GOVT BRINGS DOWN HAMMER ON ECONOMY In partnership with
Profit
Friday, 8 September, 2023 I 11 Safar, 1445
T g
RUPEE STRENGTHENS AS CIVIL AND MILITARY LEADERSHIP EXPRESSES RESOLVE TO STICK TO TOUGHER DECISIONS PROFIT
ABDULLAH NIAZI
HERE is no such thing as a quick fix when it comes to the economy of a country. Yet in the very small mandate it is supposed to have the country’s current caretaker government showing it was going to try and trudge through the chaos that is Pakistan’s broken economy. So what is happening? There is a lot to unpack from Thursday. Perhaps most notably the rupee found a leg to stand on rising in the interbank market rising Rs2.04 against the dollar to come to 304.94 from yesterday’s close of 306.98. Perhaps more importantly, according to the Forex Association of Pakistan (FAP), the dollar was selling for Rs307 in the open market — down by Rs5 from the previous day’s Rs312. The bridging of the gap between the interbank and open market rates comes after the State Bank of Pakistan (SBP) on Wednesday decided to introduce
structural reforms in the exchange companies’ (ECs) sector. Prime Minister Kakar told a delegation of businessmen that the government was reforming the tax system through digitisation and underscored the need to boost tax collection for economic development. On the same day the State Bank of Pakistan also stepped up supervision of the foreign exchange market, ordering banks to set up separate entities to conduct forex transactions and extending a clampdown on hard-currency hoarders and smugglers. On the SBP front many brokerage houses said they were expecting the SBP to hike the key policy rate by 150 basis points (bps) in its upcoming Monetary Policy Committee (MPC) meeting on September 14 as it looks to tame runaway inflation in the country. At the same time it must very much be remembered that the caretaker government has a helping hand from the Pakistan army. The SBP’s decision to crack down on money exchanges came
Clashes between border forces: Torkham crossing remains closed for 2nd day PESHAWAR
STAFF REPORT
The Torkham border crossing between Pakistan and Afghanistan remained closed for the second day on Thursday, leading to a build-up of trucks laden with goods, after clashes between security forces from the two countries. The busy border crossing had been closed on Wednesday after Pakistani and Afghan Taliban forces started firing at each other, according to local officials. Officials in Pakistan had blamed the other side for starting the midday firefight, which lasted for around two hours and came after the Afghan authorities started building a checkpoint on their side in a prohibited area, close to the main border crossing. The officials said the Afghan authorities already had a checkpoint in the vicinity, commonly known as the Larram Post, but they started building another post over a small hill without discussing it with the Pakistani side. They said border security officials had also held a meeting minutes before the crossfire began. However, it could not be ascertained what the meeting’s agenda was and what prompted both countries’ border forces to open fire. Apart from the FC official, a Customs clearing agent had also been critically injured when he was hit by a speeding vehicle pulling back to safety after the firing started. Abdul Basir Zabuli, a spokesman for the Taliban-led police in Afghanistan’s eastern Nangarhar province, where the crossing lies, said today that authorities from both countries were trying to determine the reason for the clash. FLOW OF TRADE DISRUPTED: The Torkham border point is the main point of transit for travellers and goods between Pakistan and landlocked Afghanistan. Ziaul Haq Sarhadi, director of the Pakistan-Afghanistan Joint Chamber of Commerce and Industry, said hundreds of trucks laden with fruit, vegetables and other goods were stuck due to the closure. “The traders are suffering heavy losses after the border in Torkham was closed on Wednesday following a firing incident there,” he told Reuters. The entire flow of trade had been affected and the loading of goods in the southern port of Karachi had been disrupted. Disputes linked to the 2,600-kilometre border have been a bone of contention between the neighbours for decades. BLAME GAME: Jamshed Khan, a Customs agent at Torkham, had told Dawn on Wednesday that everyone near the Torkham border crossing immediately vacated their workplaces and ran for cover when the firing started. He said that it was not clear which side initiated the firing. “First, we heard the sound of firing from small weapons and then heavy weapons were also used from both sides,” he said, adding that the incident caused panic among clearing agents, transporters and ordinary people, with drivers of loaded and empty vehicles trying to flee the troubled spot. Sabir Khan, a resident of the Bacha Maina residential compound near the border, had told Dawn that people had sent their families to safer locations in Landi Kotal when some projectiles fired from the Afghan side landed inside some homes. He said the projectiles left minor marks on some houses, but no one was injured.
