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Zahid Hussain // DAWN: April 23, 2025
SINDH has risen against the federal government’s decision to build multiple canals on the Indus River for corporate farming.
The street protests have practically turned into a mass uprising. The controversial project has united the province’s political forces and civil society. Highway blockades have disrupted the transportation system. The situation does not seem to be in the control of the provincial administration anymore.
Under pressure, the PPP has toughened its stance on the issue, threatening to withdraw its support to the coalition government at the centre if the canal project is not scrapped. The Sindh Assembly passed a unanimous resolution rejecting the project that many fear will destroy the province’s ecology. The centre’s unilateral decision backed by the security establishment has pitted Sindh against the federal government.
However, there seems to be little realisation of the gravity of the situation in the corridors of power. The federal government has hardly made any effort to find a solution. If the matter is not resolved within the constitutional framework soon, it could threaten the federation’s unity.
What has complicated the situation is the role of the security establishment — the main sponsor of the Green Pakistan Initiative (GPI), of which the canals are a part. It is believed that it’s beyond the civilian government to resolve the issue. The canal project is portrayed as a national security issue by the establishment.
It’s quite intriguing that the project was reportedly approved by the caretaker government. There is also a question of whether the caretaker administration, with its limited mandate, is constitutionally authorised to make such policy decisions that involve the federation. However, it was also the responsibility of the new PML-N government to take the matter to the Council of Common Interests (CCI). But that never happened. The whole project was wrapped in secrecy.
The canal project controversy flared up when the army chief, along with Punjab Chief Minister Maryam Nawaz, inaugurated the GPI in Cholistan in southern Punjab. The planned canals are supposed to irrigate the desert land in the area. The proponents of the project contend that the canals could transform Cholistan’s barren lands into productive farmland that would not only boost agricultural output but also modernise irrigation practices and generate new economic opportunities.
All that may be true, but the real issue is where the surplus water will come from, given that there is already a water shortage in the Indus. Sindh has long been complaining that it has not been receiving the full share of its apportioned quota of water from the Indus. The problem has become much more acute over the years with the shrinking water flow in the river.
In order to resolve inter-provincial water disputes, the Water Accord of 1991 had apportioned specific shares of water to the provinces. Following the accord, the Indus River System Authority was created in 1992. Irsa is a constitutional body responsible for regulating and monitoring the distribution of water resources of the Indus system among the provinces as mandated by the 1991 accord.
Unfortunately, Irsa’s composition has become disputed in recent years, intensifying the inter-provincial conflict over the division of Indus water. The unilateral decision on the Cholistan canal project has made the situation extremely volatile. One wonders why the federal government has not shown willingness to discuss such a politically sensitive issue at the CCI. The statements made by some federal ministers that the canal project is Punjab’s provincial matter and does not need to be discussed at the CCI have made things worse.
The sentiment that the proposed new canals on the Indus are trampling on Sindh’s rights is not without reason. It’s not just an ecological and rights issue but also a politically emotional matter for Sindh, and one which is fanning nationalist sentiments. It has exposed the fault lines within an establishment-dominated political system that has led to the centralisation of power weakening the federal structure. Such unilateral decisions by the federal government and the security establishment have also increased the pressure on the PPP, which is struggling to maintain its credentials as a federal party.
Some federal ministers claim that the project was approved by President Asif Ali Zardari last year. The report is denied by the PPP. The president also categorically rejected the canal project this year in his annual address to the joint session of parliament.
Yet the controversy refuses to die. There has also been criticism of the PPP government for not taking up the issue with the federal government earlier. It was only when the Sindhi nationalist parties took the lead in bringing the public out on the streets that the PPP broke its silence. It’s a moment of reckoning for the party which has ruled the province uninterruptedly for the past 16 years. If the issue is not resolved, the party will have no choice but to pull out its support for the coalition government at the centre.
With anger in Sindh increasing, the PML-N has belatedly called for negotiations with the PPP to find a way out of the crisis. The first meeting between the two parties took place recently, and the PML-N leaders said that the canal project would only be implemented after reaching a consensus.
But given the widening divide it seems increasingly difficult now to reach a consensus on an initiative that should not have been undertaken at all. These are extremely testing times for the federation with the situation in the other provinces, KP and Balochistan, also tense.
While Balochistan is in the throes of an insurgency, the increasing tension between the provincial government in KP and Islamabad has further strained the federation. The increasingly centralised decision-making and the growing shadow of the establishment over all aspects of the power spectrum threatens the unity of the federation.
