Tag Archives: inflation

European Central Bank hurls cash at sluggish euro zone economy, seeks to force bank lending

FRANKFURT (Reuters) – The European Central Bank launched a raft of measures on Thursday to fight low inflation and boost the euro zone economy, cutting rates, imposing negative interest rates on its overnight depositors and offering banks new long-term funds.

By John O’Donnell and Eva Taylor

FRANKFURT (Reuters) – The European Central Bank launched a raft of measures on Thursday to fight low inflation and boost the euro zone economy, cutting rates, imposing negative interest rates on its overnight depositors and offering banks new long-term funds.

The ECB cut all its main rates to record lows in a drive to fight off the risk of Japan-like deflation and bring down the euro’s exchange rate. For the first time, it will charge banks 0.10 percent for parking funds at the central bank overnight.

It stopped short of large-scale asset purchases known as quantitative easing for now, but ECB President Mario Draghi said more action would come it necessary.

Draghi outlined a four-year 400 billion euro ($544.86 billion) scheme giving banks that have been holding back credit due to looming stress tests an incentive to increase lending to businesses in the euro zone.

“Now we are in a completely different world,” Draghi told a news conference, citing “low inflation, a weak recovery and weak monetary and credit dynamics”.

The package, adopted unanimously, was aimed at increasing lending to the “real economy”, he said.

Other steps included extending the duration of unlimited cheap liquidity for euro zone banks, injecting about 170 billion euros by stopping tenders that withdrew funds spent on past government bond purchases, and preparing for possible future purchases of asset-backed securities to support small business.

Read more » MSN
http://money.ca.msn.com/investing/news/breaking-news/ecb-hurls-cash-at-sluggish-euro-zone-economy-seeks-to-force-bank-lending

“Are we finished? The answer is no.” – Mario Draghi, president of the European Central Bank says

Draghi Unveils Historic Measures to Counter Deflation Threat

Mario Draghi, president of the European Central Bank (ECB), reacts whilst speaking at a news conference where he unveiled historic measures to face down inflation in Frankfurt, Germany, on Thursday, June 5, 2014.

Bloomberg News reported:

The ECB today cut its deposit rate to minus 0.1 percent, becoming the first major central bank to take one of its main rates negative. In a bid to get credit flowing to parts of the economy that need it, the ECB also opened a 400-billion-euro ($542 billion) liquidity channel tied to bank lending and officials will start work on an asset-purchase plan. While conceding that rates are at the lower bound “for all practical purposes,” he signaled the the ECB is willing to act again.

“We think it’s a significant package,” Draghi told reporters in Frankfurt. “Are we finished? The answer is no.”

Courtesy: Bloomberg

Brazilian Revolt Claims Second Life as Violence Erupts

By Joshua Goodman, Raymond Colitt & David Biller

Brazil’s swelling street rebellion claimed its second fatality in the largest and most violent protests yet, as 1 million demonstrators rallied for better public services and an end to corruption

Marches took place in hundreds of cities across Brazil last night in what began as a peaceful protest. Violence later erupted with police battling mobs trying to storm the Foreign Ministry in Brasilia and Rio de Janeiro’s city hall.

In the northern city of Belem, a 54-year-old street cleaner died today after having a heart attack during the protests there, local health officials said. Yesterday an 18-year-old was killed when a vehicle accelerated into a crowd in the city of Ribeirao Preto, the military police said. The Free Fare Movement that helped organize protests in Sao Paulo said today it wouldn’t call new protests for now.

President Dilma Rousseff, who has been struggling to get in front of the mass movement, met with cabinet members today to discuss emergency measures to help quell violence and prepare proposals on education, health and other demands of protesters, a government official aware of her agenda said.

The movement triggered by an increase in bus fares this month has spread amid a groundswell of discontent among Brazil’s middle class. While faster economic growth helped lift 40 million people out of poverty over the past decade, a recent slowdown and faster inflation threaten to erode social gains.

Read more » Bloomberg
http://www.bloomberg.com/news/2013-06-21/brazil-protests-persist-after-cities-revoke-fare-increase.html

U.S. Bonds Cheapest Since 1990

U.S. Bonds Cheapest Since ’90 Versus Bunds Counter Buffett

By Cordell Eddings

The longest decline in Treasuries this year has left U.S. government debt the cheapest since March 2011 when measured by real yields and the best relative value compared with German bunds in more than two decades.

After inflation, 10-year U.S. notes yielded 0.91 percent last week, or 1.77 percentage points more than real yields on U.K. gilts, the widest spread in 25 months. Versus Germany, the securities are the least costly in 23 years when adjusted for the recent record-low interest rates around the world that distorted the normal relationship, according to FTN Financial.

Federal Reserve Chairman Ben S. Bernanke is counting on Treasuries to contain borrowing costs as the central bank buys $85 billion a month in securities to sustain the economic recovery that lifted U.S. consumer confidence to the highest in almost six years. The better relative yield for U.S. bonds may help bolster demand even as Warren Buffett said this month that he pitied fixed-income investors because of about record-low interest rates.

