Pakistan's Year-end 2014 Review: State of Economy, Politics and Security
I wish all my readers a very happy new year!
Pakistan's year 2014 saw major anti-terror actions by the military against the Pakistani Taliban (TTP) in their safe haven of North Waziristan and elsewhere in the country. The year-end massacre of children at a Peshawar school further galvanized the nation against terrorism. Pakistan Tehrike-e-Insaf's political rallies against the government drew huge turn-out of young urban middle-class Pakistanis. Pakistani economy showed clear signs of improving confidence with 3G-4G mobile broadband roll-out, Chinese investment commitments and booming stock market. Key challenges are successful execution of anti-terror campaign and energy-infrastructure projects. Here are some the major highlights and lowlights of the year 2014 in Pakistan:
Highlights:
1. Outrage against the killing of 130 school children in Peshawar helped galvanize Pakistanis to fight terrorism.
2. Civilian casualties from terrorism in Pakistan significantly declined from 3001 in 2013 to 1774 in 2014, according to South Asia Terrorism Portal. Biggest drop occurred since OP Zarb e Azb started 15 June 2014 after the terrorist attack on Karachi Airport.
Low-lights:
1. Slow recognition of the existential threat terrorism cost a lot of lives and hurt confidence in Pakistani state and economy. Failure to convict terrorists made the situation worse.
2. Violence against minorities continued with some of the most horrific incidents of killing and burning of innocent people.
3. Abuse of blasphemy law took its toll on an increasing number of people...both Muslim and non-Muslim.
8. Thar drought and children's deaths exposed incompetence and corruption of Sind provincial govt. Pakistan ranked worse than India on World Hunger Index for the first time in history.
Future:
Key lies in successful execution of anti-terror campaign and energy-infrastructure projects. It'll be a huge challenge for all Pakistanis, particularly the political and military leadership of the country.
Here's a video discussion of Pakistan's Year 2014:
http://vimeo.com/115777180
http://youtu.be/_xs4FNATloc
Pakistan's year 2014 saw major anti-terror actions by the military against the Pakistani Taliban (TTP) in their safe haven of North Waziristan and elsewhere in the country. The year-end massacre of children at a Peshawar school further galvanized the nation against terrorism. Pakistan Tehrike-e-Insaf's political rallies against the government drew huge turn-out of young urban middle-class Pakistanis. Pakistani economy showed clear signs of improving confidence with 3G-4G mobile broadband roll-out, Chinese investment commitments and booming stock market. Key challenges are successful execution of anti-terror campaign and energy-infrastructure projects. Here are some the major highlights and lowlights of the year 2014 in Pakistan:
1. Outrage against the killing of 130 school children in Peshawar helped galvanize Pakistanis to fight terrorism.
2. Civilian casualties from terrorism in Pakistan significantly declined from 3001 in 2013 to 1774 in 2014, according to South Asia Terrorism Portal. Biggest drop occurred since OP Zarb e Azb started 15 June 2014 after the terrorist attack on Karachi Airport.
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| Source: South Asia Terrorism Portal |
3. President Ashraf Ghani's election and policies helped improve Afghan-Pakistan ties, just in time for the US military pull-out from the region.
4. Deal signed for $45.6 billion to build Pak-China industrial corridor. It has the potential to set new FDI records and solve Pakistan's energy crisis and spar new wave of industrialization in special economic zones.
5. 3G-4G rollout and growth of smartphones helped increase access to Internet as subscribers signed up at a rate of a million a month to hit the 5 million mark in 5 months since the launch. High-tech startup ecosystem took shape with several successful startups in e-commerce, smartphone apps space, gaming, etc. Several VC deals closed. A dozen e-commerce startups are starting to take off in Pakistan.
6. New face of political protests rallies emerged with massive turn-out of young urban middle class Pakistani turning out for Pakistan Tehrik-e-Insaf rallies with music, containers, and drones.
