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Friday, 23 December, 2022 I 29 Jamadi Awwal, 1444 I Rs 15.00 | Vol XIII No 174 I 12 Pages I Islamabad Edition
Punjab Governor de-notifies CM aMid ‘twists and turns’ of Power struGGle g
Ch Shujaat calls on Zardari at Bilawal House to discuss ‘Mission Punjab’
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Fawad Ch announces to challenge de-notification of Punjab CM in court
LAHORE/iSLAMABAD/pESHAWAR
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Staff RepoRt
N midst of the ongoing power struggle in Punjab, Governor Balighur Rehman de-notified Punjab Chief Minister Chaudhry Pervaiz Elahi through a notification issued in the late hours of Thursday, effectively dissolving the provincial cabinet. “Since CM has refrained from obtaining Vote of Confidence at the appointed day and time therefore he ceases to hold office. Orders issued this evening,” he wrote on his official Twitter handle, sharing a copy of the notification. “Consequent to the facts that Ch Pervaiz Elahi, CM Punjab, refrained from obtaining vote of confidence at 1600 hrs yesterday, in line with an Order under Article 130 (7) of the Constitution of Islamic Republic of Pakistan, issued under my hand on 19th December 2022, in line with Rule 22 (7) of the Rules of Procedures of Provincial Assembly of Punjab, 1997, and that he still has not done so ever after the lapse of another twenty four hours, I am satisfied that he does not command the confidence of the majority of the members of the Punjab Assembly and therefore ceases to hold his office with immediate effect,” the notification stated. According to the notification, the provincial cabinet stands dissolved and the chief minister is asked ot continue until new CM is elected.
“In terms of Article 133 of the Constitution, Ch Pervaiz Elahi, former Chief Minister of the Punjab, is hereby asked to continue to hold official until his successor enters upon the office of the Chief Minister,” it added. ‘Governor’s move illegal and unconstitutional’: PTI stalwart Fawad Chaudhry rejected the Punjab governor’s de-notification of Chief Minister Ch Pervaiz Elahi, describing the governor’s act “illegal and unconstitutional.” “This illegal notification issued by the governor does not impact the chief minister or the provincial cabinet in any way and the provincial government is working as usual”, he said while commenting on de-notification of Pun-
jab CM Ch Pervaiz Elahi and his cabinet by the governor. Fawad Ch claimed that a reference is being prepared to be sent to the president for removal of the Punjab governor. He announced to challenge the denotification of Punjab Chief Minister by Governor Balighur Rehman. Fawad Ch announced that the party would challenge the de-notification of Punjab CM Pervaiz Elahi in court, terming the governor’s move ‘illegal’. Taking to Twitter, the former federal minister claimed that the governor’s step to de-notify Pervaiz Elahi was not legally binding. “Elahi and the provincial cabinet will continue functioning as
usual,” he added. DISSOLUTION OF PUNJAB, KP ASSEMBLIES POSTPONED: Earlier, PTI leaders on Thursday said that the provincial assemblies of Khyber Pakhtunkhwa and Punjab were unlikely to be dissolved on Friday (today) — the date previously given by party chairman Imran Khan — and that the matter would extend into January because of a constitutional crisis in Punjab. Former prime minister Imran Khan had last week announced that his governments in the two provinces will dissolve assemblies to pave way for fresh elections. However, Punjab Assembly (PA) Speaker and PTI leader Sibtain Khan hinted Thursday that the dissolution may be extended till the first week of January because of the vote of confidence and no-trust motion against Chief Minister Pervaiz Elahi. On December 19, Punjab Governor Balighur Rehman had asked Elahi to take a vote of confidence by 4pm yesterday, while PML-N and PPP lawmakers had submitted a no-trust motion against the chief minister. In response, Sibtain had disposed of the governor’s order, saying that the instructions were “against the Constitution and Rules of Procedure”. In a tit-for-tat move, the governor declared the speaker’s ruling “unconstitutional” and the coalition government hinted at the imposition of the governor’s rule in Punjab.
RED ALERT
Reserves at lowest since April 2014 g
SBP reser ves plummeted by $584m; the lowest level since April 2014 while S&P Global Ratings downgraded Pakistan from B- to CCC+ pROfit REpORt aRiba Shahid
KARACHi The State Bank of Pakistan (SBP) reserves clocked in at $6.1 billion, the lowest they’ve been since April 2014; after plummeting $584 million this week. “During the week ended on 16-Dec2022, SBP’s reserves decreased by US$ 584 million to US$ 6,116.2 million due to external debt repayment,” said the SBP. S&P Global Ratings credit score for Pakistan was brought down a notch from B- to CCC+ due to the deteriorating fiscal and economic outlook for the nation. “Pakistan’s already low foreign exchange reserves will remain under pressure throughout 2023, barring a material decline in oil prices or a step-up in foreign assistance,” S&P analysts Andrew Wood and YeeFarn Phua wrote. “We expect political uncertainty to remain elevated over the coming quarters, with continued pressure from the opposition to hold early elections,” added the S&P analysts. While the S&P upgraded Pakistan’s outlook from negative to stable; the cash strapped country has not had the best time with rating agencies lately. Fitch Ratings and Moody’s Investors Service already rank the nation’s US$7.8 billion in foreign bonds at seven notches below investment grade, the equivalent of S&P’s CCC+ rating. Can we use all the reserves?
