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The State Bank of Pakistan has reduced its policy rate by one percent or 100 bps; it has, however, protected the small saver by keeping the floor at five percent and slashing the rate only by half (0.5 percent). Priority, this move will primarily impact large network banks having a higher number of saving accounts. Mid-tier and small banks already pay a higher rate on saving deposits than the big five do; their deposits mainly constitute term and time deposits. The government would also lose some tax from big ones since their interest payments will be higher and lending rates lower than before, thus squeezing their profitability.

The four suspects arrested for the massacre of 45 members of the Ismaili community in Karachi are reported to have also confessed killing human rights activist Sabeen Mahmud because of her campaign against the Lal Masjid cleric, Abdul Aziz. Alumni of reputable educational institutions, these young men had connections with the violent extremists in the tribal areas and shared their hatred of Shias. According to investigators, they massacred the Ismailis both out of a sectarian motive, and to create an impact at the international level of their ability to wreak terror. Many find it hard to deal with the fact that these men have good educational backgrounds and belong to well-to-do families contrary to the common image of a terrorist who is poor and usually product of a madressah.
Federal Finance Minister Mohammad Ishaq Dar has done well to timely clarify that there shall be no tax on foreign remittances. He has, therefore, laid to rest any apprehension that may have risen in recent days. How ironic it is that those who man country's tax machinery often lose sight of the fact that the law provides a legal cover and therefore any remittance from abroad shall be exempt from any inquiry by tax offices. Dar's intervention to protect this vital inflow, which is by and large, is keeping the country's economy afloat and the current account deficit under control ($1.4 billion). Pakistan is likely to suffer a large trade deficit of 17 billion dollars. And, 16 billion dollars received in remittance would cover this trade gap. Even a fall in international oil prices would not have been able to bridge this trade gap since saving on POL import is equivalent to higher imports of other commodities. And, exports are also weak due to softening of international prices and their fall may be due to supply side constraints such as energy shortages, infrastructural collapse and low labour productivity.
Having nearly succeeded in defanging Iran's nuclear programme, the West is now set about neutralizing Pakistan's nuclear weapon capability. To undermine Pakistan's nuclear programme, a media campaign was launched as soon as the P5+1 clinched the 'framework' understanding with Tehran. The opening shot was fired by The New York Times which proposed 'attention be turned to constraining Pakistan's nuclear and strategic capabilities'. But now the storyline is different, and not the old harangue that Pakistan's nuclear assets were at the risk of falling into the terrorists' hands. Now, as reported by The Sunday Times, the Saudis have taken the 'strategic decision' to acquire 'off-the-shelf' atomic weapons from Pakistan. And its sources are the same, which fed the NYT: 'unnamed American officials'. That the atom bombs are market commodity and you can buy them off-the-shelf is a claim that the report made twice. It's the nuclear technology that is transferable, but not the bombs. As of now Saudi Arabia has neither acquired technological infrastructure nor the skilled expertise to exploit it. Yes, Pakistan is now a recognised nuclear weapon state, but its nuclear assets, both weapons and technology, are not for sale. No wonder then, the Foreign Office spokesman has rubbished The Sunday Times story. 'An entirely baseless and mischievous campaign was being carried out in the international media regarding Pakistan's nuclear programme,' he said at a media briefing on Thursday. Pakistan remains committed to its consistent policy that its nuclear programme is for its own legitimate self-defence and is being maintained as a credible minimum deterrent. That it can be stolen or is available for sale is an impressive that can be effectively countered by the argument that the buyers of this humbug have long gone into oblivion.