Read more » Bloomberg
http://www.bloomberg.com/news/2013-05-19/u-s-bonds-cheapest-since-90-versus-bunds-counter-buffett-pity.html

Pakistan Elections 2013: The view from afar

by Omar Ali

If all goes well, Pakistanis will go to the polls on May 11th to elect a new national assembly and all 4 provincial assemblies.  The Pakistan People’s Party was the largest party in the outgoing parliament and under the guidance of President Asif Ali Zardari, successfully held together a disparate coalition regime in the face of multiple challenges to complete its 5 year term of office. Unfortunately, that huge achievement is almost their only major achievement in office. While things were not as absolutely abysmal as portrayed by Pakistan’s anti-PPP middle class (rural areas, for example, are better off economically than they have ever been), they are pretty awful.  Chronic electricity shortages (inherited from Musharraf’s Potemkin regime, but still not fixed), galloping inflation, widespread corruption and endless terrorism have tried the patience of even the most devoted PPP supporters and make it difficult for the PPP to run on their record. There are a few bright spots (including a relatively well run welfare scheme called the Benazir income support program) and with Zardari deploying his coalition building magic, it is not a good idea to completely rule them out.  Still, they are clearly not the favorites in the coming elections. The middle class excitement (especially in Punjab and KP) is all about Imran Khan, while more serious pundits seem to be betting on Nawaz Sharif and his PMLN. Being out of the country, I have little direct knowledge of what retail politics looks like on the ground; but there is such a thing as a long-distance view and I am going to take that view and try and make some predictions. We will know in 3 weeks how out of touch I really am.

If you do want to look up what is happening on the ground in detail there are several excellent sources available, for example:  Saba Imtiaz’s election watch, the Dawn newspaper’s election page (including an interesting motor cycle diary from Tahir Mehdi as he motors across Pakistan), an election page from journalist and public intellectual Raza Rumiand last but not the least, the wonderful young team at fiverupees.com, who don’t have a lot of coverage yet, but do have writers who prefer carefully checked facts and data to mere opinion.

Pakistan Economy: Sinking Like A Rock, says Asian Development Bank.

Sinking like a rock: Slim chances of recovery for Pakistan’s directionless economy, says ADB

ISLAMABAD: Amid deep-rooted concerns over a “directionless” economy due to failure of the previous government and inability of the caretaker setup to take immediate meaningful steps, the Asian Development Bank has warned that Pakistan’s current growth model is unsustainable that also undermines future prospects.

In its Asian Development Outlook, the Manila-based lending agency has painted an extremely bleak picture of Pakistan’s economy that is “directionless” and immediate recovery chances are almost nil amid a worsening balance of payments position.

“A difficult political situation stalled effective policy response to macroeconomic and structural problems, especially regarding energy, and the end of the government’s 5-year term in mid-March limited political scope for major policy or structural reforms,” it said.

The economic developments in this fiscal year are unfolding along broadly similar lines as previous year, but with “deepening concerns about sustainability and the adequacy of forex reserves”.

A missing link in the ADB’s analysis of political failures is the role of bureaucrats in running the affairs of the government who often do not disclose actual extent of problems to the leadership.

Continue reading Pakistan Economy: Sinking Like A Rock, says Asian Development Bank.

A political economy of communalism in south Asia

Hyderbad: “You Strike & We will Strike back”.

The message of ‘21/2 Hyderabad serial terror attack

By Feroze Mithiborwala

The strategic& political target of the terror attack, is the historic 2-day Strike of the Working classes, where more than 12 core or 120 million workers both from the organized & unorganized sectors participated & brought India to a halt.

This working class strike surmounted all calculations due to the scale at which the enraged working classes participated. This strike has shaken up the corporate-political elite & that is why they have struck back with a serial terror attack, where now more than 15 citizens have died & 50 grievously injured. The terror attack was orchestrated in Dilsukh Nagar, where there is a busy market & many cinema halls.

If the working class unrest takes the proportions which we witness in many nations across the world such as Greece & Spain, the ruling elite will witness a massive crisis, due to the growing burdens of price-rise, decreasing wages, increasing scams, spiraling inflation, the growing insecurity of the peasantry, workers& laboring classes, as well as the ever-widening rich-poor divide.

Continue reading A political economy of communalism in south Asia

Canada is not doing better

Ed Broadbent: Inequality’s a problem for Canada, too

By: ED BROADBENT, The Globe and Mail

I don’t know whether it’s smugness or indifference, but we Canadians can be a self-deluding lot. Growing inequality, portrayed recently in The Economist as a global scourge, when viewed from Canada, seems to be a problem only for others.

After all, it was other countries’ banks that crashed in 2008. It’s in southern Europe that tens of thousands are taking to the streets. And it was in France and the United States that recent elections were fought over the fact that those who created the mess, the top 1 per cent, are still getting big bonuses and low tax rates.

Well, guess what? Canada is not doing better. From 1982 until 2004, almost all growth in family income went to the top 20 per cent, with much of that going to the top 1 per cent, while the bottom 60 per cent saw no growth at all. The increase in inequality in Canada since the mid-1990s has been the fourth highest in the Organization for Economic Co-operation and Development.

But does this matter? Yes, the evidence is in, and the conclusion is clear: Inequality does matter. In terms of social outcomes, more equal societies do better for everyone, not just for the poor, in almost every respect: health outcomes, life expectancy, level of trust in society, equality of opportunity and upward social mobility. A recent study showed that if Americans want to experience the American Dream of upward mobility, they should pack up and move to Sweden. They would have to leave the most unequal democracy and move to the most equal.

Continue reading Canada is not doing better

Pakistan’s economy Plugging leaks, poking holes – Who will pay for Pakistan’s state?

PAKISTAN’S national poet, Muhammad Iqbal, believed the subcontinent’s Muslims needed to unite if they were to prosper. Without a strong sense of nationhood, he wrote, “mountains become straw and are blown away in the wind”.

