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Chairman Privatisation Commission Mohammad Zubair informed the Senate subcommittee on Finance that the government cannot use privatisation proceeds to finance its deficit as the law requires that 90 percent of the proceeds be used for debt retirement and 10 percent on poverty alleviation. Perhaps Muhammad Zubair needs reminding him that the Fiscal Responsibility and Debt Limitation Act 2005 also restricts the debt to Gross Domestic Product (GDP) ratio at 60 percent while in 2013, the first year of the PML-N government, debt-to-GDP ratio was 63.9 percent, which declined to 61.2 percent in 2014 as indicated in the Economic Survey 2013-14. However, as has been patently evident from data released post-June 2013 the figures cited since 2012 are surprisingly provisional - a fact that is difficult to comprehend for years 2012 and 2013 though one can understand provisional data for 2014 (end March) as the Economic Survey data and analysis are finalised around that time.

It's not for us to vouchsafe ex-army chief and former president General Pervez Musharraf's reported claim that the ex-chief of army staff, General Ashfaq Parvez Kayani, was 'too scared to take action against militants' in North Waziristan. But we do know that that is not the case with the present chief, General Raheel Sharif. As the Operation Zarb-e-Azb - launched at his insistence when the civilian administration juggled with so-called 'peace talks' with terrorists - moves to its culmination, the terrorists' hideouts across the tribal region, this past Tuesday took some of the heaviest airstrikes. In precise, surgical aerial strikes some 92 militants were killed at two locations in North Waziristan and one launched in Tirah Valley of Khyber Agency. In North Waziristan, the prime targets were the town of Datta-Khel and villages around it said to be the stronghold of Hafiz Gul Bahadar, a so-called 'good Taliban' commander. According to ISPR, in this action 53 militants, including 12 foreigners, mainly Uzbeks, were killed besides destruction of six hideouts, an ammunition depot seven explosives-laden vehicles. In the other action at that location 23 militants were killed. In Tirah valley the Pakistan Air Force jets hit at hideouts of pro-TTP elements belonging to the Lashkar-e-Islam, killing 16 and injuring almost the same number. Although nearly 90 percent of North Waziristan Agency had been cleared of terrorists the Datta-Khel had stood out in defiance, giving tongue to some who blamed Pakistan armed forces of being selective in dealing with terrorists. With Afghan security forces now co-operating by undertaking an aggressive action against militants on their side, there is a noticeable acceleration in anti-terrorist operation, a fact amply reflected from General Sharif's promise to restore peace from Gwadar to Chitral and Shawal to Bajaur. 'Very soon the whole of Fata region would be cleared of terrorists,' he said during his visit to Mohmand Agency, expressing hope that civilian counterparts would rise to the occasion by undertaking reconstruction and rehabilitation to root out terrorism on a long-term basis. But, unlike the Swat situation which went awry following a successful operation, the forces he said wouldn't abandon the areas without ensuring a complete functional normalcy.
How on earth did not one anticipate that the US President Barack Obama's celebratory visit to India would be the onset of a weather likely to trigger another spell of the Cold War in this region? The common perception then - as conveyed to Prime Minister Nawaz Sharif by President Obama at the time he accepted Prime Minister Modi's invitation to attend India's Republic Day celebrations - was that the visit is going to be merely a formality. But that has not happened. President Obama has taken a huge U-turn on two vital anti-proliferation positions, which had restricted implementation of the nuclear deal the two sides had signed nearly six years ago. Now India would have unquestioned access to the international nuclear market, which was not available mainly for two reasons. One, an Indian law - enacted after the 1984 Bhopal tragedy by the Indian parliament - which demands that in case of a nuclear accident the supplier companies should be held responsible. Two, as to where the supplied nuclear materials or nuclear technology would end up the Indian nuclear establishment was opposed to its 'tracking', that was required by the US laws. Both sides now plan to evolve an insurance pool mechanism, which would fix liability in case of a nuclear accident. And that will happen sooner than later given the American nuclear companies' consistent pressure on the Obama administration to resolve this issue for actualisation of the US-India nuclear power generation agreement. The question how the United States government can overlook the issue of keeping track of the supplied nuclear materials needs to be answered. Also, by leaving this issue as the baby of the International Atomic Energy Agency (IAEA) to take care of, the US government exposes itself to the charge of double-standards. If India is to be groomed as a strategic counterweight to China, the West has got to make some unholy compromises - like the one the United States has agreed to with President Obama. And if the US-led West wants India to stand up to China - its own experience of being on hard ground in far off lands being not very pleasant - there is Narendra Modi who is more than willing to enact that role.