The writer is an author and journalist.
zhussain100@yahoo.com
X: @hidhussain
Published in Dawn, April 23rd, 2025
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DAWN EDITORIAL: 23 April 2025
THE KP Assembly remains deeply divided over proposed contentious mining legislation. Even many of the ruling PTI legislators have opposed the draft bill approved by the provincial cabinet some weeks ago.
In Balochistan, a more controversial version of the law was passed by the province’s legislature during a brief Ramazan session. In spite of the initial political ‘consensus’, the new law is now being opposed by the parties which had previously lent their support to the provincial government for its smooth passage. At the heart of the opposition are several valid concerns regarding the potential political, social and environmental fallout of the legislation.
But the main worry centres on the concealed attempts to clip the province’s control of its mineral resources by giving an ‘advisory’ and ‘non-binding’ role to the centre, or through invoking ‘national interest’. The legislation carries the unmistakable imprint of the civil-military SIFC, which is actively marketing Pakistan’s mineral potential to foreign investors.
While those opposed to the bill in KP have successfully blocked its enactment, the opposition in Balochistan woke up too late to the fact that the bill they had helped pass, without properly reading it, would deprive the province of significant decision-making powers, transferring these to the centre. Little wonder that criticism of the efforts to curtail provincial autonomy has again been sparked; ironically, both the PML-N and PPP, which had jointly led the passage of the landmark 18th Amendment 15 years ago, seem to have forgotten their commitment to devolution in this case.
The push for the new provincial mining legislation comes from the conviction that the country’s hitherto unexplored mineral wealth, estimated by the government to be worth $6tr, could help fix the national economy, freeing it from its perpetual dependency on IMF bailouts. It is not unusual for our leadership to clutch at straws whenever they find themselves in a bind and unable to reform the failing economy.
Observers point out that with certain quarters virtually calling the shots in the economic sphere, since the formation of the SIFC, the shift in approach has become starker. Initially, the people were promised billions of dollars in investment from the Gulf countries. Later, the focus shifted to corporate farming as a panacea for our economic woes.
More recent is the talk of buried gold in our treasure island, which is being touted as a curefor the ailing economy. No doubt this hidden wealth will go a long way in bringing prosperity, but it will not be available to us for a long time.
With the federation already under strain thanks to controversial federal policies and projects, the centre should stop encroaching on provincial jurisdictions in its misplaced eagerness to control minerals.
Published in Dawn, April 23rd, 2025
Riaz Riazuddin Published April 23, 2025
THE current US-China tariff tit-for-tat is a high-stakes game, not a war.
While the phrase ‘trade war’ has long been used to describe the process of imposition of import tariffs on a country that, in turn, levies counter-tariffs, using the ‘war’ metaphor trivialises the devastation of real conflicts, which involve the loss of life, deep human trauma and the destruction of properties.
Just think about the wars raging in Ukraine, Gaza and Sudan, and the countless other previous wars that saw millions dying around the world. The ‘war’ metaphor as used by commentators, analysts, pundits, and economists over-dramatises the economic and political impact of tariffs. International trade is a peace-time activity; it should be analysed as such, without focusing on this metaphor.
Donald Trump initiated this trade game in a way that shook the entire world. But what are the objectives of levying such large-scale import duties across the board?
He simply wants to provide some protection to American manufacturers, initially at the expense of consumers who will bear the cost of tariffs through higher-priced goods. Another Trump objective is to provide a tax cut to US citizens once the process is streamlined, and the flow of tariff revenues materialises meaningfully. In Trump’s view, his tax cut, to be financed by tariff revenues, will compensate the consumers for the high cost of inflation.
Achieving the above aims needs a continuous flow of imported goods to the US, which in turn requires import duties to be set at moderate levels. If the tariff rates are set at exceedingly high levels, imports might stop completely. This can happen if the tariff is set at what economists call a ‘prohibitive level of tariff’, where imports from the targeted country stop completely.
The retaliating country will also set its tariff at an extremely high rate, thereby ending trade between itself and the other country. Is the tariff rate of 145 per cent imposed by the US on China close to the prohibitive level? While there’s no definite answer, the tariff rate seems close to this level because the increase is exceptionally large compared to what it was before Trump unilaterally began this trade game, forcing all countries to take counter steps, negotiate, or retaliate. This is how he designed the game.
It was not difficult to see how different countries would respond. The countries that are small compared to the US in economic and political power, no matter how developed they are (like Singapore), were expected not to retaliate and to start negotiating with the US to get some relief in rates above the baseline of 10pc, which probably is not open to negotiations. The countries that are comparable to the US in economic and political power were expected to retaliate.