Poetry and taxes do not often mix. But those melancholy lines grace an analysis of Pakistan’s fiscal plight by Ehtisham Ahmad of the London School of Economics. The country’s tax revenues have collapsed. Its debt is almost certainly unsustainable without outside help. And yet Pakistan does not pull together. “Textile lobbies, the urban gentry, traders and agriculturists, all point to the other and say: Tax that group first, but do not tax me,” Mr Ahmad writes.

The tax authorities can identify a mere 768,000 individuals who paid income tax last year. Even fewer—just 270,000—have paid something in each of the past three years. That is one reason why Pakistan’s tax revenues amounted to only 9.1% of GDP in the latest fiscal year, one of the lowest ratios in the world (see chart). These are exceedingly narrow shoulders on which to rest a nuclear-armed state of 180m people. The culture of cheating starts at the top. Most members of parliament, many of them conspicuously affluent, do not file tax returns.

In the months before an election, due by May, the government of President Asif Zardari of the Pakistan Peoples Party (PPP) is proposing a controversial remedy: an amnesty for evaders. They will be invited to wipe the slate clean with a one-off payment of only 40,000 rupees ($400). The government says it is a quick way to resuscitate the public finances and expand the tax net. Its critics see the amnesty as a boon for politically connected crooks.

Continue reading Pakistan’s economy Plugging leaks, poking holes – Who will pay for Pakistan’s state?

Karachi to Islamabad Mohabbat-e-Sindh Train March and Sit-in of Sindhis ahead Parliament house Islamabad.

By: Kalavanti Raja

In continuity of several Mohabat-e-Sindh Rallies in all the districts of Sindh including Karachi, Dynamic Leader Rasool Bux Palijo led Awami Tahreek launched 03 days Mohabat-e-Sindh Train March started from Karachi with message of love to all people of Pakistan, awareness of Sindh issues and received warm welcome at every railway station.

And ended with mammoth sit-in ahead parliament house Islamabad to protect against anti Sindh and anti people planning and projects by present Government like 22nd May Massacre, Target Killings in Karachi, Water Shortage, Creation of Zulfiqarabad, Division of Sindh, Forced Conversion & Kidnappings of Minorities, Sindh local bodies Ordinance’ 12, Honour Killings, Unemployment, Inflation and Corruption.

Continue reading Karachi to Islamabad Mohabbat-e-Sindh Train March and Sit-in of Sindhis ahead Parliament house Islamabad.

Pakistan has had so many “moments of reckoning” but here is another – By Najam Sethi

Matters are coming to a head in Pakistan. The deadlock in US-Pak relations over resumption of NATO supplies is veering towards confrontation. And the confrontation between parliament-government and supreme court-opposition is edging towards a clash. The net losers are fated to be Pakistan’s fledgling democracy and stumbling economy.

Pakistan’s Parliamentary Committee for National Security has failed to forge a consensus on terms and conditions for dealing with America. The PMLN-JUI opposition is in no mood to allow the Zardari government any significant space for negotiation. COAS General Ashfaq Kayani is also reluctant to weigh in unambiguously with his stance. As such, no one wants to take responsibility for any new dishonourable “deal” with the US in an election year overflowing with angry anti-Americanism. The danger is that in any lengthy default mode, the US might get desperate and take unilateral action regardless of Pakistan’ s concern. That would compel Pakistan to resist, plunging the two into certain diplomatic and possible military conflict. This would hurt Pakistan more than the US because Islamabad is friendless, dependent on the West for trade and aid, and already bleeding internally from multiple cuts inflicted by terrorism, sectarianism, separatism, inflation, devaluation, unemployment, etc. Indeed, the worst-case scenario for the US is a disorderly and swift retreat from Afghanistan while the worst-case scenario for Pakistan is an agonizing implosion as a sanctioned and failing state.

Continue reading Pakistan has had so many “moments of reckoning” but here is another – By Najam Sethi

Pakistan’s rush for more bombs – why?

By Pervez Hoodbhoy

Excerpts;

….. In the military’s mind, the Americans are now a threat, equal to or larger than India. They are also considered more of an adversary than even the TTP jihadists who have killed thousands of Pakistani troops and civilians. While the Salala incident was allowed to inflame public opinion, the gory video-taped executions of Pakistani soldiers by the TTP were played down. A further indication is that the LeT/JuD is back in favor (with a mammoth anti-US and anti-India rally scheduled in Karachi next month). Pakistani animosity rises as it sees America tightly embracing India, and standing in the way of a Pakistan-friendly government in Kabul. Once again “strategic defiance” is gaining ground, albeit not through the regional compact suggested by General Mirza Aslam Beg in the early 1990s.

This attitudinal shift has created two strong non-India reasons that favour ramping up bomb production.

First, Pakistan’s nuclear weapons are seen to be threatened by America. This perception has been reinforced by the large amount of attention given to the issue in the US mainstream press, and by war-gaming exercises in US military institutes. Thus, redundancy is considered desirable — an American attempt to seize or destroy all warheads would have smaller chances of success if Pakistan had more.

But such an attack is improbable. It is difficult to imagine any circumstances — except possibly the most extreme — in which the US would risk going to war against another nuclear state. Even if Pakistan had just a handful of weapons, no outside power could accurately know the coordinates of the mobile units on which they are located. It is said that an extensive network of underground tunnels exists within which they can be freely moved. Additionally, overground ones are moved from place to place periodically in unmarked trucks. Mobile dummies and decoys can hugely compound difficulties. Moreover, even if a nuclear location was exactly known, it would surely be heavily guarded. This implies many casualties when intruding troops are engaged, thus making a secret bin-Laden type operation impossible.

