March 27, 2015
Date: March 27, 2015
A Friday rundown of Pakistan’s top policy headlines on JI’s radar this week
Interest Rates Decline on the Back of Falling Inflation
The State Bank on Monday decreased the benchmark discount rate to 8 percent, bringing the cumulative decline in interest rates since November 2014 to 2 percent. The reduction comes amidst a continuing decline in inflation, which is now projected to hover around an average of 4 percent for fiscal year 2014-2015. In Febuary, the unprecedented fall in global oil prices brought year-on-year inflation down to 3.2 percent – the lowest in 11 years.
Simultaneously, an improvement in foreign currency reserves resulted in Moody’s raising Pakistan’s credit rating to positive – the first time since 2006 – signalling a marked rise in confidence on Pakistan’s economic recovery.
However, despite these positives on the macro front, other key growth indicators continue to demonstrate that the government’s reform agenda hasn’t achieved full recovery. Despite the declining interest rates, credit up-take by the private sector hasn’t demonstrated significant increase, signalling a stymied investor outlook. Overseas Investors Chamber of Commerce and Industry (OICCI) also voiced concerns over investor confidence by reporting that no new significant foreign investment had been undertake n in Pakistan over the past few years. According to Atif Bajwa, President OICCI, annual FDI by existing members hovered around $1 billion annually, considerably less than the $5.5 billion figure for 2007-08.
Pakistan’s Saudi Gamble and Our Own Fight
The Foreign Office was compelled to issue a statement on Thursday after Saudi News Agency reportedly included Pakistan in a Gulf-led coalition attacking the Huthi rebels in Yemen. The Foreign Office spokesperson explained that the Kingdom of Saudi Arabia had made a request for Pakistan to join the coalition along with Bahrain, Qatar and UAE, but that the government had not reached a decision and the request was under consideration. On Thursday, Prime Minister Nawaz Sharif stated that a threat to Saudi territory will “evoke a response from Pakistan”, after a meeting attended by the Defence Minister, Advisor to PM on National Security, Chief of Army Staff and the Chief of Air Staff.
While the government is yet to take a decision to join the Gulf-led coalition against Houthi rebels in Yemen, the decision comes at a time when Operation Khyber II is being waged by thousands of Pakistani troops in Tirah Valley, in what may be the last major battle in pushing back the conglomerate of militant groups from the tribal agencies. This week 16 soldiers lost their lives in reclaiming the Masatul Pass, which militants use to cross over into Afghanistan’s Nangarhar province. One estimate holds that 300 militants have been killed in the fight for Tirah, where Pakistan’s indigenously developed drone Burraq has been used to “significant success”. Meanwhile, TTP splinter Jamaatul Ahrar’s chief and deputy chief both resigned this week, according to a statement issued on Wednesday, days after the group joined the TTP alongwith Lashkar-e-Islam to form a united front against the Pakistani armed forces.
A Juvenile Convict and the Death Penalty
The government’s decision to lift the moratorium on the death penalty – one in a slew of measures enacted in response to the brutal attack on the Army Public School in December by the TTP – continues to rattle and raise questions amongst Pakistan’s civil society. The most recent manifestation of the schism that characterizes public opinion can be witnessed through reaction to 24 year old Shafqat Hussain’s case
Hussain – a minor at the time of trial, at age 14 – has become the unwitting and unlikely poster boy for human rights campaigners looking to get the government to reconsider its stance on the death penalty. The case emblematizes many of the issues that plague Pakistan’s beleaguered judicial system, such as routine torture of prisoners to obtain confessions, the improper use of the Anti-Terrorism Court and lax attention paid to the status of prisoners in terms of their age.
Due to be executed on the 19th of March, Hussain’s hanging was postponed after a concerted effort by his lawyers and civil society activists. The 30 day stay will allow the government to adequately investigate and determine Hussain’s age at the time of arrest and trial and ascertain whether a miscarriage of justice has indeed taken place. As the number of executions carried out since the lifting of the moratorium has risen well above 50, this is an opportune time for the government to re-evaluate the impetus behind their decision and pay adequate attention to the efficacy of capital punishment as a deterrent.
Women contingents march during the Pakistan Day military parade in Islamabad on March 23, 2015.
Image Courtesy: AFP
Professor Tony Buzan, a Nobel Peace Prize nominee, has selected Pakistan as a starting point for his Butterfly Universe Initiative. The initiative is a global movement for mental literacy that aims to unleash the potential of 5 million children in the country by 2020 through mindmapping.