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According to data released by the Pakistan Bureau of Statistics, Large-Scale Manufacturing (LSM) growth was 1.86 percent in the first quarter of the current fiscal year (July-September) over the corresponding period last year. The growth though small was led by automobiles (13.9 percent), electronics (7.45 percent), chemicals (6.2 percent), textiles (1.03 percent), food and beverages (2.71 percent), paper and board (2.9 percent), rubber products (6 percent), pharmaceuticals (2.75 percent) and petroleum products (0.94 percent).

There may be quite a few sources for the turmoil currently buffeting our polity, but the one that stands above all is quality of the national electoral process. The last general elections, held in June 2013, had then won appreciation both at home and abroad, not only because the voters had turned up at the polling booths daring dire threats the turnout was clearly above the normal. Among factors that generated so much acclaim for the event the most outstanding was the unbounded faith the masses had in the then Chief Election Commissioner former Justice Fakhruddin G Ebrahim's tested sense of impartiality - though it is a different matter that he resigned soon after - the cause for it being more about jurisdiction of his office than his personal integrity. For the last many months search is on to find a suitable permanent substitution, while making a go by having judges of the Supreme Court as temporary fillers. Not that filling up the post of Chief Election Commissioner is a difficult legal hassle; there is a clearly-laid down constitutional process and if followed earnestly Fakhru Bhai's successor would have been there in just a fortnight or so. In fact, unbelievably, the issue is about the availability of suitable candidates or any legal and constitutional intricacy. The issue, perceptibly, is the unspoken yet unmistakable mindset on the part of the two constitutional consultees, Prime Minister Nawaz Sharif and Leader of Opposition Syed Khursheed Shah, that the stuff called Chief Election Commissioner can be casted the shape one liked. But no more of it; challenging the unending dithering on the part of the 'consultees' the Supreme Court has ordered the government to appoint a Chief Election Commissioner by December 1, 2014, as the officiating Chief Election Commissioner Justice Anwar Zaheer Jamali will vacate that office and return to the court.
At a time when the economy of the country is beset with a host of problems, there is at least one sector, which is working efficiently and performing its role with used aplomb. This is the sort of impression one gets after going through the quarterly Compendium of the banking sector released by the State Bank on 20th November, 2014. The aggregate profit (before tax) of the banking sector reached a historic high level of Rs 176 billion during end-September, 2014 quarter, showing a hefty increase of 44 percent over the same quarter last year. Consequently, the return on assets (ROA) and return on equity (ROE) went up to 1.4 percent and 15.9 percent respectively, up from 1.1 percent and 12.3 percent a year earlier. Capital Adequacy Ratio (CAR) of the banking system improved to 15.5 percent in September, 2013 as compared to 15.1 percent a quarter earlier, largely on the back of healthy profits. However, it did not denote any change compared to the same quarter of the previous year. It may, however, be noted that CAR in Pakistan is well above the minimum ratio of 10 percent set by the SBP to implement strict Basel-III capital standard. Encouragingly, stress test results also show that capital base of the banking system is strong enough to withstand unusual shocks on account of credit, market and liquidity risks. Indicators of asset quality, with marginal changes, also reflected stability. Non-performing loans (NPLs) to loan ratio (net of provisions) at 3.2 percent in September, 2014 was far below its peak of 6.4 percent in September, 2011.
Sunday's suicide bombing at a volleyball game in eastern Afghanistan's Paktia province that left at least 50 people dead and 60 others injured, many children among them, is a horrific reminder that the war in Afghanistan is not about to end yet. In fact, the Taliban have been intensifying attacks as international forces prepare to wrap up their combat mission. As per an original plan the US forces would have no combat role in Afghanistan post-come December. About 9,800 US troops and some Nato forces - a total of 12,000 international troops - were to remain in the country to train Afghan forces and pursue al Qaeda remnants. Exhausted from an endless war, Obama administration wanted to end military operations against the Taliban as soon as possible. At one point, Vice President Joe Biden had declared that the December 2014 combat troops withdrawal date was "etched in stone". That has changed. President Barack Obama has now decided to extend the US forces combat role in Afghanistan for at least another year.
In an exclusive interview to Business Recorder Federal Minister for Water and Power and Defence Khawaja Asif claimed that the Sharif administration has formulated a strategy to generate maximum power to cope with the country's future needs. He added that the government is determined to end loadshedding through not only enhanced generation but also reducing distribution losses; and maintained that appropriate steps have been taken for installation of gas conversion equipment on gas turbines for Nandipur power plant besides China's assurance to support Pakistan in the energy sector.
According to Imran Khan, come what may, his much-ballyhooed "decisive rally" will be held in Islamabad on November 30. Interior Minister Chaudhry Nisar Ali finds no fault in PTI chief's plan so long it is peaceful. However, beyond these apparently concurring positions there are quite a few "ifs" and "buts", the most daunting being their difference on the venue of the rally. The PTI chief is determined to hold the rally on the Constitution Avenue/D-Chowk, which is part of the Red Zone, warning the government "if you create hurdles we will face them, and we are ready to go to jail". At his rally in Gujranwala two days ago he was more explicit: "On November 30, there will be a decisive battle between status quo and us. It will be decided on the day whether they (government) win or we form a Naya Pakistan". "If they (PTI) have plans for a political activity, they will be provided security. But if their purpose is to attack the government, the law will come into action," says Chaudhry Nisar. Unlike previously, Prime Minister Nawaz Sharif's patience seems to be wearing thin. He says it is the responsibility of the government to protect and preserve the law and constitution. Given its bitter experience, how the 'Azadi' and 'Inqilabi' marches violated the mutually agreed agenda as their marchers moved into the Red Zone in violation of the agreed venue and the timeline for their presence in the Capital, the government is now prepared to take a hard line. Nowhere else but at the D-Chowk would the PTI like to hold its November 30 show of force. The battle-lines have been drawn. Barring some kind of divine intervention or third-party 'advice', Islamabad is all set to be the venue of a possible Armageddon. While the self-assured hubris among minister that is inflated by their reading that 'dharna' politics has had its last hurrah, Imran's confidence is pumped by his massive rallies in Punjab and Sindh. Will he come heading a more spirited and better equipped march, we will know in case there is a battle royale. The government, however, is unwilling to take a chance. Some 15,000 police and paramilitary personnel would be deployed ahead of the rally. And should the need arise the government will call in the army in aid of civil power under Article 245 of the Constitution, which was there on the site till early this week when it was withdrawn at the completion of its three-month term, under a new ordinance.
Dr Hafiz Pasha, former Finance Minister during Nawaz Sharif's government, gave a damning indictment on the state of the economy during a conference organised by the Institute for Policy Reforms that he helped establish. None of the macroeconomic targets was met during the first quarter of the current fiscal year (July to September) with the exception of fiscal deficit and that was attained because releases under the Public Sector Development Programme (PSDP) were only 8 percent against the benchmark of 20 percent of the total budgeted in the first quarter, Pasha argued. But by the end of the fiscal year the deficit would be higher by 1.1 percentage points than what was budgeted, he averred, or around 6 percent as opposed to the budgeted 4.9 percent. Growth target of 5.1 percent would also not be met and Pasha estimated actual growth at around 3.5 to a maximum of 4 percent.


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Banking Review 2013

Foreign Debt $61.805bn
Per Cap Income $1,386
GDP Growth 4.14%
Average CPI 8.6%
Trade Balance $-2.380 bln
Exports $2.181 bln
Imports $4.561 bln
WeeklyNovember 13, 2014
Reserves $13.268 bln