The second – and perhaps more important — reason for the accelerated nuclear development is left unstated: nukes act as insurance against things going too far wrong. Like North Korea, Pakistan knows that, no matter what, international financial donors will feel compelled to keep pumping in funds. Else a collapsing system may be unable to prevent some of its hundred-plus Hiroshima-sized nukes from disappearing into the darkness.

This insurance could become increasingly important as Pakistan moves deeper into political isolation and economic difficulties mount. Even today, load-shedding and fuel shortages routinely shut down industries and transport for long stretches, imports far exceed exports, inflation is at the double-digit level, foreign direct investment is negligible because of concerns over physical security, tax collection remains minimal, and corruption remains unchecked. An African country like Somalia or Congo would have sunk under this weight long ago.

To conclude: throwing a spanner in the works at the CD (Geneva) may well be popular as an act of defiance. Indeed, many in Pakistan — like Hamid Gul and Imran Khan — derive delicious satisfaction from spiting the world in such ways. But this is not wise for a state that perpetually hovers at the edge of bankruptcy, and which derives most of its worker remittances and export earnings from the very countries it delights in mocking.

To read complete article »  The Express Tribune, January 30th, 2012.

http://tribune.com.pk/story/328922/pakistans-rush-for-more-bombs–why/

Imran Khan – hollow hoopla and the Evil Quad

VIEW: Imran’s inane ideas – By Elf Habib

Excerpt;

….. His elixir to cure the police, patwari (land record officer) and court cultures was equally naive. Representative sheriffs could mean even more mistrust and vengeance among the local clans. In our society, the lack of tolerance and a dignified deference to the rights and authority of a winner through a democratic election are vividly exemplified not only by Imran’s own continuous and cantankerous confrontation but also by the excessively inflated Sharifs. The local government system has not yet effectively evolved even at the district level and extending it to the thanas (police stations) would further erode their impartiality at the initial routine cognizance and investigation steps. The patwari culture is already being phased out through computerisation while his assertions to stop the ‘sale of justice’ in the courts was contradictory to the claims of an independent judiciary as the responsibility of inefficiency and corruption in the lower judicial tiers evidently rests with its higher tiers. The rest of his address was merely a volley of threats to stir further discord and disturbance, including a movement of civil disobedience. Imran Khan’s speech failed to present any vision or viable new option that the masses, mauled by inflation, inadequate income and amenities, so anxiously yearned for. There is of course an evident new option to save Pakistan by making the people the real pivot of state policies, shedding the decades-old obsession to match the military might of a far larger neighbour, seeking strategic depth in alien lands through proxy demons and neutering all shades of terrorism through a sincere and active coordination with the international fraternity. It involves an extensive and symbiotic interaction with the advanced world to acquire excellence in engineering, science, technology, manufacturing, marketing and social welfare imperatives. But leaders like Imran Khan, invariably perceived to have been propped up by the establishment to keep the PPP and the PML-N players in proper allegiance, would perhaps never strive for this option.

Read more » Daily Times

A Rubberband Kind of Year: See You Later Pakistan – By Bryan Farris

Excerpt;

…. Pakistan is a land of extremes: from extreme heat to extreme hospitality. From extreme religious sentiment to extreme devotion to food. From extremely exaggerated journalism to an extremely undervalued global reputation.

What most of the world fails to realize is just how beautiful this country is and how spectacular its people truly are. It is impossible to overlook the problems: Pakistan is facing lawlessness in Karachi, a violent political system, jaw-dropping inflation, an insufficient power supply and terrorists staking claim over the northern areas. These are real issues that do exist: but they do not define Pakistan—as much of the world would have you believe.

While it may be impossible to overlook the problems, it is (apparently) quite possible to overlook the splendor that a country like Pakistan offers.

Where else do you greet every stranger with the phrase “Peace be with you”?

Where else do you find BBQ Chicken Tikka that melts in your mouth?

Where else is being 20 minutes late considered on-time? ….

…… Pakistanis are hospitable. I’ve spent my entire time here living with a host family. At first I was a guest, but Jean, Wilburn, Asim, Maria, Susie, John, Ben, Thomas, Annie, Tashu and Ethan made me feel so welcome that they became family. I know I have a home here forever. Anywhere you go in Pakistan, people will welcome you with open arms (and probably a even a hug—from strangers too).

Pakstanis are loyal. I mean…crazy loyal. When you make a Pakistani friend, you’ve created a serious bond. Leaving is so hard because I feel such powerful ties with people here. For my farewell dinner, a co-worker (but really a new best friend), Jamshaid, made two 9 hour trips between our site in the flood affected areas and Lahore just to join for dinner. Another friend of mine who had moved out of Lahore months ago made a 250Km round trip to meet me for Sehri breakfast at 3am. I’ve never felt so honored.

Pakistanis love tea. If this isn’t self-evident, I don’t know what is. Pakistanis love to sit down, stir their chai and chat. Spending time with others and building quality relationships is so important. Back home people tend to fly through their days, but in Pakistan, every moment with another is cherished.

Pakistanis are optimistic. I’ve never been somewhere where young people were as energized about opportunities in their own country as here. There is a bright future ahead and Pakistan’s youth are driving it. A few friends of mine—Ali, Babar, Zehra, Saba, Jimmy, Khurram—have inspiring aspirations for change in PK.

