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From Colombo to Islamabad

   Published June 3, 2022 
The writer completed his doctorate in economics on a Fulbright scholarship.

SHOCKING images of torched trees, smouldering greenbelts and burnt-out vehicles are not something that people associate with Islamabad. But, in the history of a nation, capital cities have often become the battleground for disparate political forces.

Baghdad, Delhi and Istanbul have seen a lot of violence through the centuries. One hundred years ago, Benito Mussolini marched on Rome with 30,000 followers. Of late, Colombo, the capital of Sri Lanka, has become the staging ground for daily protests by the public and marches against a complete and utter economic meltdown.

Given this tumultuous history of capital cities, will Islamabad too suffer the same fate? The answer lies in whether the current government will be given the time, support and space to implement some important economic decisions that are urgently required to prevent the economy from spiralling out of control.

Since the start of hostilities between Russia and Ukraine, developing countries such as Pakistan have been facing severe external account pressures mainly on account of the steep increase in the price of oil in the international market. State Bank data reveals that petroleum group imports cost 91pc more in the first 10 months of this fiscal year. This steep escalation in the import bill has resulted in Pakistan losing 50pc of its foreign exchange reserves in the last nine months, leaving import coverage of only about 1.5 months at best.

A steep rise in inflation will create a potent mix that could easily lead to social unrest in the country.

Oil prices are not going to come down anytime soon. As the European Union moves to ban Russian oil imports, some analysts believe that Russia may try to punish Europe by curtailing production, thus raising international oil prices in order to inflict maximum damage on European economies. Some market analysts are warning investors to brace themselves for an economic ‘hurricane’ that may push oil prices to as high as $175 per barrel.

Read more: Inflation reaches 13.76pc in May, highest in over two years

With no end to the oil price escalation in sight, and with rapidly depleting reserves, the government was forced to go to the IMF. However, the IMF had already indicated that in order for talks to be fruitful, this government would have to reduce the fiscal deficit by passing on the rise in oil prices to the people. This put the government between a rock and a hard place.

It is believed by many that political stability and economic growth are deeply interconnected as political uncertainty and social unrest lead to lower levels of investment and growth. Recent economic crises in countries such as Lebanon and Sri Lanka can be traced to internal political instability. Specifically, as economic crises start taking shape, governments at times exacerbate crises by trying to avoid or control political instability or by simply making poor economic decisions under political pressure.

Many economists recently criticised the government for not passing on the rise in international oil prices to consumers, with many commentators blaming it on the government’s indecisiveness. But there is evidence to suggest that the government had a fair idea about the worsening economic situation since the contours of the crisis were visible as early as February this year. The government, for instance, was very quick in tapping Miftah Ismail for the finance portfolio, even when the rest of the cabinet had not been announced. Still, the government dithered on passing on the prices until the political storm had blown over in Islamabad.

Perhaps, the government was correct in waiting for the political situation to settle down as passing on the price increase would surely lead to back-breaking inflation. It is very likely that inflation will touch 18pc to 20pc this calendar year, given how international oil prices are going up. In a politically volatile environment, passing on a massive price increase to the people would be akin to fanning the flames of social unrest.

Read: Economic remedy proves to be the most bitter pill

To be sure, the government was evaluating an increase in fuel prices after the political volatility reached its climax with the in-house change in the National Assembly. Political volatility has not since abated, especially as the Punjab chief minister remained unsuccessful in announcing his cabinet until very recently.

Though there are indications of near-successful negotiations between the IMF and the government, Pakistan’s economy is not out of the woods. On the external front, the economy is facing extremely strong headwinds in the shape of continued pressure on foreign exchange reserves coming from elevated oil prices, as well as from rising policy rates in developed economies.

Additionally, Pakistan’s export destinations are experiencing stagflation, ending all hope of exports bailing us out. On the domestic front, a steep rise in inflation will create a potent mix that could easily lead to social unrest, thereby making it difficult for the government to take optimal economic decisions. In a sense, a severe economic crisis coupled with political instability could very well turn into a vicious cycle, whereby Pakistan starts hurtling towards a hard default like Sri Lanka.

Nevertheless, a hard default can be avoided. But in order to do that, unpopular economic decisions will need to be taken such as passing on oil price increases, having more import controls and possibly even fuel rationing. Given this very challenging economic scenario, political stability is the need of the hour. Forcing the government to call elections in the midst of a devastating economic crisis will only serve to increase political instability as different parties may decide to face off in the streets of Islamabad.

Moreover, the IMF and other international lenders may be reluctant to talk and provide assistance to a caretaker government, given there is no guarantee that the caretakers’ promises would be honoured by the next government. The fate of Islamabad and that of Pakistan’s economy is going be determined by political continuity and stability.

The writer completed his doctorate in economics on a Fulbright scholarship.


Published in Dawn, June 3rd, 2022


Security policy

   Published June 3, 2022 
The writer is author of Pakistan: In Between Extremism and Peace.

IN developing countries, national security was the exclusive domain of the state, with state institutions enjoying monopoly over the subject under the cover of secrecy policies. As the 21st century progressed, we got stronger democracies, freedom of expression, better access to information and improved transparency. Globalisation revolutionised the pace of information dissemination, impacting the dynamics of national security positively and negatively. The post-9/11 era not only multiplied security challenges, it also made civil society an active stakeholder in the process.

