Dawn Editorials 17th May 2023

LSM decline

THE hefty slump of 25pc in large-scale manufacturing in March — the biggest monthly drop since the Covid-19 shutdown — from a year ago, confirms that the decline in the sector, triggered by curbs on the import of raw material, steep currency depreciation, rising financing cost and, last but not least, contraction in domestic and international demand, is accelerating. New data from the Pakistan Bureau of Statistics shows that the LSM industry has contracted 8.1pc in the nine-month period from July to March — from a robust growth of 11.7pc in the previous fiscal year — as difficult economic conditions, responsible for factory shutdowns and production cuts, continue to bite producers more and more with each passing month. The data is illustrative of a very painful period for industry as workers lose their jobs in large numbers. Output contraction in the manufacturing industry has been widespread and reflects a broad-based deceleration in economic activities as production in 19 sectors out of 20 shrank in the nine-month period.The textile industry, the country’s largest employer after agriculture and the biggest earner of export dollars, has slumped by nearly 31pc from a year ago. Pharmaceutical and automobile industries have declined by over 28pc and 25pc respectively. The same is the case with the steel and chemical industries.

The decline in the manufacturing industry is not surprising; it was expected once the government started to discourage domestic demand with a view to protecting the fragile external sector as the widening trade deficit threatened to wipe out Pakistan’s foreign exchange reserves. Initially, restrictions were placed for a limited period, but soon the government had to widen the scope of administrative controls on dollar outflows as reserves kept plunging because of debt repayments and drying inflows. With the industry contracting consistently, multilateral lenders have revised down their GDP growth forecasts for the present fiscal year to just 0.4pc to 0.6pc, projecting unemployment to increase to 7pc as a result of massive industrial lay-offs. Many expect the economy to post negative growth; their projections are not far-fetched given the present economic environment and our weak balance-of-payments position. The contraction in LSM is just a symptom of a disease which cannot be treated without the resumption of funding from the IMF and other multilateral lenders. The manufacturing industry will not revive unless the balance-of-payments issue is tackled.

Published in Dawn, May 17th, 2023


Dangerous designs

THE army is clearly furious. The events of last week have challenged its primacy in the calculus of power, and it is seeking to claw its way back. It should not surprise anyone that it is looking to respond with ‘overwhelming force’.

Past attacks on the institution on a much smaller scale have elicited similar responses; this time, the scale of the attack was much larger. The images of the gates to GHQ being forced open, monuments to heroes being defaced, citizens pelting army vehicles with stones, and the burning down of a corps commander’s residence will not be easy to scrub away from public memory. Hence, a decision appears to have been made to replace them with a memory of abiding dread.

The press release issued after Monday’s corps commanders meeting reflects this strategy. However, the army must reconsider the path it intends to take.

The ISPR has said the army will be seeking trials of suspects under the Army Act and the Official Secrets Act. Both laws have long been criticised by rights activists and ex-servicemen for being repugnant to fundamental legal rights, including the right to a fair and transparent trial, the right to proper legal representation, the right to appeal sentences and, most importantly, the right to be presumed innocent until proven guilty.

Thousands of citizens across the country have been picked up in connection with the violence that broke out last week; many continue to be held without being produced before a magistrate or being charged with an offence.

The miscreants who committed arson, looting or destruction of property deserve punishment, but their punishment should equal the severity of their crimes. Trying them for rioting under army laws is a gross overreaction. The government must not condemn any citizen to a military trial out of any vindictiveness over their political leanings.

Prosecution of the violence and mayhem seen on May 9 and 10 should be left to the civilians. The army should limit its role to sharing evidence with investigators, helping establish the extent of damage caused with the help of CCTV footage and eyewitnesses, and providing any other material and aid whenever needed.

The PTI chairman, meanwhile, insists he has evidence to exculpate the party from the charges it faces. He should be allowed to present his case, but the party must also cooperate with the investigation wherever needed.

Finally, the military leadership must remember that the laws governing the armed forces were meant to maintain discipline and perpetuate control, not punish citizens who may have been expressing pent-up anger and frustration.

The ISPR statement indicates that the army still wants “the full support of the people of Pakistan”. It will find it difficult to achieve this goal if the people are treated as enemies.

Published in Dawn, May 17th, 2023

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