Thursday, June 3, 2010

Rationalizing Americans' Will to Attack America: Economistan

America is all abuzz these days with the Times Square bombing plot by the US national Faisal Shahzad with Pakistan increasingly coming under fire for the reason that Faisal went to Pakistan to get explosives training. What the US has failed to recognize is that not all terror incidents can be traced to Pakistan. What about the case of the American born US Army Major Nidal Malik Hasan who killed 13 US Army personnel and ended up wounding 30 people before he was finally shot down? The only major similarity of interest between Faisal and Nidal was that both of these US nationals were living a privileged life in the US or what the US people are programmed to call as the so called "American Dream". Now we have to find out exactly how this "American Dream" turned out to be an " American Nightmare". Is it because Muslims are unfairly victimized in the US or discriminated against or is it because Muslims find themselves under severe scrutiny along with harassment through a constant barrage of anti-Muslim comments or sentiments from the general public? Is the US media playing a major role in alienating the American Muslim population or the fault lies with the right wing extremist Christians omnipresent in the continental United States? Do these right wing Christian extremists consider this war on terror as another crusade against Islam or a war which is against all acts of terror including those by their fellow Christians like Timothy McVeigh and those by the IRA and the Basque separatist movement in Spain where all are equally....

For more on this article, please click on the following link: Rationalizing Americans' Will to Attack America: Economistan

Thursday, April 15, 2010

War or peace on the Indus?: Business Recorder

ARTICLE (April 15 2010): Anyone foolish enough to write on war or peace in the Indus needs to first banish a set of immediate suspicions. I am neither Indian nor Pakistani. I am a South African who has worked on water issues in the subcontinent for 35 years and who has lived in Bangladesh (in the 1970s) and Delhi (in the 2000s).

In 2006 I published, with fine Indian colleagues, an Oxford University Press book titled India's Water Economy: Facing a Turbulent Future and, with fine Pakistani colleagues, one titled Pakistan's Water Economy: Running Dry. I was the Senior Water Advisor for the World Bank who dealt with the appointment of the Neutral Expert on the Baglihar case.

My last assignment at the World Bank (relevant, as described later) was as Country Director for Brazil. I am now a mere university professor, and speak in the name of no one but myself. I have deep affection for the people of both India and Pakistan, and am dismayed by what I see as a looming train wreck on the Indus, with disastrous consequences for both countries.

I will outline why there is no objective conflict of interests between the countries over the waters of the Indus Basin, make some observations of the need for a change in public discourse, and suggest how the drivers of the train can put on the brakes before it is too late.

Is there an inherent conflict between India and Pakistan? The simple answer is no. The Indus Waters Treaty allocates the water of the three western rivers to Pakistan, but allows India to tap the considerable hydropower potential of the Chenab and Jhelum before the rivers enter Pakistan.

The qualification is that this use of hydropower is not to affect either the quantity of water reaching Pakistan or to interfere with the natural timing of those flows. Since hydropower does not consume water, the only issue is timing. And timing is a very big issue, because agriculture in the Pakistani plains depends not only on how much water comes, but that it comes in critical periods during the planting season. The reality is that India could tap virtually all of the available power without negatively affecting the timing of flows to which Pakistan is entitled.

Is the Indus Treaty a stable basis for co-operation? If Pakistan and India had normal, trustful relations, there would be a mutually-verified monitoring process which would assure that there is no change in the flows going into Pakistan. (In an even more ideal world, India could increase low-flows during the critical planting season, with significant benefit to Pakistani farmers and with very small impacts on power generation in India).

Because the relationship was not normal when the treaty was negotiated, Pakistan would agree only if limitations on India's capacity to manipulate the timing of flows was hardwired into the treaty. This was done by limiting the amount of "live storage" (the storage that matters for changing the timing of flows) in each and every hydropower dam that India would construct on the two rivers.

While this made sense given knowledge in 1960, over time it became clear that this restriction gave rise to a major problem. The physical restrictions meant that gates for flushing silt out of the dams could not be built, thus ensuring that any dam in India would rapidly fill with the silt pouring off the young Himalayas.

This was a critical issue at stake in the Baglihar case. Pakistan (reasonably) said that the gates being installed were in violation of the specifications of the treaty. India (equally reasonably) argued that it would be wrong to build a dam knowing it would soon fill with silt.

The finding of the Neutral Expert was essentially a reinterpretation of the Treaty, saying that the physical limitations no longer made sense. While the finding was reasonable in the case of Baglihar, it left Pakistan without the mechanism - limited live storage - which was its only (albeit weak) protection against upstream manipulation of flows in India.

