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The sealing of the deal early on Monday, the 5th October, 2015 for creating the world's largest free trade area is of course a major economic development on the global scene. Working around the clock for days past their deadline, trade ministers finally announced that they had reached an agreement on the ambitious Trans-Pacific Partnership (TPP) just before dawn, capping five years of difficult talks led by the United States. The US Trade Representative, Michael Froman, said that "after five years of intensive negotiations, we have come to an agreement that will create jobs, drive sustainable growth, foster inclusive development and promote innovation across the Asia Pacific Region." President Obama was so delighted that he remarked that the accord "reflects America's values and gives our workers the fair shot at success they deserve. We can't let countries like China write the rules of the global economy. We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment". The accord involves significant market openings from Canada, the US and Japan for farm products. In particular, Japan has made major concessions to reduce tariffs and lower non-tariff barriers on food imports, which has long been a challenging domestic political issue and a chronic sore point with food exporters like Australia, New Zealand and the US. The US agreed to reduce its tariffs on Japanese car parts from non-TTP locations. The agreement also establishes mechanisms to handle disputes between foreign investors and government; requires governments not to discriminate between foreign investors in major contracts; and demands countries like Vietnam and Mexico to improve their labour standards. Besides, the agreement addresses new issues like data trade and intellectual property that have not been covered in multilateral trade pacts in the past.

Somehow the higher judiciary and Election Commission of Pakistan entertain clashing perspectives on the question how to obtain a level playing field for the contesting candidates. Quite periodically, the two have differed on the issues like delimitation of constituencies, character personas of candidates and verdicts of election tribunals, their contending worldviews under sharper limelight once again as the NA-122 re-poll draws near. The ECP has warned that it cannot guarantee free and fair election to this high-profile electoral contest after rejection of its code of conduct by the Lahore High Court. Both the PTI chief Imran Khan and Railways Minister Saad Rafique of PML-N were served notices by the ECP for violating the code of conduct a day earlier for showing up and making speeches at public meetings of their respective party candidates. This was in violation of the ECP rules barring the President, Prime Minister, ministers and other public office-holders from attending election rallies. The Lahore High Court rejected these rules as null and void. The commission's right to issue rules to ensure free, fair and transparent polls enjoys the sanctity of the Supreme Court which had suspended a similar order of the Lahore High in August. To its immense chagrin this past Tuesday was a day of double whammies; on that day the Rawalpindi Bench of the Lahore High Court directed the ECP to undertake afresh delimitations of union councils and issue revised election schedule. As if the higher judiciary's restraining orders were not enough to put the Commission on the back foot, the Prime Minister is also unhappy over its embargo on the federal government's Kissan package, whatever is left of it now, and the government has filed an appeal for its suspension.
International Monetary Fund (IMF) Chief De Mission for Pakistan Harold Finger has stated in an interview that China-Pakistan Economic Corridor (CPEC) is of great significance for economic development of Pakistan as it can provide the required infrastructure to improve Pakistan's competitiveness and create a business-friendly environment. Not only has he underscored the need for giving priority to the infrastructure projects included in CPEC, he also stressed the need for carrying out proper inspections, undertaking accurate assessment of priorities with correct cost estimation and making timely availability of funds. He has, however, asked the government to remain within budgetary allocations. Injecting a lot of clarity in his argument, he has suggested that the fiscal deficit target is not exceeded while projects are built as per the Public Sector Development Programme (PSDP).
Protesting the Rangers Operation in Sindh, the Muttahida Quami Movement (MQM) members of provincial and federal legislatures tendered resignations en masse from the elected houses in early August. Several weeks on, their resignations stand unaccepted and the Senate Chairman Raza Rabbani has finally given an interim ruling on the issue. The chairman in his detailed reasoning on the subject stated: "It seems resignations have been tendered in protest and in furtherance of a political agenda". Addressing the Upper House on Monday, he also claimed that "there is reasonable material available on the record that gives me a perception that the resignations of some may not be voluntary or genuine and the true intention is not to vacate the seat". But then he takes a somersault stopping short of giving his final ruling insisting it is he who is the final authority in this case and would give his ruling in due course of time, which can be anything. The framers of our Constitution, however, did walk such a muddled labyrinth; absolutely unburdened by 'perceptions' and 'intentions'. The relevant Article 64 mandates that a member of parliament "may, by writing under his hand addressed to the Speaker or, as the case may be, the Chairman resign his seat, and thereupon his seat shall become vacant". Or, "A house may declare the seat of a member vacant if, without leave of the House, he remains absent for forty consecutive days of its sittings". Does it mean that the members, who handed over their resignations to the Speakers of National and Sindh assemblies and Chairman of Sensate under full glare of our ubiquitous electronic media, were bluffing the public into believing that they mean business? They were not; at least that is what they conveyed and remain firm in that position rejecting the government mediator's moves resulting in the inordinate delay in acceptance of their resignations.
Amidst mounting pressure to investigate massive irregularities and delay in the Nandipur project that has cost the beleaguered exchequer tens of billions of rupees more than the original estimate without a single MW or even much less coming into the national grid, the PML-N government has decided to conduct third-party audits. The most glaring fact that has emerged in the Nandipur project is that it was an Achilles heel for the PPP-led coalition government as well as the incumbent PML-N government. The PPP government was accused of inordinately delaying the project through the refusal attributed to the Law Ministry then led by Babar Awan to issue a no-objection certificate that would have enabled the deployment of the procured machinery to the project site. Shahbaz Sharif in his inimitable style not only accused the former government of corruption but committed to the nation that he would complete the project in record time. While he did meet his commitment to inaugurate the plant in record time amidst much fanfare with the Prime Minister attending the ceremony yet he has failed to make the project operational to this day. The reason: those charged with the responsibility of commissioning the plant, did not have the necessary technical expertise to determine the appropriate fuel for operating the plant in terms of cost and availability as well as whether the additional cost required for additional procurement (of machinery and the Chinese company's services) would make the project unviable. The current scenario shows that the project is not only cost ineffective but also technically defective.
But for Islamic State becoming a stakeholder in the Syrian civil war President Assad might have gone by now. That is no more the case; he is stronger now than before thanks to the changing battlefield realities and the growing perception that as a lesser evil he should be part of the solution as against working on any minus-Assad formula. Even the United States, President Assad's principal non-Arab critic, is now prepared to wait for an orderly transition in Syria instead of his outright instant ouster. A tyrant Assad may be but he is being propped up as the weapon of choice to fight back the brutal outfit, so-called Islamic State. So if Russia wanted to join an anti-Islamic State air action it was considered to be no problem - until it actually happened. But much to the chagrin of anti-Assad coalition partners on the very first day of air strikes the Russian planes struck a camp of the US-trained rebels instead of any Islamic State positions. And Moscow is not apologetic about it, saying it would bomb the Islamic State and "other terrorist groups", and that the strikes were "legitimate, because they were in support of a government". It now appears that in all probability, Moscow has joined the Syrian civil war to help its strategic ally in Damascus under the cover of fighting the Islamic State. That is to great disappointment and serious concern of the United States, its European allies and the anti-Assad regional countries, including Turkey whose President Erdogan declared that he is losing patience with Russian violations of his country's airspace, although Moscow has explained that its warplanes had violated Turkey's airspace by mistake.
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.


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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 08, 2015
Reserves $20.05 bln