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The Federal Finance Minister Ishaq Dar has directed the Debt Management Office to keep a close watch on variations in the debt portfolio and suggest measures towards improving the cost and maturity levels. He further underscored the need for exploring opportunities being provided in movement of international currencies. However, this is only possible if the right kind of staff is appointed in the Debt Management Office having the requisite expertise and provided with accurate data. It is also debated whether the job entails one's background in treasury operations, etc. Unfortunately, however, the real decision-making authority rests elsewhere and the Debt Management Office has no role to play in domestic or external debt and has only an advisory role in the auction for treasury bills (T-bills) and longer tenor Pakistan Investment Bonds (PIBs). Even the role of State Bank of Pakistan stands reduced to an advisory consultant because it is the Ministry of Finance which ultimately decides on the governmental debt.

Interior Minister Chaudhry Nisar Ali Khan announced last week the first-ever policy to regulate the affairs of international non-governmental organisations (INGOs) in this country. A look at some of the measures shows a troubling lack of oversight up till now. The new policy would regulate the registration, working funds, monitoring and other aspects pertaining to all types of INGOs. Approved INGOs will be registered by the Interior Ministry for specific fields of work and areas of operations following consultation with provincial and federal authorities in line with the needs of the country. They will be required to have their financial audit conducted by auditors approved by an INGOs committee, and declare all foreign funds along with terms and conditions of those funds as well as details of all their bank accounts.
Once living up to its slogan 'Great People to Fly With', over time, PIA has been going down in public estimation for poor maintenance of its fleet and frequent flight delays amid stories of deep financial trouble. The latest problem came when the Pakistan Air Lines Pilots Association (Palpa) went on a go-slow strike to press for its demands, resulting in the cancellation of a very large number of flights. This has been happening at a time the Hajis have started returning from Saudi Arabia. The national carrier needed to operate extra flights to bring them home without causing disruptions on regular routes. Instead it is causing unnecessary difficulties for all categories of air travellers. According to some media reports, because of PIA flights' cancellation private carries are exploiting passengers, in some instances charging double the fare on domestic routes.
As was expected after the latest reduction in policy rate by 0.5 percent to 0.6 percent by the State Bank of Pakistan, the government on 1st October, 2015 also slashed the rates of return on various National Saving Schemes (NSS) by up to 68 basis points. Returns on Regular Income Certificates were reduced by 68 bps to 7.85 percent, Pensioners and Bahbood saving schemes by 24 bps to 10.8 percent, Defence Saving Certificates by 28 bps to 8.87 percent and Saving Accounts by 50 bps to 4.24 percent. Obviously, the rate of return on NSS was brought down keeping in view the declining interest rates in the monetary sector in the wake of falling inflation and improvement in foreign exchange reserves of the country. Sadly, investors in the NSS would have also to face the consequences of a fall in return on their investments in the short to medium-term as CPI inflation is coming down and foreign exchange reserves have reached a record high level of about dollar 20 billion. The CPI inflation in September, 2015 was negative by 0.10 percent compared to a month earlier and only 1.32 percent higher over the same month a year ago.
Sixty-seven years on, Kashmir remains an unfinished agenda of Partition, and a running dispute between Pakistan and India rigged with ever-lurking potential of exploding into a full-fledged conflict as it did thrice before but much more cataclysmically now. It is time the international community should come forward and help de-escalate the tension that has come to obtain between the two countries in the wake of growing Indian belligerence on the Line of Control and the Working Boundary. How to go about this, Pakistan has presented to the United Nations a "new peace process". This the four-point initiative, spelt out before the UN General Assembly by Prime Minister Nawaz Sharif on Wednesday, is quite workable only if New Delhi examines it objectively. It can turn out to be the much-needed confidence-building measure for a productive engagement to help resolve their bilateral disputes. The first, which he said would be the "easiest to implement", is formalise and respect the 2003 understanding for a complete cease-fire on the Line of Control in Kashmir. If such an understanding could be arrived at before why not now, unless India has some other designs, as sometimes obliquely hinted by its military commanders who blithely talk of 'Cold Start' and "Limited War". That the 'infiltrators from across the border are on the streets of Srinagar and many other cities in Occupied Kashmir every second day waving Pakistan flag' is an allegation that could be rejected by a plausible argument - they are Kashmiris protesting against New Delhi's oppressive control which is characterised by draconian lows and deployment of massive military troops. Then why is India allergic to the presence of UN Military Observers' Group along the Line of Control? In fact, Pakistan would welcome a secure, impregnated LoC, and thus a CBM. India should also move forward on the understanding earlier reached and mutually withdraw from the Siachen Glacier, to which Pakistan would in tandem. Pakistan would like Kashmir to be demilitarised, to help Kashmiris move out of the dark shadow of an occupational army.
Although the hierarchy in government has a number of avenues to showcase their achievements, the opposition parties and groups, however, have limited options to expose the weaknesses in government policies. Taking advantage of their position in the Senate, the PPP Parliamentarians have decided to submit an adjournment motion against the recent issuance of Eurobond at a high interest rate. As a firing shot, Salim Mandviwalla, Chairman of the Senate Standing Committee on Finance, termed the issuance of Eurobond by Pakistan a disaster for the economy and said that "reserves built up entirely on borrowings cannot provide the foundation for a sustainable growth, especially if borrowing is being done at exorbitantly high levels of interest cost". The government also needs to consider who will pay dollar 2.5 billion in the next 10 years because it was the people of the country who will suffer to reduce the burden amassed by the present government. Why could the government not wait till the third quarter for global markets to recover to get a better rate? Mandviwalla wondered, "As the maturing bonds' coupon rate is 8.25 percent, is there any rationale for incurring a 200 bps additional cost for rolling the debt," he reiterated.
Prime Minister Nawaz Sharif, while on his two-week tour to attend the United Nations General Assembly session, appointed Dr Tariq Fazal Chaudhry, on 28th September, as focal person on the Mina incident. The appointee, in his maiden press conference in Islamabad, announced that the government would extend 0.5 million rupees to each deceased's family, and 0.2 million for the family of the injured. This is baffling news on three counts.


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Banking Review 2014

Foreign Debt $62.649bn
Per Cap Income $1,512
GDP Growth 4.24%
Average CPI 8.6%
Trade Balance $-1.988 bln
Exports $1.835 bln
Imports $3.823 bln
WeeklyOctober 05, 2015
Reserves $18.349 bln