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A long-standing demand of Islamic banks has been finally met. State Bank of Pakistan announced on 16th October, 2014 that, from now onwards, it will conduct outright trade of Government of Pakistan Ijara Sukuk (GIS) either on deferred payment basis (Bai-Muajjal) or on ready payment basis through Open Market Operations (OMOs) based on multiple price competitive bidding auction process. According to the SBP circular, all Islamic and conventional banks having Islamic branches will be eligible to participate in these OMOs. All participants in the OMOs would send their bids as per required format detailing face value of security and deferred price (in case of Bai-Muajjal) or price (in case of ready payment basis). Price should include accrued profit and can be quoted up to four decimal places. Each eligible participant will be allowed to submit a maximum of three bids in an OMO and minimum bid size will be Rs 25 million or its multiple thereof. If the deferred payment date falls as public/bank holidays, then the contracts will be extended to the next business day and there will be no change in the deferred payment price: The OMO result will be announced on the same date and successful bidders will send a contract to SBP for confirmation and settlement. In case of purchase or sale of GIS on deferred payment basis, the GIS will be transferred to the buyer on the deal date, while payment will be made on deferred payment date. As is the norm, State Bank will have the discretion to accept the bids on "pro rata volume" basis.

Of late, the Modi government has begun expressing itself quite muscularly both against Pakistan and China, aptly reflected as it is from its Home Minister Rajnath Singh's chest-beating declaration: 'Today, no one can give warning to India. We are a powerful country' - though the situation on the ground should have been just the opposite. It is India that has unleashed series of violations along the LoC in Kashmir and Working Boundary with Pakistan, and it should be Islamabad warning India. As for China, the Indian government was not only impolite and discourteous as it moved troops in the disputed area while Chinese President Xi was on its soil on a state visit; it has now tersely rebuffed the Chinese plea not to go ahead with the road network project in a territory before final settlement of its status. The question is: Does this warmongering reflect the ruling BJP's occasional belligerent posturing for domestic consumption, or is it part of a 'game plan' which many in Pakistan and abroad believe Narendra Modi has designed to 'finish the question of Kashmir once for all'. That he would amend Article 370 of Indian constitution, which grants Occupied Kashmir 'special status' he had promised to the Indian electorate, and as soon as he took oath of office he set about working on that. Unlike any of his predecessors he paid repeated visits to the disputed state and saw to it that the BJP digs deeper roots and win upcoming state assembly elections. For more than six decades, New Delhi had tried to suppress the Kashmiris' élan to be a free people by introducing a number of draconian laws enforced through the barrel of gun, but had failed. The BJP brains trust has come up with an alternative - win election, form government and ask New Delhi to abrogate or suitably amend Article 371.
The latest news on the trade accounts of the country are frightening. According to the trade data released by the Federal Bureau of Statistics (FBS) on 14th October, 2014, Pakistan's trade deficit in July-September, 2014 has expanded by as much as 45.11 percent to reach dollar 6.504 billion as against dollar 4.482 billion in the same period of last year. This was both due to a sizable fall in exports and substantial increase in imports. While exports fell by 10 percent to dollar 6.105 billion in the first quarter of FY15 from dollar 6.695 billion a year ago, imports rose by 12.01 percent during the quarter to reach dollar 12.519 billion compared to dollar 11.177 billion in the corresponding period last year. An alarming aspect was that country's exports have been declining since April this year despite the grant of preferential GSP + market access by 28-nation European Union and a host of incentives for exports announced in the last budget. On a month-on-month basis, the decline in exports reached almost 17 percent in September, 2014 while imports grew by 20.31 percent in the same month.
A two-hour launch speech delivered by the Chairman Pakistan People's Party, Bilawal Bhutto Zardari, miserably failed to connect with the gathering and we, sadly though, have our doubts that it would not help him arrest the party's popularity slide, particularly in Punjab. Bilawal is young and needs to visit every district in the country to connect with the masses in accordance with his late grandfather Z A Bhutto's strategy that he successfully employed to garner support for himself when he fell out with Field Marshal Ayub Khan in the 1960s. The son of Asif Zardari and Benazir Bhutto also must understand that now the contest is between party leaders such as Imran Khan and Nawaz Sharif and not just between the potential electables. Second, Pakistan of today has changed from the Pakistan of the 1970s and 40 percent of the voters are under the age of 30. No military general is at the helm anymore, so unlike his mother or her father he cannot target them. People want delivery of services and a better quality of life and will not be satisfied with mere 'clichés' or handouts. PPP has to come up with a plank of teaching "one to fish and not just giving a fish to eat". When Aitzaz Ahsan called for the leadership of the party to be given to people under the age of 50 years, he was underscoring the need for a younger leadership that could connect with the challenges of the present-day Pakistan.
Paradoxically, the city of Islamabad which is so much a day-and-night theatre of struggle for political rights and basic freedoms is least democratic in terms of self-governance. It is run by a couple of chair-bound bureaucrats, who offer the Isloos - that's what the city residents fondly call themselves - take it or leave it choices, least bothered if what they offer is what the people want. Ever since the founding of the city, in early 1960s, its governance has been a one-way traffic, bereft of any inputs its residents would have liked to make. Unlike anywhere in the world the million-strong city of Islamabad never had a local government. The existing fig leaf local government law, the Federal Capital Local Government Ordinance 1979, only extends to the rural areas of Islamabad Capital Territory (ICT), a dichotomy which attracted the Supreme Court order of July 17, 2013 that elections be held both in rural and urban areas. No wonder then more than a year on we have this draft bill, the Islamabad Capital Territory (ICT) Local Government Bill 2013, adopted by the National Committee on Interior and Narcotics. According to the draft bill, the local government in the federal capital will consist of Union Councils (UCs) in rural areas and a Metropolitan Corporation for the urban part of the ICT. The so-called city fathers will be elected, who in turn will elect mayor and deputy mayor. Since the draft bill has been adopted unanimously it is expected to be passed by the parliament almost in the form adopted by the committee.
What the Vice Chancellor of Agriculture University, Faisalabad, Dr Iqrar Ahmad Khan, had to say to a visiting team from National Management College in Lahore should be of serious concern to the Punjab government, indeed all provincial governments considering that irresponsible dumping of industrial effluents is a bane common to all. He told the visitors researching air and water quality issues that industrial effluents are being used to irrigate crops and vegetables. Eighty percent of the toxic effluents, he said, are going into water bodies and the residual 20 percent hazardous waste is discharged directly into the ground water. It is not difficult to imagine how this leads to toxic substances finding their way into the food chain and drinking water to cause a host of health problems, including life threatening diseases, to unsuspecting consumers.
The signing of the transit agreement for Central Asia South Asia Regional Electricity Market (CASAREM) 1000 project between the government of Pakistan and Afghanistan was hailed by Federal Finance Minister Ishaq Dar as a major step towards close partnership between the two countries. More tellingly the signing ceremony was attended by World Bank President Jim Yong Kim and US Special Representative for Afghanistan and Pakistan Dan Feldman - a reflection of the driving force behind the project.


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Foreign Debt $61.805bn
Per Cap Income $1,386
GDP Growth 4.14%
Average CPI 8.6%
Trade Balance $-2.807 bln
Exports $1.911 bln
Imports $4.718 bln
WeeklyOctober 20, 2014
Reserves $13.436 bln