Slip of the tongue?
POLITICIANS are known to make embarrassing statements, and then row back by saying they were misquoted or that their words were taken out of context. But when a country’s prime minister speaks in parliament, with the eyes of the world on him, there is very little room for error, and words must be weighed carefully.
Speaking in the National Assembly on Thursday during the ongoing budget session, Prime Minister Imran Khan raised many an eyebrow when he referred to slain Al Qaeda chief Osama bin Laden as a ‘shaheed’ (martyr) just after saying he was “killed” in the 2011 Abbottabad raid. While the opposition in the house quickly pounced on him for making this grave error of judgement, the international media has also run with the story, using the prime minister’s words as a peg.
Two senior members of the cabinet have — going into damage-control mode — referred to Mr Khan’s words as a ‘slip of the tongue’, but perhaps it would be better if the prime minister himself cleared the air.
It should be reiterated that Osama bin Laden’s killing on Pakistani soil by American forces was without doubt an extremely low point in this country’s history. The Saudi militant, who earned his stripes in Afghanistan in the US-sponsored ‘jihad’ against the Soviets, evolved into one of the world’s most dangerous men, overseeing a deadly terrorist network that wreaked havoc around the globe.
Therefore, bestowing the title of martyr upon him is unwise, and will not help to improve Pakistan’s image among the comity of nations. Mr Khan has in the past avoided labelling the late Al Qaeda chief as a terrorist, and his views on militants have often been described as ambiguous. But in the given circumstances, especially with hostile actors looking to make things difficult for Pakistan, the prime minister must send a clear message that Osama bin Laden has done no great service to Pakistan or the Muslim faith, and certainly does not deserve to be called a ‘shaheed’.
Interest rate surprise
THE State Bank has done it again. For the third time, it has held an unscheduled meeting of the Monetary Policy Committee and decided to slash the key policy rate by 100 basis points. With the move the total interest rate reduction since mid-March, when the lockdowns and disruptive impact of the Covid-19 pandemic hit Pakistan, comes to 625bps. This is, quite possibly, the sharpest monetary easing in the country’s history, since it represents a near halving of the policy rate in a matter of three months. And this may not be the end of the cycle either as further rate cuts in the months ahead remain a distinct possibility.
There is little doubt that the situation facing the country calls for extraordinary measures. The rate cuts have been well received by the business community and have had a significant impact in terms of easing debt-service expenditures of the government, though specifically quantifying the impact is difficult. The economy is now in the midst of a slowdown the likes of which we have never seen before, with the growth rate plummeting to negative territory, and the clouds of uncertainty that have produced this plunge far from lifting. At the same time, the global economy is also undergoing a sharp deceleration, with ominous implications for the sources of Pakistan’s external earnings: remittances and exports. The optimistic take on elevated foreign investment in FY2020 owes itself almost entirely to the renewal of telecom licences earlier in the fiscal year, so this data is hardly likely to persist much into the future, or serve as a driver of future growth.
The times call for using all available levers to help the economy, but that doesn’t mean that the dangers associated with these moves have receded. Lax monetary policy risks creating asset bubbles, and coupled with the tax incentives given to the property sector, the benefits could easily prove elusive for the real economy as money flees for speculative returns on offer in property and stock markets instead. It can also adversely impact the exchange rate, which is already under pressure. The State Bank says that with reserves finding strength in the past week through $1.5bn worth of (debt-creating) inflows, coupled with a stable current account and external financing requirements met comfortably, this danger is manageable. We can only hope it is right. It would be wrong to fault the decision to slash rates so steeply, but it is equally important to emphasise that the State Bank must remain mindful of the dangers associated with such moves. Pakistan has to now undertake another round of steep macroeconomic adjustment of the sort that was just being completed when the pandemic hit, and coupling this with the imperative to shore up a flagging economy will prove to be a tough high-wire act.
Airlines’ concern
THE report of Etihad Airways becoming the third major Gulf airline to ‘temporarily suspend’ its flight operations from Pakistan till July 1 as 30 Pakistanis arriving in Hong Kong earlier this week were found to be infected by the novel coronavirus is quite disconcerting. Some of the passengers who tested positive for the Covid-19 infection were asymptomatic, and all but three of them had to be admitted to hospital. All the passengers had travelled by Emirates, which was quick to stop its outbound flights from Pakistan till July 3, only two weeks after the resumption of its limited operations in the country. Earlier, Fly Dubai, a budget airline, had also suspended its operations until Aug 1 because of the fast spread of the infection. Nevertheless, Emirates and Etihad are continuing their inbound passenger and cargo operations in addition to special outbound flights taking back UAE nationals. The resumption of their services from this country depends on the implementation of the “required additional measures to satisfy all parties”.
In another case, one of the three infected passengers arriving in New Zealand days after that country had reopened for business after declaring victory over the Covid-19 plague had travelled from Lahore. These reports would have reminded many people of a recommendation issued by the World Health Organisation in 2014 that all Pakistanis travelling outside their country should be administered the polio vaccination. This was not surprising when we consider that several polio cases had erupted in the country and that the virus here was also believed to have spread to countries like Egypt. With the number of coronavirus infections going up and set to cross 200,000 cases, and with the death toll reaching 4,000, many questions have been raised regarding the government’s decision to relax monitoring of both outbound and inbound travellers. Recently, South Korea has also temporarily banned most people from Pakistan and Bangladesh from entering the country after it recorded increases in coronavirus cases from those two states. It has also halted non-scheduled flights between South Korea and the two countries, though diplomats and those travelling for urgent business purposes are exempted from the entry suspension. If effective measures are not implemented immediately to stop infected Pakistanis from boarding outbound flights, chances are that the foreign airlines would extend the suspension of their services from Pakistan; in fact, a number of countries could put stricter restrictions on us to protect themselves.