After the National Internal Security Policy of 2014, the National Action Plan was the second consensually drafted policy document approved by Pakistan’s parliament. The drafting of NAP, Nisp I, Nisp II, and, recently, the National Security Policy (NSP) 2022-2026 speaks of a growing realisation in policy circles of the need to transition from a whole-of-state to a whole-of-government approach to find answers to Pakistan’s many security challenges.

The NSP’s formulation began in 2014, and the end product is said to be the result of consultation with 120 experts. The document represents a policy transition from a security-centric approach to an economy- and human security-centric approach. It has eight sections, including one focusing exclusively on internal security.

Ideally, a security policy should reflect a government’s policy, the input of state institutions and public opinion. But its desired goal can’t be achieved without a communication strategy. In this age of openness, defining the exact boundaries of national security is tough. Participation in the national security dialogue, therefore, makes it incumbent on the media to adopt a balanced approach between freedom and responsibility.

The ideals of NSP can’t be realised without good governance.

The ideals of NSP cannot be realised without good governance. Though the NSP quotes the term ‘governance’ 13 times, its objectives cannot be accomplished without institutional and administrative reforms and capacity-building exercises. Administrative reforms in Balochistan and Punjab and the creation of new provinces will improve public service delivery, governance, peace and development pace. Fata’s merger with KP is a step in the right direction; but the merger’s dividends can’t be attained solely by applying a security-centric approach; it will also require a reforms-based approach to overhauling social development and the criminal justice system.

The NSP rightly identifies the need to check growing violent sub-nationalist tendencies and incorporates a four-pronged policy of engagement, including separating reconcilables from irreconcilables; cutting off recruitment; constricting financial sources; and pursuing targeted socioeconomic policies to address governance concerns. Since 2001, Pakistan has notified 78 organisations as proscribed. Of the total, 19 are violent sub-nationalist and 20 sectarian organisations. This indicates that addressing societal fault lines needs the adoption of a combination of hard and soft approaches.

With the 18th Amendment in the backdrop, exactly how ministries and provincial departments convert ideas into actionable plans is a challenge. The synchronisation of internal security priorities requires active inter-provincial coordination and allocation of greater resources by provinces for security purposes. Owing to weak institutional capacity and response, law-enforcement agencies usually try to meet public expectations by employing a statistical approach, due to which public satisfaction generally remains unfulfilled.

The police are vital in this context, but the Nisp mentions them only once. Without police reform and a depoliticised police, internal security cannot be guaranteed. The underperforming cybersecurity sector, polarisation, regio­nal instability, weak governance, poor public service delivery, poor monitoring apparatus, ethnic and sectarian fault lines and weak coordination among LEAs are irritants that negatively impact policy implementation.

The NSP emphasises the need for strengthening counterterrorism agencies. In Pakistan, CT is a concurrent subject, wherein provinces operate their respective counterterrorism departments and are engaged in related operations and investigations. The Anti-Terrorism Act, however, is a federal law and a number of federal institutions are entrusted with countering terrorism and terrorism financing as well as coordination and intelligence-sharing functions.

Despite that, an operational federal CT apparatus remains a missing link. The jurisdiction of a federal CTD should be to take up investigation of CT cases with nationwide or transnational implications. With that view, the establishment of a federal CTD is inevitable. Following the principles of cooperative federalism will help realise NSP goals but it will need close collaboration among federal, provincial and local governments.

The writer is author of Pakistan: In Between Extremism and Peace.

Twitter: @alibabakhel

Published in Dawn, June 3rd, 2022

US says some Indian officials ignoring or supporting attacks on minorities

   Published June 3, 2022 -    Updated a day ago

Some officials in India are ignoring or even supporting rising attacks on people and places of worship in the country, a United States official said late on Thursday after the release of a report on religious freedom globally in 2021.

The report said attacks on members of religious minority communities, including killings, assaults, and intimidation, had occurred throughout last year in India. These included cow vigilantism — assaults on non-Hindus for allegedly slaughtering cows or trading in beef.

Most Hindus, who account for about 80 per cent of India's 1.3 billion people, consider cows sacred.

Many states ruled by Prime Minister Narendra Modi's Hindu nationalist party have enacted laws or toughened old ones against slaughtering cows.

US Secretary of State Antony Blinken said the report showed religious freedom and the rights of religious minorities were under threat around the world.

“For example, in India, the world's largest democracy and home to a great diversity of faiths, we've seen rising attacks on people and places of worship,” Blinken said.

Rashad Hussain, who leads the US State Department's efforts to monitor religious freedom around the world, said some Indian officials were “ignoring or even supporting rising attacks on people and places of worship”.

India's foreign ministry said the country values religious freedom and human rights, and that it had noted the “ill-informed comments by senior US officials”.

“It is unfortunate that vote bank politics is being practiced in international relations,” ministry spokesperson Arindam Bagchi said in a statement.

He also said Indian officials have regularly highlighted “racially and ethnically motivated attacks, hate crimes and gun violence” in the United States.

Disputes between religious communities in India over places of worship have flared ever since the country won independence from British rule in 1947, but they have become more common in recent years. Muslims make up around 13pc of India's population.


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