It is important to note that not all that is in the reserves can be used by the government. The reserves include capital raised through Naya Pakistan Certificates, Treasury bills, and Pakistan Investment Bond Holdings. These are encumbered reserves. An encumbrance is a restriction placed on the use of funds. The concept is most commonly used in governmental accounting, where encumbrances are used to ensure that there will be sufficient cash available to pay for specific obligations such as loan interest or certificate face value upon redemption/ repatriation. Contrary to popular belief, reserve support from friendly countries is not included in this amount. “State Bank of Pakistan would like to clarify that SBP liquid foreign reserves, as published on SBP website, do not include any encumbered assets; and accordingly 100% of the SBP Reserves are fully usable for all purposes,” explained the SBP in response to a query. Moreover, the reserve position is significantly more serious owing to the import cover falling. The import cover for the country stands at a meager 1.16 months signifying liquidity and foreign exchange crunch. Why is a low import cover alarming? Foreign exchange reserves are assets held on reserve by the SBP in foreign currencies. These reserves are used to back liabilities and influence monetary policy. They include any foreign money held by the SBP. These may include foreign currencies, bonds, treasury bills, and other
government securities. Economists suggest that it’s best to hold foreign exchange reserves in a currency that is not directly connected to the country’s own currency. Most of these reserves are held in the U.S. dollar since it is the most traded currency in the world. A general measure to know whether the reserves are adequate enough or not is to look at the import cover. Countries should hold reserves covering 100 percent of short-term debt or the equivalent of 3 months worth of imports. Import cover is the number of months of imports that could be covered by a country’s international reserves. Import cover is an important indicator of the stability of a currency. Some crises result from the withdrawal of foreign capital, while others involve the loss of export income or capital flight by domestic residents. These risks should also be taken into account when ascertaining the level of reserves. For countries where there are drains in the balance of payments because of terms of trade shocks, volatile aid, foreign direct investment, and remittance inflows and outflows, the import cover remains a useful tool. As per a study by the IMF, three months of imports remains broadly appropriate for countries with flexible exchange rates, given the estimated benefits provided by reserves in reducing both the probability and impact of shocks. The analysis also suggests that countries with good institutions and policies need lower levels of reserves.
In a media talk today, Sibtain said: “We [the PTI] had to dissolve the assemblies tomorrow but this might be delayed till the first week of January as the no-confidence motion was presented yesterday.” “Notices in this regard have to be issued first […] and the process will take a few more days,” he pointed out. “And now that the no-confidence vote has been submitted […] how can the assemblies be dissolved?” Regarding the vote of confidence issue, Sibtain Khan said that the governor could summon a special PA session for the vote of confidence for the chief minister, however, he could not de-notify the CM. “Governor [Balighur Rehman] had sent a letter regarding the vote of confidence. The PA session is already underway. We have responded to the governor’s letter in writing, however, he cannot summon a new session in between the ongoing PA session as per the Constitution,” detailed Khan. “The speaker is also representing a constitutional institution like the governor. As a speaker, it is not my duty to protect the chief minister. However, I have complete powers to enforce the law and protect the honour of the Punjab Assembly. Neither any institution will be sealed nor seized in violation of the Constitution and law.” Sibtain Khan said that he will ask the governor to not issue illegal orders.
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Snap polls only way to steer country out of quagmire, reiterates Imran Khan LAHORE Staff RepoRt
Former prime minister and PTI Chairman Imran Khan on Thursday reiterated his demand for early elections, warning that “country was slipping deeper into a quagmire”. “Previously, they [PML-N] were challenging us to dissolve assemblies but when we decided to go ahead with this decision they introduced two motions,” he said while addressing the PTI protesters via video video link from his Zaman Park residence in Lahore. He was referring to the no-confidence motion submitted against Chief Minister Pervaiz Elahi by PPP and PML-N lawmakers on Monday and Governor Balighur Rehman’s move to order a vote of confidence in a bid to forestall the dissolution of the provincial assembly. The PTI supporters were staging a demonstration outside Punjab Governor House protest Governor Balighur Rehman’s potential move to denotify CM Pervaiz Elahi. “I have never witnessed country heading towards darkness in the history like today,” said the former premier. Imran said he had been demanding early polls not for his party but for the country as PTI was already in power in two provinces of the country. “Who want to topple his own government as almost 66 per cent of country is under our rule then why do we need to do this because country is plunging into quagmire,” he added.
Without naming anyone, Imran blamed “one person” for the prevailing economic and political crises. “He did to country what no enemy could do eight months ago,” he said while apparently referring to his ouster from power via opposition’s no-confidence motion. “That a man in enmity against us put the whole country in trouble because of that one man we were treated like enemy or traitor,” he added. The former premier said the country was witnessing highest economic growth in its history when his government was toppled. He went on to say that “one man” was still trying to damage his party and get him disqualified following the failed assassination attempt on his life. “Journalists and social media activists who wrote in our support were brutally tortured”.