This vulnerability was driven home when India chose to fill Baglihar exactly at the time when it would impose maximum harm on farmers in downstream Pakistan. If Baglihar was the only dam being built by India on the Chenab and Jhelum, this would be a limited problem. But following Baglihar is a veritable caravan of Indian projects - Kishanganga, Sawalkot, Pakuldul, Bursar, Dal Huste, Gyspa... The cumulative live storage will be large, giving India an unquestioned capacity to have major impact on the timing of flows into Pakistan. (Using Baglihar as a reference, simple back-of-the-envelope calculations, suggest that once it has constructed all of the planned hydropower plants on the Chenab, India will have an ability to effect major damage on Pakistan.

First, there is the one-time effect of filling the new dams. If done during the wet season this would have little effect on Pakistan. But if done during the critical low-flow period, there would be a large one-time effect (as was the case when India filled Baglihar).

Second, there is the permanent threat which would be a consequence of substantial cumulative live storage which could store about one month's worth of low-season flow on the Chenab. If, God forbid, India so chose, it could use this cumulative live storage to impose major reductions on water availability in Pakistan during the critical planting season.

For more on this article, please click on the following link: War or peace on the Indus?: Business Recorder

Thursday, April 1, 2010

KSE 100-share index recomposed: Dawn

KARACHI: The Karachi Stock Exchange (Guarantee) Limited has recomposed KSE 100-Index, effective from April 1, 2010.

According to KSE 11 companies, namely Security Papers Ltd, Pakistan Cables, TRG Pakistan, Murree Brewery Company, PEL, Grays of Cambridge, Shifa International, PACE Pakistan, NetSol Technologies, Pakistan Telephone Cables and Clariant Pakistan have been included in the Index.

For more on this article, please click on the following link: KSE 100-share index recomposed: Dawn

Renexus of Malaysia ready to invest US$ 500m in Pakistan: APP

ISLAMABAD, April 1 (APP): Renexus, a renowned Malaysian company is willing to invest around US$500 million in Pakistan for building water treatment plants on Built, Own and Operate (BOO) basis.This was stated by John Klerr, Executive Chairman of Renexus during his meeting with Acting High Commissioner for Pakistan in Malaysia, Dr. Imtiaz Ahmad Kazi in Kuala Lumpur today.

Renexus deals in water treatment plants, construction infrastructure development and information and communication technology, says a press release received here today from Malaysia.
While giving detaild of the investment proposal, Klerr said that the Renexus was ready to build water treatment plants at various locations in Pakistan, specially in the province of Punjab aimed at providing potable water for public as well for industrial use.
According to the proposal, he said that Renexus will arrange all the required funding to built, own and operate the water plants and sell the water in bulk to the government-related agencies, who in their turn, would effect the distribution to the end user and collect utility charges.
The Acting High Commissioner suggested Klerr to increase the scape of their investment to other areas in the country like Province of Balochistan, Sindh and NWFP and Industrial city of Karachi which are also facing shortage of safe and clean water.

For more on this article, please click on the following link: Renexus of Malaysia ready to invest US$ 500m in Pakistan: APP

Japan gives $260m loan for power sector: Dawn

ISLAMABAD: Japan has extended a soft loan of $260 million (23.3 billion yen) to Pakistan for the National Transmission Lines and Grid Stations Strengthening Project, which will cost Rs29.339 billion.

This is the first Japanese loan under the Official Development Assistance (ODA) based on the Pakistan Donors’ Conference hosted by Japanese government in April 2009 where a maximum of $1 billion in aid was pledged over a period of next two years.

Notes to this effect were signed and exchanged between Ambassador of Japan Chihiro Atsumi and Secretary Economic Affairs Division Sibtain Fazal Halim here on Wednesday.

The exchange of notes was followed by the signing of the loan agreement by EAD Additional Secretary Hassan Nawaz Tarar and the Chief Representative of Japan International Cooperation Agency (JICA) in Pakistan, Tomoharu Otake.

For more on this article, please click on the following link: Japan gives $260m loan for power sector: Dawn

Tuesday, March 30, 2010

Taking care of circular debt once and for all: Govt to float Rs 100 billion Sukuk bonds in May: Daily Times

By Sajid Chaudhry

ISLAMABAD: The Ministry of Finance is planning to float Rs 100 billion Islamic Sukuk Bond in May 2010 to meet its growing financial needs as well as to retire the mounted circular debts before June 30, 2010, official sources informed on Tuesday.