The world has seen clearly that China is the only country comparable to the US that retaliated ferociously with counter tariffs. China knows the stakes in this trade game well. It knows that the US will not be able to achieve its stated objectives of imposing tariffs at these exceedingly high rates — close to the prohibitive level — of 145pc. It knows that the US will back down in due course because Trump will eventually focus on achieving his aims.
While no European country on its own can stand up to the US in this game, the EU collectively has considerable power and could have retaliated like China. But its suave politicians, who usually say something and mean something else (unlike Xi Jinping and Trump), came up with an expected response, expressing a symbolic retaliation without antagonising big brother America while trumpeting that the US is becoming increasingly unfair to its allies!
But what has Trump gained so far from his trade game? He has brilliantly achieved the wholehearted acceptance of his baseline tariff rate of 10pc by all countries! Imagine the reaction of countries had Trump imposed the tariffs meekly — at the same level (10pc) or involved the World Trade Organisation.
The WTO bureaucracy would have allowed the process of tariff negotiation to linger for years, and each country would have resisted the tariff rate! Now Trump can easily and gradually start providing relief to various countries, bringing the total tariff rate downward, closer to his baseline rate, which would be more conducive for collecting meaningful tariff revenues.
Does this analysis seem rational compared to the one coming from top-notch economists who have a different opinion, closer to the influential Economist’s view that “mindless tariffs will cause economic havoc”?
Let us suppose that Trump is mad or his tariff policy completely bonkers, as most analysts want us to believe. In that case, China-US trade would come to a halt. The level of tariffs on other countries would be set towards the higher end of those indicated in the next level (after the 10pc baseline level) for each country in Trump’s tariff order. If that is the case, the US will hardly be able to collect a reasonable amount of revenue because of drastically reduced trade volumes under this scenario.
Still markets and pundits are focused on this scenario, because they see Trump as a madman intent on destroying world trade.
The disdain that markets and top economists have for Trump is leading them to ignore the costs for Trump for not cooperating in this trade game, and consequently, the prediction that American consumers will be severely hurt, in terms of higher inflation, and of lower levels of welfare for all countries. Their overemphasis on Trump’s personality, together with the ‘war’ metaphor, reduces the likelihood, in their eyes, of Trump being able to exercise considerable flexibility to set his tariffs eventually at moderate levels.
Trump is neither mad nor stupid. On the contrary, he is one of the two shrewdest presidents in the world today, the other being Xi Jinping of China, who wisely stopped further retaliatory tariffs from his side, even in the event of future additional tariffs. Let us wait and see how this game unfolds, perhaps perpetuating the same old economic order.
The writer is former deputy governor of the State Bank of Pakistan.
rriazuddin@gmail.com
Published in Dawn, April 23rd, 2025
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THE Hindu Kush-Himalayan region, known as Asia’s water tower, is in trouble. The towering ranges have registered a 23-year low in snow persistence — the amount of time snow stays on the ground after it falls. This is particularly alarming because snow plays a vital role in maintaining river flows during dry periods. For Pakistan, which lies downstream of this vast frozen water source, the implications are especially dire, given that the country is already in a state of significant water stress. According to the International Centre for Integrated Mountain Development, snowmelt contributes nearly 25pc of the annual water flow to 12 major river basins. The Indus Basin, which Pakistan relies on most heavily, is particularly dependent on it. Pakistan draws over 60pc of its water needs from the Indus for irrigation, hydropower and daily use. The current 16pc decline in snow persistence in the Indus Basin means that early summer river flows could be drastically reduced, worsening water scarcity in a country already struggling with drought conditions and erratic rainfall. Just last month, the Pakistan Met Department issued a drought alert for Sindh, Balochistan and Punjab.
The reduction in snow cover, now recorded for a third consecutive year, is part of a broader climate trend affecting not just Pakistan but the entire region. Yet, for Pakistan, the stakes are existential. With agriculture forming the backbone of the economy, any disruption in water supply could lead to food insecurity, reduced hydropower output and increased dependence on rapidly depleting groundwater reserves. It is painfully clear that swift action is required on multiple fronts, and a paradigm shift is needed in how the country views water. First, Pakistan must treat water as a scarce resource and boost investment in adaptive water management strategies — including better storage, efficient irrigation systems for agriculture and contingency planning for droughts. Second, it must work with neighbouring countries within the HKH region to strengthen early warning systems and ensure data sharing on snow and water flows. And finally, a shift in policy is needed to align national water strategies with the realities of a changing climate. If current trends continue, the region — which numbers nearly 2bn people — may be faced with an irreversible water crisis. The snow may be vanishing, but the time for decisive action must not.
Published in Dawn, April 23rd, 2025
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