7. In 2014, the KSE-100 Index gained 6,870 points thereby generating a handsome return of 27% (31% return in US$ terms), making Pakistan's KSE world's third best performing market. Total offerings in the year 2014 reached 9 as compared to 3 in the year 2013. After a gap of seven years, Rs 73 billion were raised through offerings in 2014 as compared to a meager Rs 4 billion raised in 2013. Foreign investors, that hold US$ 6.1 billion worth of Pakistani shares -which is 33% of the free-float (9% of market capitalization)-remained net buyers in 2014.
8. Pakistan organized biggest ever arms show IDEAS 2014 in Karachi. It attracted 333 defense-related companies including 50 companies from Pakistan. Delegates from 50 countries attended the show this year.
8. Pakistan organized biggest ever arms show IDEAS 2014 in Karachi. It attracted 333 defense-related companies including 50 companies from Pakistan. Delegates from 50 countries attended the show this year.
9. Malala Yousufzai became youngest Nobel Prize winner. Education got a boost with new reports indicating increased enrollment.
10. Several Pakistani-Americans, particularly women, made news in Silicon Valley and elsewhere in America. For example: Ashar Aziz, Umaima Mendhro, Shama Zehra, Mir Zafar Ali, Novaira Masood, Shan Kandawalla, Hana Dehradunwalla.
11. Pakistan was accepted as an associate member of CERN, one of the world's top research labs, ahead of India.
11. Pakistan was accepted as an associate member of CERN, one of the world's top research labs, ahead of India.
Low-lights:
1. Slow recognition of the existential threat terrorism cost a lot of lives and hurt confidence in Pakistani state and economy. Failure to convict terrorists made the situation worse.
2. Violence against minorities continued with some of the most horrific incidents of killing and burning of innocent people.
3. Abuse of blasphemy law took its toll on an increasing number of people...both Muslim and non-Muslim.
4. Polio continued to take its toll on children with number of confirmed cases at an all-time high of 296 in 2014.
5. India-Pakistan ties hit new lows after Hindu Nationalist hard-liner Narendra Modi was elected India's new prime minister. India stepped up covert war in Pakistan.
6. Poor governance created chaos with failure to respond to Model Town incident and rigging allegations.
7. Execution of energy and infrastructure projects continued to lag.
8. Thar drought and children's deaths exposed incompetence and corruption of Sind provincial govt. Pakistan ranked worse than India on World Hunger Index for the first time in history.
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| Source: IFPRI |
9. Pakistan-bashing books made brisk sales in the rapidly growing Indian book market.
Future:
Key lies in successful execution of anti-terror campaign and energy-infrastructure projects. It'll be a huge challenge for all Pakistanis, particularly the political and military leadership of the country.
Here's a video discussion of Pakistan's Year 2014:
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The market set new highs with rising volumes, up 2.3% WoW to close at 32,731pts. ADTO rose 18.9% WoW to 225mn shares, while average daily value traded showed 3.4% decline to US$127mn. In addition, foreign outflow witnessed last week seems to have lost momentum as FIPI saw outflow of US$15mn compared to inflow of US$7mn in the previous week.
ENGRO Fertilizer, National Foods, E.F.U. Life Assurance, Engro Foods Limited and Fauji Cement were the major gainers while Pak Suzuki Motors, J.D.W Sugar, Sui Southern Gas, Searle Pakistan and Abbot Laboratories were the major losers in the benchmark KSE-100 this week.
News This Week
Demerger of project: Hubco given tax exemption
Govt announces cut in oil prices and raises GST by 5%
Govt misses half-year collection target by PRs90bn
Reserves fall to US$14.94bn (SBP)
Draft securities bill submitted to NA
Attock Cement to set up coal-fired power plant
The S&P BSE Sensex closed at 27,499.42 points Wednesday, up 0.4% from Tuesday. The index had hit an all-time high of 28,822.37 on Nov. 28. The National Stock Exchange’s Nifty index also rose 0.4% to 8,282.70.