Pakistan Investment Bonds (PIBs) and Sukuk Bonds are in permanent debt and this time the government wants to raise money from Islamic banking system to finance power sector circular debts once and for all, the sources added.

In the initial proposal the Ministry of Finance suggested floating Islamic paper with one-year maturity period. However, now they are considering other options because the central bank is already floating treasury bills with one-year maturity. The non-interest bearing bond launch on the pattern of PIBs and Islamic banks acts as a primary dealer. The cut-off yield of upcoming Sukuk Bond will be equal or slightly above the average 12.7 percent yield of PIBs.

The investment made in the Islamic Bonds (Sukuk) would enable the investors to get a good return on their investment upon completion of the term to be fixed under the scheme.

The government of Pakistan is a sovereign guarantor of upcoming Islamic paper. Finance Ministry official informed a local newspaper that “it’s a reserve backing paper and Islamic banks can keep this paper to fulfil State Bank statutory liquidity requirement.” Islamic banking system has very limited options of interest-free investment. The official sources informed that the circular debt position as of February 2010 was that Pakistan State Oil (PSO) receivables stood at Rs 109 billion and its total liabilities were estimated at Rs 112.52 billion.

For more on this article, please click on the following link: Taking care of circular debt once and for all: Govt to float Rs 100 billion Sukuk bonds in May: Daily Times

Why Insurgency in Balochistan Cannot Succeed: FPJ

by Shahid R. Siddiqi

Balochistan, Pakistan’s south western province, has evoked much interest among players of regional politics. The US, India, former Soviet Union and even Afghanistan have toyed with the idea of Balochistan becoming an independent state in their geo-strategic interests.

Located very close to the oil lanes of the Persian Gulf and having a common border with Iran and Afghanistan, Balochistan is strategically very important. Commanding almost the entire coast of the country – 470 miles of the Arabian Sea, and boasting of a deep sea port recently completed with Chinese assistance at Gawadar, Balochistan comprises 43% of Pakistan’s total area but is home to just over 5% of the population, 50% of whom are ethnic Pashtuns.

A tribal society, Afghanistan has always been ruled autocratically by sardars (tribal chiefs), some 250 of them, who have kept their people backward, illiterate and deprived. Mainly three sardars of Bugti, Marri and Mengal tribes have been in revolt against the federation from time to time in their bid to maintain the status quo by blocking the federal government’s efforts of development or democratization. Although they held positions of power as chief ministers of their province from time to time, they neither did anything significant for their people nor did they remain part of the political process. To perpetuate their despotic rule, they decided to part ways with the federation. Other moderate sardars either chose to side with the federation or stayed neutral.

Reluctance of successive federal governments to promote genuine federalism for fear of compromising national unity in the belief that ‘a strong center would guarantee a strong federation’ proved a fallacy. The dissidents used this to inflame nationalist sentiments and demands for greater provincial autonomy and control over the province’s natural resources turned into a demand for independence.

For more on this article, please click on the following link: Why Insurgency in Balochistan Cannot Succeed: FPJ

Foreign portfolio investment : KSE hits $100m mark in March: Daily Times

By Tanveer Ahmed

KARACHI: The foreign portfolio investment (FPI) hit $100 million mark in March, which is the highest monthly inflow in the current financial year.

Despite political and security concerns, the Karachi Stock Exchange attracted net buying of $100 million so far during the current month. Currently the foreigners have flooded the local stock market in recent weeks.

“The abnormal flows, is the result of renewed interest of fund managers in frontier and emerging markets,” Topline Securities analyst Farhan Mahmood said and added that the increasing role of foreign trade can be judged from the fact that their share in the total volumes in March 2010 was 15 percent as compared to the average 9 percent in 2009.

For more on this article, please click on the following link: Foreign portfolio investment : KSE hits $100m mark in March: Daily Times

IMF holds back cash to Pakistan: Asia Times

By Syed Fazl-e-Haider

KARACHI - The International Monetary Fund (IMF) has deferred for an indefinite period disbursement of the fifth, US$1.2 billion, installment of funds to be paid to Pakistan under their $11.3 billion standby agreement. This came after the government failed to meet the condition of tabling draft value-added tax (VAT) legislation in the four provincial assemblies.

Critics say the proposed VAT will increase inflation, erode consumers' purchasing power and dampen demand. The government has left the issue with legislators who will adopt, reject or amend the VAT bill. Local business communities have strongly opposed the imposition of VAT, saying it will harm every sector of the economy. However, the rupee "will come under pressure if the IMF money is delayed for more than a month", The News quoted Sayem Ali, an economist at Standard Chartered Bank, as saying. That would drive up the cost of imports.

