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Why do the investors shy away from investing in Pakistan? There can be a host of reasons. Multinationals do not want this country to be a source of output for products they market world-wide because of political and regional instability as their global supply chain has to be least affected since they constantly endeavour to retain and increase their market share and cannot afford any disruption. We are very conscious of our location being in close proximity of the world's two most populous countries - China and India. However, the infrastructure needed to move goods is not only missing but also our relationship with our eastern neighbour is not conducive to business either. Investors base their decisions on various factors such as availability of the raw material that they need for their products or close proximity of the market for their products, or both; and above all else they gauge the ability to quickly get in and out of a country they invest in. They also look at cheap land availability, taxation system, infrastructure, as well as availability of skilled labour prior to investment. Therefore, the laws relating to tax liability need to be transparent and a judiciary system which ensures speedy justice.

Indian provocations along the Line of Control (LoC) and the Working Boundary (WB) continue to claim innocent lives. In the latest round of shelling by the Indian Border Security Force (BSF) across the WB on Friday at least eight people were killed and another 47 injured, among them 24 women and 11 children. Ten of the injured are in a critical condition. CoAS General Raheel Sharif who rushed to the place to inquire after the injured expressed a common sentiment when said the Indians had "crossed all limits to terrorize Pakistan's civilian population disregarding international conventions and norms." For those close to the LoC and the WB, it has been like living in a war zone. During the past three months alone, Indians have violated the cease-fire as many as 143 times, killing 24 people. Yet there is no sign of tensions easing up.
The State Bank of Pakistan (SBP) says despite the global turmoil it sees no threat to Pakistan's economy as its macroeconomic fundamentals remain strong and SBP is closely monitoring the movement of currencies in international and domestic markets. In case of need it would take a stern action against speculators who are contributing towards weakening PKR against the US dollar which is the currency of intervention. We have, in these columns, argued all along for minor adjustment of PKR for Pakistani exporters to remain competitive. However, successive governments have tried and failed to keep the parity unchanged for long periods of time resulting in the country's forex reserves coming under pressure. Only when the Fund has forced a downward change, SBP has hurriedly complied with because the country needed the dollars since the alternate was default with all its painful consequences.
An office memorandum issued by the Cabinet Division on 18th August 2015 raised salaries of members of the federal cabinet (ministers and ministers of state) by a whopping 27 percent - from 76,032 rupees to 99,808 rupees per month for a minister and from 70,331 rupees to 92,324 rupees per month for ministers of state. In addition, the ad hoc allowance at the rate of 7.5 percent of the salary would be extended to cabinet members from 1st July 2015 implying that a federal minister would receive an additional 7,486 rupees per month while a minister of state would receive an extra 6,924 rupees per month. An ad hoc relief allowance paid to federal ministers and ministers of state in 2014 would be frozen at the level of its admissibility on 30th June 2015, the office memorandum states. This memorandum has been in pursuance of a rule that links the salaries of cabinet members with that of senior bureaucrats. Since the bureaucrats have received a raise, therefore, so will the ministers.
Prominent self-exiled Baloch separatist leader Brahamdagh Bugti's message on the ninth death anniversary of his grandfather, Nawab Akbar Bugti, is at clear variance with his stated position for long. He has said what he never said before. He says he is prepared to give up his demand for an independent Balochistan, and for this he is open to talk with the government. Brahamdagh said he was even willing to meet Interior Minister Chaudhry Nisar Ali, who then happened to be in London, "if he [Nisar] desires so, because we are political people and want a political solution to the problems". Until this change, reflected from his interview with the BBC Urdu, he was a staunch opponent of peaceful solution to end the lingering conflict in Balochistan and would often invite intervention by the United Nations and members of the international community. Talking to government, he would say was not on his agenda. Why such a radical U-turn in the stated position of the Baloch Republican Party chief, to this there is no clear answer - except for the dramatic transformation of ground realities in the wake of military operation now under way in a larger part of the province of Balochistan. While the insurgents' hideouts are being destroyed and their networks cracked the scores of their foot soldiers and their commanders have voluntarily surrendered and offered to be part of the peace process. On the political front also there are quite a few developments - the most significant being the Baloch tribal leaders' meetings with the Khan of Kalat Salman Daud - that possibly triggered fear in the young Bugti's mind of missing the bus. There is no evidence yet if he took this position after consultations with his on-ground BRP leaders. But that doesn't seem to be his worry, despite his perfunctory remark that he would want his "friends, comrades, political allies and people" to be on board with him.
Some 200 children living at brick kilns were enrolled in schools of Nankana Sahib this past Tuesday. Since only 200 out of about half a million children working at over 200,000 brick kilns will go to school, one may say it is just a drop in the ocean. But it is not - it is huge breakthrough given that it took almost half a century to break the taboo of child labour in Pakistan. And perhaps, without the International Labour Organisation's (ILO) hard nudging even by now this would not have happened. The Punjab government conducted a survey in four districts of Punjab including Nankana Sahib on child labour at brick kilns. Of them 200 have been admitted in schools that fall within two kilometres of radius from where they lived. Given that children working at kilns are the bonded labour and their retrieval from there is not easy it remains to be seen if this first drop would unleash the much wanted torrential rains. But such rains must come. For too long the children of the poor and hapless in the country have been easy victims of forced labour at brick kilns, auto-mechanic shops and quite a few other such sweat shops. How far behind rest of the world we the so-called ideological nation are the statistics collected by independent sources are very disturbing. According to Society for Protection of Rights of Children's 2014 report, there are 25 million children who are out of school, and that constitutes half of the country's child population. A UN report says 72 percent of children working at such hovels do not have any contact with their families and 10 percent have no information about their parents. The ILO places the child labour at 12 million and UNICEF at 10 million. Globally, Pakistan ranks number three with high prevalence of forced and child labour.
"Our hands are clean; come look at them." This should have been the reaction of the PPP leadership to the arrest of Dr Asim Hussain and arrest warrants for Yousuf Raza Gilani and Makhdoom Amin Faheem. A party that has a history of bravely facing difficult times was expected to keep its cool, instead of showing signs of panic to the utter delight of those to whom it is suggestive of guilty conscience. How come, to Syed Khursheed Shah, the arrest of Dr Asim Hussain means implicating Asif Ali Zardari, a threshold, if crossed, would mean an open war. And, Zardari feels the PPP is being pushed against the wall just because the corrupt are being held accountable. It is not the first time that the top leadership of a political party in Pakistan, or anywhere else in the world, has been accused of committing corruption. It is for the prosecution to establish the guilt, and if the PPP's hands are clean there should be no problem. But if the National Action Plan (NAP) under which the action is being taken is used as a tool for political victimisation, then its capacity to stem the tide of terrorism would diminish and it would go to the benefit of terrorists. But for that to happen it is imperative that the PPP leaders should face them in the courts and courts should see to it that they not only deliver justice but are seen to have delivered justice. Frankly speaking, there are not very many takers of claim that the PPP is being victimised in order to subvert its rejuvenation drive now in progress under its new leader, Bilawal Bhutto Zardari. Somehow, the man in the street believes that not only the PPP but almost all political parties have crooks and thugs under their wings, and if some of them are involved in anti-state activities he is not greatly surprised. Rightly then it would be in the larger interest of all political parties, including the PPP, to help the courts weed out such criminals from their ranks.


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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 $-2.378 bln
Exports $2.016 bln
Imports $4.394 bln
WeeklyAugust 27, 2015
Reserves $18.509 bln