only a few days after Chief of Army Staff General Asim Munir in a slew of meetings with leading businesspersons assured them that there would be transparency in the rates of foreign exchange in due time. On Thursday the 259th Corps Commanders’ Conference at the General Headquarters (GHQ) in Rawalpindi resolved to “wholeheartedly” assist the government in curbing all illegal activities that hamper economic growth, stability and investor confidence. With the military already actively involved due to its presence in the Special Investment Facilitation Council it is quickly becoming clear that the economy is now being very carefully managed. The good news in this is that there is now a clear direction in which the economy is being managed. Backed by the military leadership the caretakers have decided to increase OMC margins which will increase the price of petrol as well. Normally, governments wait for the OMCs to threaten a strike until giv-
Rs 15.00 | Vol XIV No 69 I 8 Pages I Islamabad Edition
ing them a small increase in margins. The government is also set to increase gas prices despite rising inflation. During the PDM coalition government, Ishaq Dar’s blundering and the threat of default left the economy in tatters. Decision making was slow, indecisive, and put Pakistan in a position where there was no clarity as to the future. Perhaps because the caretakers do not have the worry of re-election in mind they are not concerned about making these tough calls that will lead to further inflation in the short term and difficulties for everyday people. The bad news, however, is that while these are decisive and tough decisions the caretakers can only do so much in the time they have. The one thing that Pakistan is still very much lacking is political stability. Long-term macroeconomic reforms require a government with a mandate. And while the caretakers have the mandate for now and even the right backing, there is still no surety about elections. Until that is cleared up Pakistan is living on borrowed time. It is imperative for these matters to at least be cleared up before any further actions can be taken to help he economy.
Senator Durrani holds quiet meeting with Dr Alvi, calls for ‘political reconciliation’ ‘ICE-MELTING’
ISLAMABAD
MIAN ABRAR
In a dramatic move, former information minister Senator Mohammad Ali Durrani held a quiet meeting with President Dr Arif Alvi and discussed with him the “matters of mutual interest”. The meeting was important in the background of two previous meetings held in the presidency which failed to yield any positive results. While Presidency did not issue any press statement about the meeting, however, sources privy to the meeting details said that Senator Durrani met President Alvi “with a message of political reconciliation and harmony” in the country. “Senator Durrani is an old friend of Dr Alvi and both have worked together to support Imran Khan’s campaign to collect donations for Shaukat Khanum Memorial Hospital from 1992-1996. Today’s meeting was held in a very pleasant manner and both the old comrades exchanged pleasantries besides agreeing to the need of promotion of reconciliation and harmony in the country,” a source close to Senator Durrani told this scribe. The source said that Senator Durrani told President Alvi to play his role in bringing down political temperature so as the ailing economy of the country could be restored. “Both the leaders agreed that political temperatures should be brought down and political reconciliation
should be given a chance. More such meetings would be held in next few days to help normalise the political tensions,” the source said. Asked whether there was any proposal under discussion to normalise tensions and former prime minister Imran Khan could be released, the source said that it was quite “premature” to talk about such an opening as the meeting was just an “ice-melting” move and future discussions may help decide such crucial matters. Though there was no official conformation of the meeting, well-placed sources told Pakistan Today that Senator Durrani’s car entered Presidency around 12:40pm and came out at 2:10pm. Pakistan Today was also able to obtain official photograph of the
meeting held between Senator Durrani and Dr Alvi. Senator Durrani is a senior politician and has served as Minister for Information and Broadcasting; and Minister of State for Culture and Youth Affairs. He has close links with the military establishment and these days he is senior vice president of Pir Pagaro-led PML-F. In the recent past, it was none other than Senator Durrani who had held meetings with Shehbaz Sharif who was in jail in year 2021-22 when Imran Khan was Prime Minister of Pakistan. Later, Durrani also had met with Maulana Fazlur Rehman and these meetings had helped release Shehbaz Sharif and later he became Prime Minister of Pakistan.
Lawyers to observe strike across Pakistan on September 14 ISLAMABAD
STAFF REPORT
The All Pakistan Lawyers Convention convened by the Supreme Court Bar Association (SCBA) in Islamabad announced on Thursday that lawyers will observe a countrywide strike on September 14 to “defend and uphold the Constitution, rule of law, and human rights”. A statement issued by the SCBA after the convention said lawyers across the country would hold peaceful protests within their respective bar associations in the form of rallies on September 14. Earlier today, the SCBA also released a list of resolutions passed at the convention, including the demand to hold the general elections “within the constitutionally prescribed time frame of 90 days of the dissolution of the assemblies”. Earlier this week, the Pakistan Bar Council (PBC) also passed a resolution, urging President Arif Alvi to “fulfil your constitutional responsibility” and announce a date for general elections — which are to be pushed beyond the constitutionally mandated cutoff date of November 9 if the Election Commission of Pakistan (ECP) sticks to its timeline for fresh delimitation of constituencies”. Addressing a press conference outside the Supreme Court, PBC Chairman Hassan Raza Pasha had also announced a countrywide strike of lawyers on September 9 for the fulfilment of this demand. The calls for strikes come as the president, ECP, political parties and other stakeholders take differing stances on the time frame