This is the Pakistan that the world needs to come to know. Yes, there are terrorists and violence, and that can’t be forgotten, but if that is your perception, then you are judging a book by the headlines.

Sure, there are probably safer ways I could have spent this year, but then I wouldn’t have been stretched in the way that I have been.

Pakistan has become a part of me; it has forever changed me, my perspective on the world, and my trust in humanity.

To read complete article  → RisingPyramid

800 million dollar question?

by D Asghar

Excerpt;

Many scream off the top of their lungs about our honor and sovereignty, but very rarely can come up with a solution, which hits a bull’s eye to our economic woes

The moment that dreaded news of the US government suspending its $850 Million aid to the Pakistani Military, hit the wires, there was this flurry of various experts. All weighed in, with their expert comments to exacerbate the already stretched and strained relationship between Pakistan and US. This was of course followed by all sorts of other explanations along with jingoistic comments.

The ongoing love-hate (mostly hate) relationship with America, begs some serious introspection. The gist of the matter is that any and all relationships, whether personal or national are dependent on vested self interest. To exploit a situation to maximize the self benefit is considered sound diplomacy. To say that we are lagging in that art of international politics would be a major understatement.

Ever since the event of May 02, we have been going through various debacles and till this date, we have not come to the realization of what challenges we face as a nation. We are surrounded by not so friendly nations around us. It is hard to admit, but it is due to our doing as well. From the get go, we seem to be in a “la Shaheen” mode. If it all boils down to the “strategic depth”, then make no mistake, we have dug a deep one for ourselves. ….

…. So as I said earlier, it all boils down to sound diplomacy. Diplomacy certainly does not mean laying down flat and let people run all over you. I think that it’s about time that we look around and learn a lesson or two from our neighbors. The $800 million question is what are we willing to apply, our rarely used head or our hyper inflated ego?

To read complete article → ViewPoint

The PPP in focus – by Shahab Usto

The Zardari PPP has shown less commitment to tackling the chronic economic malaise: the deepening energy crisis, double-digit inflation, abysmally low investment and rising unemployment. Its social agenda — roti, kapra, makan (bread, clothing, shelter) — stands grounded

Last week, I analysed the PML-N’s politics using the metaphors of ‘dots of hope’ and ‘morbid haze’ to signify hope and despondency respectively. Today, I will focus on the PPP’s politics using the same metaphors, though building a seamless narrative of the PPP is rather unrealistic because unlike the Sharifs-run PML-N, the existing PPP has much metamorphosed under President Zardari’s no-holds-barred style of politics.

First, the dots of hope. Undoubtedly the PPP’s ultimate plume has been its secular and liberal politics. Ironically though, its founder, Zulfikar Ali Bhutto, had expediently excommunicated a community of citizens, the Ahmedis, from Islam, and his political heir, Benazir Bhutto, also propped up and later legitimised the Taliban government in Afghanistan. But both were unquestionably wedded to secular and liberal values and tragically both fell victim to the very obscurantist and authoritarian forces that wanted to turn this republic into an absolutist Islamic emirate and a launching pad for the violent, Salafi version of jihad.

Indeed, from the dubious Pakistan National Alliance, which led to the fall of the elder Bhutto’s government in 1977, to the ongoing struggle between a liberal democratic Pakistan and a theocratic Pakistan, the PPP has been a bulwark of resistance to the conservative and authoritarian duo. The Zardari PPP has kept alive the liberal ethos of the party, though his detractors would claim that “he has no other option” given the US and establishment’s fight against Islamist terrorism, otherwise he would have also reneged on liberalism in the name of ‘reconciliation’.

Second, under the PPP-led government, the country has seen by far the most far-reaching constitutional reforms since the 1970s. As a result, the prime minister has become the pivot of executive power, parliament has regained its sovereignty, the judiciary is also reclaiming, though in fits and starts, its lost institutional moorings, and, more importantly, the administrative, legislative and financial powers have been devolved to the provinces, abolishing the concurrent list.

True, a real and effective constitutional democracy is still a far cry. Yet, once the initial rounds of institutional turf wars are over, the political system would find a lasting stability vis-à-vis the powerful institution, foreign powers and non-state actors. The telltale signs are already there. The executive-judiciary axes are beginning to conjoin, with occasional bouts of disruption; the defence ‘department’ is for the first time reeling from the combined judicial-public-media-political pressure due to its repeated security failures, persecution of media persons, and meddling in political and foreign policy issues.

Resultantly, the Foreign Office is coming out of the backwaters to which it had been pushed by the Inter-Services Public Relations, the media wing of the armed forces. The US-led western alliance, the old guardian of our military establishment, is also betting on a democratic Pakistan, which it believes is the only thing that can tame the fury of religious schism and bigotry, here and abroad. Amusingly, the US continues to hedge on the PPP government despite the latter’s ‘image problem’ and inability to protect it from the mounting public and institutional pressures for US unilateralism and the unbridled use of drones in FATA.

Moreover, for all the ills and fissiparous tendencies, the ongoing democratic openness has brought home a universal realisation that no strategic agendas or narrow tactical moves can achieve efficacy or success without public support. It is this realisation that makes both the US and the establishment wary of the rising power of democratic institutions, media and public opinion. As a result, the PPP government has entrenched its position vis-à-vis the US and the military establishment, knowing full well that both need it in their respective interests.