One of the upshots of the Prime Minister Nawaz Sharif-led delegation's Kabul visit last week was Pakistan's commitment to start work on the Torkham-Jalalabad Road, and that work has begun. This is one such tangible delivery from Pakistan the outside world wanted as proof that President Ashraf Ghani is right in turning the page on decades-old bitterness between the two neighbours. An inaugural ceremony was held in Jalalabad on Monday to kick-start construction of an additional carriageway along the Torkham-Jalalabad road. To be constructed by Frontier Works Organisation (FWO) the exiting road will be widened to 48-foot to turn it into a 4-lane carriageway. The entire cost would be borne by Pakistan. Although, the project had been agreed to some years back, the work did not begin for one or the other reason. No more of the undeliverable commitments made to the Afghan government - that's the crux of Islamabad's pledge to the National Unity Government in Kabul which was conveyed to the Afghan government as prime minister made his first visit along with Army Chief General Raheel Sharif and other senior military officers. Even more important commitment made to the unity government was Pakistan's decision to treat the so-called Afghan insurgents including Taliban as 'terrorists' and to hunt them out on both sides of the common border, making use of shared intelligence. To this effect an agreement was signed between the Inter-Services Intelligence (ISI) Directorate and the Afghan National Directorate of Security (NDS) during that high-level visit. Perhaps, but for some misinformed criticism in Afghan media the ISI would have kept the agreement under wraps. But given the misperception that despite Islamabad's decision to treat Taliban across the board as terrorists their spring offensive is more lethal the Pakistan side had to reveal the nature of the agreement between the two intelligence agencies. According to the ISPR chief's tweet on the matter, the 'MoU signed by ISI and NDS includes intelligence sharing, complementary and co-ordinated intel operations on respective sides'.
It comes as a shock to hear that the murder of Sabeen Mahmood and the massacre of 45 Ismailis were two different dastardly acts that were allegedly committed by four individuals who never went to a madarasah (religious seminary) but were educated in a top business institution and privately operated engineering colleges of Karachi. Eight others of the gang - including the real mastermind - are yet to be apprehended. In case this is true, this only just goes to show that our education institutions, including the well-known liberal institutions mirrored on western style of schooling, have been infiltrated by teachers with an intolerant bent of mind. And, it is easy for them to identify students who can be moulded to participate in such undesirable activities.
Finally, humanity has prevailed: Indonesia and Malaysia have offered shelter to 7000 'boat people' adrift at high sea for the last many weeks. They were denied landing by show of force by the two countries, rebuffing appeals from a number of human rights organisations. The shelter being provided is temporary and they would take no more. However, Thailand whose long overdue action against their highly organized human smugglers syndicates provoked the governments in Jakarta and Kuala Lumpur to push back the boat people remains in denial. And so are the governments of Myanmar and Bangladesh from where come the boat people, fleeing persecution and poverty. Human smuggling across high seas to green pastures in Malaysia and beyond has been a flourishing business for quite some time. Only during the first three months of 2015 about 25,000 migrants left Myanmar and Bangladesh on rickety boats, some reaching nowhere as their traffickers abandoned them at sea fearing interdiction by coastal guards of intended destination navies. What terrible ordeal these unfortunate seekers of better fortune and safer life an incident that took place on a stranded fishing trawler in the Andaman Sea last week go through merits recall - to comprehend the enormity of challenge of illegal migration from homelands to other countries. About 800 people, half of them Rohingya Muslims from Myanmar and half from Bangladesh, were stranded on a fishing trawler abandoned by smugglers frightened by crackdown announced by Thailand and joined by Indonesia and Malaysia. As rations dwindled they split up and then there was 'it's us or them', some yelled and the fighting started. By the time rescue was made more than 100 of them had died because of violence and starvation. And this was not the only boat found abandoned at sea. And the Andaman Sea is not the expanse of blue water which is devouring up migrants fleeing poverty and persecution the Mediterranean is also eating up humans on the run from oppression and deprivation. Of some two thousands who drowned on way to greener pastures in Europe include 950, some locked in the hold, went down with the ship.


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Banking Review 2014

Foreign Debt $61.805bn
Per Cap Income $1,386
GDP Growth 4.14%
Average CPI 8.6%
Trade Balance $-1.586 bln
Exports $1.932 bln
Imports $3.518 bln
WeeklyMay 21, 2015
Reserves $17.75 bln