The Washington-based IMF has postponed its scheduled March 31 executive board meeting, which was to review Pakistan's economy and approve payment of the fifth tranche.

The legislative bottleneck is the presentation of a draft law on VAT to the Punjab assembly, according to Dawn. The government has already submitted the draft law to the National Assembly and to the provincial assemblies of Sindh, North-West Frontier Province and Balochistan.

For more on this article, please click on the following link: IMF holds back cash to Pakistan: Asia Times

SBP Quarterly Report on State of Pakistan’s Economy: The News

By Saad Hasan

KARACHI: The State Bank of Pakistan (SBP) has raised the fiscal deficit forecast for the current financial year 2009/10 (July-June) to between 5.0 and 5.5 per cent of the gross domestic product (GDP) from the targeted 4.9 per cent in the wake of high defence spending and low revenue collection.

The SBP in its Second Quarterly Report on the State of Pakistan Economy maintained its GDP forecast for FY10 at between 2.5 and 3.5 per cent, but lowered its projection for the current account deficit to 3.2 to 3.8 per cent from the previous estimates of 3.7 to 4.7 per cent.

“The fiscal outlook appears especially challenging,” the SBP said in its Second Quarterly Report (October-December) for FY10 on the State of Pakistan’s Economy. “Existing rigidities in current expenditures have been exacerbated in FY10 by the strong build-up in domestic and external debt, and rising military spending on anti-terrorist operations.”

The growing energy sector circular debt and the government’s controversial policy of paying higher-than-market price to farmers for certain commodities also contributed to widening of the fiscal deficit, the bank said.

Analysts say that keeping the fiscal deficit target at 4.9 per cent remains one of the key conditions of the International Monetary Fund (IMF) under its $11.3 billion Standby Agreement with Pakistan.

Hamad Aslam, head of research at BMA Capital Management, however, said that the widening of fiscal deficit would have little impact on the Standby Agreement with the IMF. “In practice these numbers have been shared with IMF officials so it won’t0 be much of a problem for the governmentĂ– But, the rising current expenditure on the large government machinery should be bothering the IMF.”

For more on this article, please click on the following link: SBP Quarterly Report on State of Pakistan’s Economy: The News

Pakistan Railways losing Rs 3m every hour: BilourStaff Report: Daily Times

LAHORE: The Pakistan Railways is incurring losses of almost Rs 3 million per hour, Railways Minister Ghulam Ahmad Bilour said on Monday.

Talking to journalists at the Railways Headquarters, he said that eight or nine freight rails were currently operating from Karachi. “It is because the department lacks locomotives...otherwise nearly 30 freight rails would be operating,” he said. He said that everyone compares the Pakistan Railways with the Indian railways system, but few mention the comparative budgetary spending on the railways in both countries. He said that a requisition of Rs 28 billion was sent to the government, but it released only Rs 14 billion, and that too in two instalments. “On the other hand, the budget of the Indian Railways is Rs 282 billion,” he said.

For more on this article, please click on the following link: Pakistan Railways losing Rs 3m every hour: BilourStaff Report: Daily Times

UN delays Benazir murder report at Zardari’s request: The News

UNITED NATIONS: Secretary-General Ban Ki-moon on Tuesday accepted a request from President Asif Zardari to delay the release of a report on the assassination of his wife, former prime minister Benazir Bhutto, until April 15.

UN spokesman Martin Nesirky made the announcement just two hours before a three-member UN commission that investigated Benazir’s death was scheduled to hold a press conference to discuss the report’s findings. Nesirky said he did not know why President Asif Ali Zardari made the request, which was received at the UN overnight.

But presidential spokesman Farhatullah Babar said the country had requested the delay so the commission could attempt to question two heads of state who, he said, had called Benazirbefore her death warning her of “serious threats to her life.”

He declined to say which heads of state he was referring to, saying it would be unethical. It was unclear why the commission had not spoken to them. “This can make the report more credible,” he told the AP in Islamabad.

Nesirky said the commission informed Ban that “all relevant facts and circumstances have been explored and the report is now complete and ready to be delivered.” The three-member commission is led by Chile’s UN Ambassador Heraldo Munoz. The other members are former Indonesian attorney general Marzuki Darusman, now a member of the National Commission of Human Rights, and Ireland’s former deputy police commissioner Peter Fitzgerald, who headed the initial UN inquiry into the assassination of former Lebanese prime minister Rafik Hariri in 2005.

For more on this article, please click on the following link: UN delays Benazir murder report at Zardari’s request: The News