The Earthquake Reconstruction and Rehabilitation Authority (Erra) informed the National Assembly Standing Committee on Kashmir Affairs and Gilgit-Baltistan that the government allocated over 5 billion dollars pledged by the international donors on other projects and released a meagre sum to the Authority for reconstruction in earthquake-hit areas. This claim must be investigated on an emergent basis and, if found to be accurate, appropriate action should be taken against those involved as its acknowledgement by Erra officials raises serious questions about our governments breaching the faith of international donors as well as ignoring the horrendous plight of the helpless victims of the earthquake.
A consensus is emerging that the Nawaz Sharif administration has remained focused on fighting fires that nine times out of ten received the accelerant from within the ruling party itself. In the case of the petrol crisis the accelerant was provided by the Ministry of Petroleum and Natural Resources for not taking account of the rise in gasoline demand due to (i) the shut down of CNG stations in Punjab; (ii) decline in the international petrol price that was passed on domestically; (iii) panic buying once petrol stations began to run out of fuel; and (iv) the oil marketing companies' reluctance to keep the 20-day inventories as per contract as it was leading to losses on inventory in spite of the in-built profit margin in the contract. Supply remained compromised because of the failure of the Ministry of Water and Power to improve performance by either reducing (i) receivables that account for a 300 plus billion rupees circular debt leading to Pakistan State Oil liquidity issues that disabled it from opening letters of credit, (ii) transmission and distribution losses. In addition, the shut-down of Parco refinery due to technical reasons exacerbated the shortage. And finally the Ministry of Finance is to be held responsible because it commits to reforms in the power sector to the International Monetary Fund without taking the ground realities into account namely the federal adjustor remains a pipe dream due to provincial resistance, the increasing private sector receivables and failure to take note of the rising receivables that account for an unrealistic budgeted subsidy targets.
The alleged police action at Government Islamia High School, located in the heart of old Lahore, has been generating a lot of media hype though not exactly on good grounds. According to reports, the pupils and parents were staging a protest demonstration against the government decision to close the school when the police baton charged them injuring two young persons. Given the Punjab Police's reputation for high-handedness and the tender age of the victims, the incident caused a lot of anger and dismay, prompting Chief Minister Shahbaz Sharif to order an immediate inquiry. As a matter of fact, no one saw the police actually use batons. The students, it now turns out, were injured in a stampede as the police tried to push back the protesters. Fortunately, their injuries were not too serious.
As largely expected and also apparent from the recent T-bills auction, the State Bank of Pakistan has opted for a generous cut of 100 basis points in the policy rate announced in its Monetary Policy Statement (MPS) on 24th December, bringing it down to a 10-year low of 8.5 percent for the next two months. While announcing the new monetary stance, SBP Governor Ashraf Mahmood Wathra underlined a number of factors for the interest rate cut, but the current relatively lower rate of inflation was obviously the main reason behind this decision. "CPI inflation and its expectations continue to follow a downward trajectory," he said, adding that SBP had now revised downwards its forecast range for average CPI inflation to 4.5-5.5 percent for FY15, well below the annual target of 8 percent. Moreover, a fall in inflation was broad-based since both food and non-food inflation were declining. A decline in the former was mainly the result of better supply conditions, while the latter was explained by a combination of factors including plummeting international oil prices as well as a decline in global commodity prices, lagged impact of earlier conservative monetary policy, moderating aggregate demand and a stable exchange rate.


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ICT 2014

Foreign Debt $61.805bn
Per Cap Income $1,386
GDP Growth 4.14%
Average CPI 8.6%
Trade Balance $-1.664 bln
Exports $1.966 bln
Imports $3.630 bln
WeeklyJanuary 25, 2015
Reserves $15.019 bln