Finally, putting aside the ideological imperatives, the PPP has ended ‘tribal politics’, initially mending fences with the PML-N, and now with the Chuadhries of Gujarat, its ‘sworn enemies’. This is realpolitik at its best. This alliance has not only drastically transformed the electoral and political landscape of central Punjab, the PML-N’s stronghold, it has also enabled the PPP to exploit the three ongoing spates: the US-GHQ, the PML-N-GHQ and the media-GHQ. Also, it is no more losing sleep over being bitten by its old bed bug, the MQM.

And now the morbid haze caused by the PPP’s politics. The PPP may have come out of troubled waters, but the country remains mired in a range of existential threats. Its policy and performance failures are many but only the glaring ones are discussed. ….

Read more → Daily Times
http://www.dailytimes.com.pk/default.asp?page=201175story_5-7-2011_pg3_2

SINDH NEEDS INDUSTRIAL DEVELOPMENT

by Dr Ali Akbar Dhakan, Karachi, Sindh

All the macro economic objectives can be obtained through the development of industries both small and large scale because they provide employment facilities, increase supply of goods, boost up exports, control inflation and price hike, reduce poverty and provide chances of prosperity through improvement of purchasing power of the common people .The problem of unemployment in Sindh particularly in Rural areas is due to lack of focus and attention to be given to the development of this sector.

Continue reading SINDH NEEDS INDUSTRIAL DEVELOPMENT

Darul Ulum Langley Sharif

By: Hakim Hazik

After Abdul Sattar Edhi, the biggest Boy Scout in Pakistan is Hakimullah Mehsud. He has protected Pakistan from enemies of the Ummah such as Col. Imam by shooting them in the head and making improving educational videos for patriotic Pakistanis.

All the chaos, disorder, terrorism, inflation, hailstorms and traffic congestion in Pakistan has been created by the CIA. It is interference on a massive scale from across the border. Karzai is in the hock of RAW which is a slave of CIA which in turn is a handmaiden of MOSSAD. All these leery wolves have turned upon the innocent citizens of Pakistan. They are attacking us with drones. They are attacking us with Glock handguns. They are attacking us with polio drops, so that we lose our manhood and our ghairat and the Ideology of Pakistan is defamed and degraded.

A foreign hand cannot be excluded in the murder of Shehbaz Bhatti. A foreign hand cannot be excluded in the Faisalabad blast. A foreign hand cannot be excluded in the Pacific tsunami. A foreign hand cannot be excluded in propping up Kamran Akmal. A foreign hand is squeezing the vital organs of the Ummah.

It all started when we decided to fight America’s war. Everything was going swimmingly before 9/11. We were living in a democratic and prosperous welfare state and taking great strides in economic development with the help of the IMF tranches. Now we had to kill our own people whose only fault was that they were killing our own people. Such blatant American interference will rarely be seen across the world. There are a thousand Raymond Davis’s running amok in the Land of the Pure looking for half a million trained Mujahideen whose only fault is that they want to explode bombs in city centres.

Who was it who trained these militants anyway? It was the Americans. They recruited them from across the world; trained and indoctrinated them in Darul Ulum Langley Sharif and let them loose in Afghanistan. At all this time, the Premier Sensitive Agency of the world watched with bemusement and filled its pockets with greenbacks and Ojhari Camp with explosives. They were quite distraught when the Americans left in a fit of pique, after 1989 and the Premier Agency had to mop up the mess left behind in Kabul and Jalalabad under the inspired leadership of General Bull who turned Afghanistan into a thriving, modern democracy.

Even now, as soon as the Americans leave, the half a million jihadis will instantaneously become tourist guides and divert their attention from suicide vests to the Chitrali Patti ….

Read more : Justice Denied

Indian budget projects economic growth

India’s government has unveiled its annual budget, saying that the economy is expected to grow at 9% in 2012.

Finance Minister Pranab Mukherjee said the growth rate for the current fiscal year was projected at 8.5%.

He said inflation would decrease over the next fiscal year – the current rate is 8.4%. But food price inflation, at 17%, “remains a concern”.

Mr Mukherjee promised action on food security and pledged an increase in social spending. …

Read more : BBC

Will Pakistan Follow Egypt’s Example?

Author: Jayshree Bajoria, Senior Staff Writer

Pakistan may be even more vulnerable than Egypt (The News) to popular discontent, with higher inflation, unemployment, and external debt, much of it exacerbated by the devastating flood of 2010 that crippled an already teetering economy. Many Pakistanis are sympathetic (PressTV) to the anger over corruption, surging food prices, and lack of jobs driving Egypt’s protests.

Pakistan’s Prime Minister Yousaf Raza Gilani rules out the likelihood of an uprising such as those in Egypt and Tunisia. “Our institutions are working and democracy is functional,” Gilani says (Daily Times).

Huma Yusuf, a Pakistan scholar at the Woodrow Wilson Center in Washington, says it is unlikely Pakistanis will unite against a common cause. “Decades of manipulative politicking under military regimes have fractured civil society (Dawn) and factionalized politics,” she writes. “We will always see ourselves through an ethnic, sectarian, or socio-economic lens before we see ourselves as Pakistani.” The murder of Pakistan’s Governor Salman Taseer by his own security guard in January, and support for Taseer’s assassin among many Pakistanis, exposed some of these growing divisions.

Like Egypt, Pakistan is an important strategic partner whose stability matters even more for U.S. national security interests, in neighboring Afghanistan as well as in U.S. efforts to confront al-Qaeda. But U.S.-Pakistan relations have been strained following the detention of a U.S. diplomat on possible murder charges. The Washington Post reports the Obama administration has suspended all high-level dialogue with Pakistan.