Investors poured billions of dollars into Indian stocks this year on hopes that the country’s new government led by Prime Minister Narendra Modi will speed up policy changes to boost the economy. Data from the country’s market regulator show foreign investors bought $16 billion worth of Indian shares in 2014.
India’s government expects the south Asian economy to grow 5.5% in the year through March, recovering significantly from the below-5% expansion in the previous two years.
“If reforms come through and the economy as well as corporate earnings show the expected recovery, foreign investors will continue to flock to India,” said Amar Ambani, head of research at brokerage firm IIFL. They could invest another $12 billion to $13 billion in the next six to eight months, he added.
Besides the optimism generated by Mr. Modi’s promise to overhaul the economy, a sharp drop in global crude oil prices has also helped cool inflation and improve growth prospects.
The possibility that the central bank may lower interest rates next year because inflation is declining could guide Indian markets even higher, said Jayant Manglik, president-retail distribution at Religare Securities Ltd.
Investors would also watch for any rate increases by the U.S. Federal Reserve, Mr. Manglik added. Higher rates in developed economies are a risk for Indian markets as these could prompt foreign investors to pull out of emerging economies.
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Banks, automobiles and pharmaceutical stocks were the best performers this year, while metal and energy stocks were among those that got beaten down due to a fall in global commodity prices.
Axis Bank jumped 94% in 2014, while Maruti Suzuki surged 89%. Tata Steel was the biggest loser among the 30 Sensex stocks, declining about 6% during the year.
In the currency market, the rupee strengthened marginally against the U.S. dollar Wednesday, but ended the year weaker. In late-session spot-market trading, a dollar was buying 63.19 rupees, compared with 63.38 rupees Tuesday. For 2014, the rupee was down about 2%.
http://www.wsj.com/articles/india-shares-post-best-annual-performance-in-5-years-1420026250
“I’m optimistic because this is the first time in many years that the political parties are struggling in unison to find solutions,” Ashraf Mahmood Wathra, 59, said on Jan. 2 at his wood-paneled Karachi office, his first interview since he was appointed in April as the third head of the State Bank of Pakistan in four years. “They seem to be very serious.”
Opposition parties ended five months of street protests against Prime Minister Nawaz Sharif after Taliban militants killed 134 students on Dec. 16 in one of the country’s worst terror attacks. Wathra didn’t give a timeframe for growth to reach 8 percent, up from 4.1 percent in the year ended June. Pakistan’s economy last grew more than 8 percent in 2005.
Pakistan’s Turmoil
Sharif has struggled to revive the economy since taking office in May 2013 as terrorism and political discord hinder efforts to privatize state-run companies and ensure a steady power supply. Growth will pick up to 4.3 percent this fiscal year from an average 3.8 percent over the past four years, the International Monetary Fund projected last month.
“Eight percent growth is possible but not immediately,” said Yawar-uz-Zaman, vice president at Shajar Capital Pvt. in Karachi. “Provided we continue eliminating terrorists, which will encourage foreign and local investment, we may achieve this target in five years.”
All-Party Consensus
All political parties agreed to change the constitution to ensure that military courts can hold quick trials for accused terrorists, Sharif said in a Jan. 2 statement. It reiterated recent commitment to “degrading, dismantling and destroying all forms of terrorism,” moving from a decades-long policy of targeting militants that strike in Pakistan while indirectly supporting those that attack abroad.
Foreign direct investment rose 19 percent from a year earlier to $423 million in the five months since June, when the Pakistani military began bombing militants in tribal areas near the Afghan border.
“Pakistan could open up to business and foreign investment interest once again” when terror is quelled, Sakib Sherani, chief executive officer at Islamabad-based research company Macroeconomic Insights, said by e-mail. “The war on terror has done incalculable damage to Pakistan’s economy since 9/11.”
Terror attacks have cost Pakistan about $29 billion in the three years through June 2014 and the $232 billion economy has lost $102 billion since the U.S. invaded Afghanistan in 2001, the government estimates.