for holding general elections and who has the authority to decide the final poll date. The ECP has ruled out elections this year, while the 90day limit for holding polls following the dissolution of the National Assembly (NA), as mandated under Article 224 of the Constitution, ends on November 9. It reasons its decision to push elections beyond November 9 on the basis of the notification of results of the new digital 2023 census and Section 17(2) of the Elections Act, which states: “The commission shall delimit constituencies after every census is officially published.” However, President Alvi invited Chief Election Commissioner (CEC) Sikandar Sultan Raja last month for a meeting to “fix an appropriate date” for general elections. In his letter to the CEC, the president quoted Article 244 of the Constitution, saying he was duty-bound to get the elections conducted in the 90 days’ prescribed period as the NA was dissolved prematurely on August 9. But a recent amendment to the Elections Act 2017 empowered the ECP to announce the dates for polls unilaterally without having to consult the president. Citing this change to the law, the CEC responded to the president, saying that participating in a confab with him to decide the election date would be of “scant importance”. Subsequently, the president sought the law ministry’s advice on the matter, and the ministry communicated to the president that the powers to announce the poll date rested with the Election Commission of Pakistan (ECP) after he sought its advice on the matter. Two days ago, the president discussed matters pertaining to elections with caretaker Law Minister Ahmed Irfan Aslam and stressed the need to make decisions “in accordance with the spirit of the Constitution”. Asserting the stance, lawyers’ convention convened by the SCBA adopted a resolution today, stating: “The general elections are required to be held within 90 days of the dissolution of the assemblies … and the Election Commission of Pakistan and all other institutions required to act in aid of the ECP are under constitutional duty to do so.” The resolution also highlighted that no caretaker government could “go beyond 90 days and becomes unconstitutional and illegal subsequently”. The caretaker governments in Punjab and Khyber Pakhtunkhwa have already become unconstitutional and are liable to be removed, it added. The resolution further stressed the importance of “civilian supremacy, the rule of law, and the independence and integrity of constitutional institutions as fundamental pillars of our democracy”. It underlined that “the armed forces and their officials of all ranks are bound by their constitutional oath not to indulge in any political activity whatsoever”. Moreover, “the government or any of its institution or officials should not be allowed to induce, pressurise or influence any judge for obtaining desired judicial verdicts”, it said, adding that those found attempting to make such a demand should be strictly punished under the law. It further said that all citizens “being kept in custody of military or intelligence agency be transferred to the custody of the relevant civil law authorities for their presentation before civilian courts”. Specifically mentioning the arrest of females in the recent times, the resolution said “all arrests, detentions and harassment of ladies for the last few months or so are strongly condemned and those found responsible for such acts be punished under the law.”
Eleven LHC judges to get interest-free loans LAHORE
MONITORING
The Punjab caretaker government has approved interest-free loans totalling Rs360 million for eleven judges of the Lahore High Court (LHC), including one of the justices who issued a stay order against a government decision regarding sugar mills. The Punjab Cabinet’s Standing Committee on Fi-
nance recently granted approval for these loans, which the judges sought to use for constructing residences or purchasing properties. These interest-free loans will be repaid by the judges over a twelve-year period, with each judge receiving approximately Rs30 million, equivalent to 36 times their basic monthly salary of Rs912,862. The judges set to receive these loans are Justice Rasaal Hasan Syed, Justice Shakeel Ahmed,
Justice Muhammad Tariq Nadeem, Justice Muhammad Amjad Rafiq, Justice Abid Hussian Chattha, Justice Anwaar Hussain, Justice Ali Zia Bajwa, Justice Muhammad Raza Qureshi, Justice Raheel Kamran, Justice Ahmed Nadeem Arshad, and Justice Safdar Saleem Shahid. It is worth noting that there has not been any previous instance of government officials receiving interestfree loans.
IMF gives green signal for electricity relief plan for consumers with 200 units or less CONTINUED ON PAGE 03
g
NOD PROVIDES MUCH NEEDED RELIEF BOTH TO INTERIM SET-UP AND TO BELEAGUERED MASSES FACING INFLATED BILLS PROFIT
STAFF REPORT
The International Monetary Fund (IMF) has given the go-ahead to the caretaker government to give relief to electricity consumers using 200 units and less. The all-important nod gave the government cause to celebrate after being cornered by protests over rising electricity prices in the country. Sources said that a cabinet meeting is likely to be held tomorrow in which the caretaker PM will approve the electricity relief plan. Earlier, it was reported that the
IMF has reportedly approved a relief plan, installment-based billing system, targeting 4 million consumers with monthly electricity consumption of up to 200 units. As per the details, the IMF has conditionally approved the gradual payment of August’s electricity bills over three months for consumers not eligible for subsidies and using up to 200 monthly units. Lifeline consumers and those within this consumption bracket who are protected from price increases will not be eligible for this temporary relief. On the other hand, the temporary relief
for electricity consumers will come at a cost for gas sector consumers. The IMF has also urged Pakistan to increase gas prices, which have already been determined by the Oil and Gas Regulatory Authority (OGRA) but remain pending notification. OGRA in June announced a 50% increase in gas prices for consumers of the Sui Northern Gas Pipeline Limited (SNGPL) and a 45% increase for the Sui Southern Gas Company Limited (SSGCL), equivalent to a Rs417.23 per unit hike in gas prices.