Read more : Council on Foreign Relations

Pakistan’s new economic agenda

by Manzur Ejaz

Then let’s start. Let’s take the economic agenda first:

1. Feudalism should be abolished completely

2. It will be a Social Democratic Economy…Public sector along with largely private enterprises. Public sector should be expanded to provide universal education and health services….

3. Everyone pays taxes to get services. At least everyone files taxes whether rich or poor. Role of indirect taxes should be minimized which is regressive but main source of government income. In a mixed economy taxes are the only instrument to distribute wealth on equitable basis. It is the only way to fund government operations without borrowing. And inflation or rising prices can only be checked if government borrowing is brought down to zero.

4. Electricity and gas should be supplied on continuous basis to run the industry and trade smoothly.

5. People living beyond their means and having wealth beyond known sources should be prosecuted and brought to justice.

6. End of monopolies or they should be regulated wherever necessary. Monopoly in media should be ended: Like the US one group should not have major newspaper in more than one region.

Read more : Wichaar

Many in Pakistan Fear Unrest at Home

By JANE PERLEZ

ISLAMABAD, Pakistan — Protests over crippling prices and corrupt leadership are sweeping much of the Islamic world, but here in Pakistan this week, the government blithely dismissed any threat to its longevity or to the country’s stability.

Prime Minister Yousaf Raza Gilani insisted that Pakistan was not Egypt or Tunisia. “Our institutions are working and democracy is functional,” he said. The economy, while under pressure, is not in crisis.

But while Mr. Gilani appeared unruffled, diplomats, analysts and other Pakistani officials admitted to unease, and conceded that Pakistan contained many of the same ingredients for revolt found in the Middle East — and then some: an economy hollowed out by bad management and official corruption; rising Islamic religious fervor; and a poisonous resentment of the United States, Pakistan’s biggest financial supporter.

If no one expects Pakistan to be swept by revolution this week, the big question on many minds is how, and when, a critical mass of despair among this nation’s 180 million people and the unifying Islamist ideology might be converted into collective action.

Some diplomats and analysts compare the combustible mixture of religious ideology and economic frustration, overlaid with the distaste for America, to Iran in 1979. Only one thing is missing: a leader.

“What’s lacking is a person or institution to link the economic aspirations of the lower class with the psychological frustration of the committed Islamists,” a Western diplomat said this week. “Our assessment is: this is like Tehran, 1979.”

Mr. Gilani is right in that Pakistan held fairly free elections three years ago, when the democratically based Pakistan Peoples Party, led by President Asif Ali Zardari, won.

But the return to civilian government after a decade of military rule has meant little to the people because politicians have done nothing for voters, said Farrukh Saleem, a risk analyst and columnist in The News, a daily newspaper.

As it has been for all of Pakistan’s more than 60 years of history, Parliament today remains dominated by the families of a favored few, who use their perch to maintain a corrupt patronage system and to protect their own interests as Pakistan’s landed and industrial class. The government takes in little in taxes, and as a result provides little in the way of services to its people.

“Ninety-nine percent of Pakistanis are not affected by the state — it doesn’t deliver anything for them,” Mr. Saleem said. “People are looking for alternatives. So were the Iranians in 1979.”

There is little question that the images from Egypt and Tunisia are reverberating through Pakistani society, and encouraging workers to speak up and vent frustration in ways that were unusual even three months ago.

“There’s no electricity, no gas, no clean water,” said Ali Ahmad, a hotel worker in Lahore who is usually a model of discretion. “I think if things stay the same, people will come out and destroy everything.”

When a young banker in a prestigious job at a foreign bank was asked if Pakistan could go the way of Egypt, he replied, “I hope so.”

At the core of Pakistan’s problem are the wretched economic conditions of day-to-day life for most of the people whose lives are gouged by inflation, fuel shortages and scarcity of work.

They see the rich getting richer, including “the sons of rich, corrupt politicians and their compatriots openly buying Rolls-Royces with their black American Express cards,” said Jahangir Tareen, a reformist politician and successful agricultural businessman.

Food inflation totaled 64 percent in the last three years, according to Sakib Sherani, who resigned recently as the principal economic adviser at the Finance Ministry. The purchasing power of the average wage earner has declined by 20 percent since 2008, he said.

Families are taking children out of school because they cannot afford both fees and food. Others choose between medicine and dinner.

A middle-class customer in a pharmacy in Rawalpindi, the city where the powerful army has its headquarters, told the pharmacist last week to sell him only two pills of a course of 10 antibiotics because he did not have enough money for groceries. …

Read more : The New York Times

The Downfall of Political Islam

by Samir Yousif

Finally I would point out that political Islam has failed to provide a political model that can compete with other contemporary political models, such as the Chinese model, Western democracies, or even developing democracies such as India and the other Asian countries. That comes with no surprise, as religion, any religion, keeps itself centuries behind.

The theme of my argument is the following statement: Islam, as a religion, has nothing to offer to economic or political theory. This simple idea has serious consequences. Political Islam, when it runs the country, will ultimately fail. It has no appropriate agenda that provides solutions to real political or economic challenges such as underdevelopment, unemployment, inflation, recession, poverty, just to mention a few.

(I will not touch upon the most significant political-socioeconomic issue which is income inequalities, because Islam accepts a society composed of very rich classes living side by side with very poor classes- examples can be found from history or from today’s Muslim countries like Saudi Arabia, and Iran). While some Islamists continue to claim the existence of “Islamic economics,” they have failed in producing anything close to a simple theory of economics.

