I think what is powerful about fiction is, of course, the observations you make about life and the struggle of your characters, but especially the universe that you create that has to exist in a real way in your mind. And you populate it in a way that maybe doesn’t even make it to the end of the book, but in your mind it’s so heavily populated by sounds and smells. That’s what I find exciting about this kind of writing over non-fiction.”
Bhutto believes “the job of writers is to observe, to have their eyes open and use their observation to push things towards the confrontation. Whether it’s their job to ask or answer questions, I’m not sure. Sometimes they’re answered, some things are left unsaid. What’s powerful about fiction over non-fiction is that it doesn’t answer your questions for you. It just presents you certain things, and you can take away what you wish from them, whereas non-fiction tells you very clearly, this is what we think, what we believe, and that’s where our role ends. I quite like that fiction doesn’t do that to its readers.” It just leaves them to makes up their own minds in a smouldering world.
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