Asset Sales
Governor Wathra, who has 35 years of banking experience, said the administration also needs to do more to improve public finances. It scrapped its biggest share sale in eight years amid the anti-government protests and slumping oil prices.
“We certainly missed our target on the sale of OGDC,” Wathra said, referring to Oil and Gas Development Co. “We expect the divestment of Habib Bank to do extremely well. The banking market attracts a lot of foreign investors.”
Pakistan plans to garner about $1.2 billion by selling a 42 percent stake in Habib Bank Ltd., the nation’s largest by assets, as it works toward meeting goals under an IMF program.
Progress has been “broadly on track,” the Washington-based lender said. It last month disbursed a $1.05 billion loan, taking total receipts to $3.2 billion under the $6.8 billion facility agreed in 2013....
http://www.bloomberg.com/news/2015-01-04/pakistan-central-banker-sees-8-growth-on-united-terrorism-fight.html
When officials in Pakistan's Sindh province constructed hundreds of desalination plants, they were only thinking of how to counter a long-running drought.
Along with providing much-needed drinking water, however, authorities hope to provide an economic boost and new jobs for the impoverished Thar majority – in the form of fish farms. They are planning to
populate the brackish water left behind by the desalination process.
"This is a revolutionary step, which will bring sustainable development in the area," Sen. Taj Haider, who heads the Thar Drought Relief Operation, told News Lens Pakistan. "It will also generate revenue, which will be spent for the local development."
Sindh's Thar Desert, which covers 77,000 square miles in southeastern Pakistan, has been in the grip of a drought since December 2013 that has left more than 1,000 dead, most of them children under the age of 5. The drought, blamed on a lack of rain, has also devastated agriculture and killed nearly 4,000 cows, sheep and goats.
As part of the massive relief operations, Sindh officials have launched plans to build hundreds of desalination plants that use reverse osmosis to covert salt water into drinking water. They promised to build 750, but so far have built 345.
When pure water is produced by reverse osmosis, thickly contaminated salty water is left behind.
Authorities came up with the fish farming plan to use that remaining salt water. They plan to collect the remaining water in tanks and use it for the fish farms. Farms are set to start operating this month and
will be funded by the Pak Oasis, the company that built the desalination plants – with a farm being constructed on the grounds of each facility.
So far, the plan has received a mixed reception from local residents. Some complain it will do nothing to alleviate the drought and may just be a short-term fix.
"Reverse osmosis plants are not a permanent solution," said Kanji Bheel, a resident of Chacharo city. "We need permanent solution, like a canal."
"The government is unable to save sheep for which desert is habitat. How can they introduce fish farming in the desert?," Bharumal Amrani, a social activist, told News Lens Pakistan. "It's nothing but a joke [for] the people of Thar."
Others are happy to find the desalination plants in their area and see the fish farms as a chance to make extra money.
"It always took long hours every day to fetch water, and even that water is brackish. But now we have filtered water at our doorstep," said Mohsin Ali Rahimoon, a resident of Bakhwo village.
https://thefrontierpost.com/alvi-congratulates-aps-survivor-on-his-president-of-oxford-union-election/
President Dr Arif Alvi Sunday congratulated Ahmad Nawaz, a survivor of Army Public School, Peshawar terrorist attack on being elected as President of Oxford Union.
The president on his Twitter handle, said that youths were the biggest hope of Pakistan. Despite all setbacks, Pakistan would keep on shining and rising, he added.
Ahmad Nawaz had lost his brother Harris in the heinous Peshawar massacre on 16th December 2014 along with other students and members of the teaching staff.
“Our biggest hope are youth of Pakistan. I congratulate Ahmad Nawaz, an APS survivor who also lost his brother Harris in the heinous Peshawar massacre, on being elected as President of Oxford Union. We must register that despite all setbacks Pakistan will keep on shining & rising,” the president posted.