Monetary policy
THE State Bank has once again decided to hold interest rates steady, to the dismay of industry. But in doing so, it is now betraying the first signs of fatigue as it tries to keep the outlook for the future upbeat. There is no doubt that the economy is slowing sharply, investment is plummeting and unemployment coupled with inflation charging ahead. For the first time this fiscal year, the State Bank has acknowledged that its growth target of 3.5pc “is likely to be revised downward”. Until November the bank was hopeful that the growth target would be met. So the natural question arises: what has changed between November and January that makes it likely for the growth forecast to be revised downward?
One reads the accompanying monetary policy statement in vain for an answer. The external sector “continued to strengthen”, business confidence as per the State Bank’s survey showed improvement for the third consecutive wave and fiscal developments “remained on track”, according to the statement. Cumulatively, the bank tries to argue, these contributed to “buoying the overall economic reform sentiment”. In agriculture its assessment is unchanged from November, with major crop estimates in the Kharif season growing “in line with expectations”, except for cotton. In industry, the pattern is also the same as in November, with gains being seen in export-oriented and import-competing industries while “inward-oriented industries continue to slow down”. Taken together, these developments lead the State Bank to claim that “the slowdown in most economic sectors appears to have bottomed-out, and a gradual recovery is expected in the coming months”.
So if all this is the case, along with “a healthy increase” in tax revenue collections of 16pc and improved foreign exchange reserves, then why is the growth forecast being downgraded and why has inflation remained higher than expected? Inflation continues to rise month on month despite the fact that in November too the State Bank claimed that the higher inflation out-turns were temporary in nature and attributable to upward adjustments in administered prices (power and gas) as well as “temporary supply disruptions”. How long are these “temporary supply disruptions” supposed to bedevil the inflation outlook, and how many more upward adjustments in administered prices are on their way? It seems the State Bank would prefer to not answer this question. In fact, the latest monetary policy statement gives the impression that the State Bank is trying to whitewash what is a rather dismal economic state of affairs. Dr Reza Baqir may be new to the realities of Pakistan’s economic management, but he should know that those before him who tried to walk this path of bargaining with the central bank’s autonomy and credibility paid a heavy reputational price for it. The State Bank governor has a chance to save himself from considerable embarrassment down the road, and should stop trying to have it both ways.
Diplomatic dupery
“NONSENSE” and “a thousand no’s” is how Palestinian President Mahmoud Abbas reacted when he heard President Donald Trump unveil a plan whose only aim seemed to be to pamper the America-Israel Public Affairs Committee in an election year.
Mr Abbas rejected the plan, and declared his people “will not kneel and we will not surrender”.
With Israeli Prime Minister Benjamin Netanyahu standing beside him, an American president who has upheld Israel’s occupation of a bit of even non-Palestinian territory — Syria’s Golan Heights — gave a verdict that was obviously ex parte, because there was no representative from the very people whose land was the subject of this diplomatic deception.
The ‘deal’ would invite ridicule because it brazenly upholds Israel’s crimes against the Palestinian people and underwrites the Jewish state’s unending violations of international treaties — to most of which America is party.
By accepting his plan, Mr Trump said, Israel had taken “a giant step toward peace”.
What exactly is this perfidy eulogised by Mr Trump? Answer: Israel will stop building new settlements on the West Bank for four years.
In other words, if the Palestinian Authority recognises Israeli sovereignty over the existing settlements, the Zionist state will after four years begin an open-ended renewal of the process of theft of Palestinian territory.
During this ‘freeze’, Palestinian statehood will be ‘negotiated’.
Moreover, the word ‘sovereignty’ is missing from the Trump idiom because it visualises a Palestinian state with its capital in eastern Jerusalem provided the Palestinian people take steps to become ‘self-governing’— a big diplomatic hokum.
The talks between Israel and the Palestinian Authority have remained suspended since 2014, because the Palestinians realised — perhaps too late — that Israel has no intention of giving up its pursuit of lebensraum, and that its sole aim is to delay the talks to enable it to change the West Bank’s demographic character.
Given the Arab-Islamic world’s powerlessness, there is little it can do to make Israel attach some sanctity to the agreements it signs.
The latest American plan serves to add to the heaps of treaties Israel and America have signed on a two-state solution. The most categorical of these documents was the 1993 Declaration of Principles — called the “peace of the brave” by former president Bill Clinton — but Israel destroyed this peace edifice brick by brick, and neither the Arab-Islamic world nor an America subservient to Israel had the courage to break Zionist hubris.
Yet another crackdown
IF there were a tutorial for how to alienate a disaffected people even further, then the government is certainly making liberal use of it. The seemingly arbitrary arrest of prominent Pashtun Tahaffuz Movement leader Manzoor Pashteen in Peshawar on Monday is not a new tactic. Previous governments and regimes in Pakistan have likewise conflated the exercise of constitutionally protected civil and political rights with crimes against the state in order to crack down on politicians and activists. Yet, instead of studying the flawed record of previous governments and rectifying matters, the current setup has failed to address the genuine concerns of citizens of this country who at the very least should be assured of a free and fair trial based on actionable evidence. The government’s tone-deaf approach is only likely to intensify the people’s estrangement, particularly following what transpired in Islamabad on Tuesday. The detention of over two dozen attendees of a peaceful protest outside the National Press Club in support of the PTM leader — including a sitting parliamentarian, women and students — was an excessive and foolhardy use of police force.
What makes these recent moves particularly counterintuitive is the fact that, as recently as Saturday, former KP chief minister and current Defence Minister Pervez Khattak extended an olive branch to the rights-based alliance, claiming that the government “want[s] to bring the PTM into the national mainstream as the country is passing through a difficult period of its history”. The government cannot be so cavalier in sending mixed signals when its conduct may prove the difference between conciliation and conflict with its own constituents. Pakistan is at a crossroads today, as a reawakening of political consciousness across society is increasingly exposing the limitations of a security-centric approach to governance. Suppression is not the answer. It is time to learn lessons from the past and acknowledge that dialogue is the only way out of this morass — and towards a future in which the rights of all Pakistanis are secured.