I believe that the main reason for the downfall of Muslim civilisation was the inherent social crisis: a society composed of few rich surrounded by the poor masses kept going by a strong religion. Social and political revolutions took place several times during the heyday of Muslim civilisation, as happened during the Umayyad Caliphate, the Abbasid Caliphate, in Muslim Spain, and the famous Zanj Rebellion during the year 869 in Basra. But historians have ignored such revolutions. Muslim economies have failed throughout history to solve the very basic problem: the wage equation. Unskilled and skilled workers were downgraded to the lowest classes in Muslim societies, and were paid the minimum. History has showed that under Islam the wealth of the country went mainly to the Calipha, feeding his palace, army, the royal family, and to the vested interest that the Calipha has chosen himself. The tax system was mainly imposed on the agricultural sector, what was known as the produce tax (Kharaj).

“Islamic economics” is a term used today to justify the significant income inequalities in such societies and to find religiously- accepted investment opportunities for the rich. …

Read more : http://www.document.no/2011/01/the-downfall-of-political-islam/

Professional Beggars at their best … but .. Beggars are not choosers!

Vice President Joe Biden is the latest high level U.S dignitary to visit Pakistan. As the series of such high profile visits continues, one wonders what actually transpires in such meetings and what kind of assurances are given from both sides to each other. In this episode of Reporter, Arshad Sharif tries to find out what PM Gilani meant when he said that he has given assurances to Joe Biden that practical steps will be taken to resolve all the difficult problems.

Courtesy: Dawn News (program Reporter with Arshad Sharif)

Source- You Tube Link

Sindh’s discomfort with surging foreign debts

By Sabihuddin Ghausi

Mounting foreign loan burden has started telling on the nerves of Sindh’s economic managers. Officials at the Sindh Secretariat at Karachi complain of inflated cost of foreign funded projects that are thrust on them. “ All projects are virtually designed by the donors but are attributed to us without the consent of provincial political leadership and the concerned officials,” confided an official.

Continue reading Sindh’s discomfort with surging foreign debts

PLIGHT OF PENSIONERS

by Dr Ali Akbar Dhakan, retired employee of State Bank of Karachi

You better know than others all and sundry, the hazards and havoc of poverty increasing day by day faced by the fixed salaried poor retired people of Pakistan as their pay scales remain the same on which their pension was calculated at the time of thier retirement where as the salaries of serving employees increase by way of raising pay scales and annual increments. Thus, the serving employees get higher pays and other emoluments. The retired employees get only rise in their pensions when Government of Pakistan announces at the time of introducing the new budgets of the year. Accordingly, all the retired Government pensioners the rise in their pensions but it is only the State Bank which shows less sympathy and does not mercy on the poverty stricken pensioners. Would you please keeping into consideration the present price hike and inflationary trends in Pakistan since particularly last decade, have mercy on the plight of pensioners and order for atleast 50% rise in their pensioners because State Bank record will show you that rise in pensions announced by Government has not been given to its pensioners . The rise in pensions announced by the Govenrment of Pakistan with effect from 1st July 2010, has yet not been allowed since all the Government pensioners have been allowed this rise immediately after the announcment of the Government.

 

War between Judiciary & Executive in Pakistan

Call for end to bickering among institutions
HYDERABAD, Oct 20: Judiciary and Executive are two important pillars of a democratic society and the present split between the two is apt to creating disastrous situation for the state, if not checked early.
This and other similar concerns were expressed by the Sindh Democratic Forum over boiling political state of affairs ruling the country. The SDF, in a statement, criticized the national institutions of not resolving the basic issues of general public like growing inflation, increasing poverty, lawlessness, daily killings, unemployment, electricity problem and other allied issues instead were busy in bickering with each other over petty matters.
People had endured enough and now they want peace for which cooperation among national institutions was a prerequisite, it further stated.
Commenting over the midnight drama between the judiciary and the executive, it stated that perhaps it was for the first time in contemporary judicial history that a full bench was called on a rumour which has damaged the sanctity of justice.
The democratic-minded people feel the elected parliament a supreme body and because the 18th Amendment was passed by the representative of 16 parliamentary parties, therefore there appears no supra body which can challenge parliament’s decisions, said the SDF.
The coverage of court proceedings, judges’ statements, conservative comments by media and support of right wing political parties is portraying as if judiciary was being influenced by armed forces and they were trying to disband the present democratic setup, it further said.
The SDF appealed to superior judiciary to protect the cause of justice and avoid creating the impression as if it were against the elected parliament and democracy.
Judiciary being an important pillar of state and custodian of justice should give a shut up call to irresponsible statements of media, besides taking suo-motu notice against such utterances, it said.
Read more : DAWN

STATE BANK OF PAKISTAN GOVERNOR`S SELF ABSOLUTION

SBP GOVERNOR`S SELF ABSOLUTION
by Ali Akbar, Karachi, Sindh
The writer can be reached at: drdhakansindheconomist@hotmail.com

On Geo Tv Channel, Mr. Kamran Khan conducted a detailed Interview with the SBP Governor about her decision of increasing the discount rate and action taken against Money Changers on 13-11-2008 at 10:05 Pm. Mr Kamran, due to the untimely and hastily SBP Governor`s decision of incresing thrice the discount rate expressed the fears of less developmental activities, low investment, slow production function, high changes in demand and supply, price hike, inflation, unemployment, curtailment in purchasing power of poor people hence absolute poverty etc, in the coming future.

Continue reading STATE BANK OF PAKISTAN GOVERNOR`S SELF ABSOLUTION