Prime Minister Narendra Modi with UP CM Yogi Adityanath during roadshow on the eve of filing his election nomination papers, in Varanasi on May 13, 2024.
| Photo Credit: AFP

Prime Minister Narendra Modi is a strong leader who has taken India to new heights and he will return as the country’s PM for a third term, a prominent Pakistani-American businessman has said.

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Baltimore-based Pakistani American businessman Sajid Tarar said Modi is not only good for India but for the region and the world and hoped that Pakistan too gets a leader like him.

“Modi is a remarkable leader. He’s a natural-born leader. He is the one prime minister who has visited Pakistan in adverse circumstances and risked his political capital. I’m expecting that Modi ji will start dialogue and trade with Pakistan,” Mr. Tarar said.

“A peaceful Pakistan is good for India as well. It is written everywhere that Modi ji will be the next prime minister of India,” Mr. Tarar said in response to a question.

Tarar moved to the U,S, in the 1990s and is well-connected with the ruling Pakistani establishment.

‘Rise of India amazing’

“It is nothing but a miracle that 97 crore people in India are exercising their franchise. India is the biggest and largest democracy. I’m seeing the popularity of Modi ji up there and the rise of India in 2024 is amazing. It’s a story to be told. You will see it in the future that people will learn from Indian democracy,” Mr. Tarar said.

PoK protests

Responding to a question, Mr. Tarar said Pakistan is going through an economic crisis which has resulted in social unrest in many parts of the country including Pakistan-occupied Kashmir (PoK).

“Pakistan is going through an economic crisis. Inflation is high. Petrol prices are high. The IMF wants to increase taxes. Electricity costs have gone up. We are not able to export,” he said. The protest in PoK is mainly due to the increase in electricity bills, he said.

Also read: No need to capture PoK by force; its people will themselves want to join India, Rajnath Singh feels

He questioned the decision of the Pakistani Prime Minister to give financial aid to the people of PoK.

“Where is the money going to come from? It’s discussing a new aid package from the IMF. Pakistan is going through a financial crisis,” he said.

“Regrettably, there is no effort to resolve the grassroots issues. How to increase exports. How to bring terrorism under control, and improve law and order. Currently, there is unrest in Pakistan like Kashmir (PoK), and there is political instability. We wish that we get some leadership who can take us to the next level away from all these issues,” Mr. Tarar said.

India, he said, is benefiting from its young demographic.

One police officer was killed and more than 100 people, mostly policemen, were injured in violent clashes between security forces and protesters agitating against high prices of wheat flour and electricity in Pakistan-occupied Kashmir, media reports said on May 12.

The region witnessed clashes on May 11 between the police and activists of a rights movement amid a wheel-jam and shutter-down strike across the territory, the Dawn newspaper reported.

Mirpur Senior Superintendent of Police (SSP) Kamran Ali told Dawn.com that sub-inspector Adnan Qureshi succumbed to a gunshot wound in the chest in the town of Islamgarh, where he was deployed along with other police personnel to stop a rally for Muzaffarabad via Kotli and Poonch districts under the banner of the Jammu Kashmir Joint Awami Action Committee (JAAC).

Also read: What is the outlook on the global economy? | Explained 

Protesters demand subsidised wheat flour, lower electricity rates

The JAAC, which has traders at the forefront in most parts of the State, has been seeking the provision of electricity as per hydropower generation cost in the region, subsidised wheat flour and an end to the privileges of the elite class.

The regional government called in the Rangers and a heavy contingent of policemen to stop the demonstrations.

Mobile phone and internet services were suspended in different parts of the PoK on May 12, including Bhimber and Bagh Towns, Geo News reported. In Mirpur, all the mobile networks and internet service have been suspended, it added.

PM Shehbaz Sharif “deeply concerned”

Pakistan President Asif Ali Zardari has called an emergency meeting related to the situation in the region at the President’s House on Monday, said sources.

They added that the president instructed stakeholders to bring proposals to resolve the issue. Prime Minister Shehbaz Sharif on May 12 said that he was “deeply concerned” about the situation in PoK.

“Unfortunately, in situations of chaos and dissent, there are always some who rush in to score political points. While debate, discussion and peaceful protests are the beauties of democracy, there should be absolutely no tolerance for taking the law in one’s own hands and damaging government properties,” he said in a post on X.

He said that he had spoken to PoK “prime minister” Chaudhry Anwarul Haq and directed his party’s office bearers in the region to talk to the leaders of the action committee. He called for peace and said, “Despite best efforts of detractors, the matter will hopefully be settled soon.”

Violent clashes rock PoK

On May 8 and May 9, around 70 JAAC activists were arrested by police during raids at their residences and those of their relatives in Muzaffarabad and Mirpur divisions, triggering serious clashes in Dadyal on May 9.

The committee had subsequently announced a shutter-down and wheel-jam strike on May 10, a day ahead of its planned long march towards Muzaffarabad Saturday.

Amid a crippling strike on May 10, violent clashes took place between police and protesters in different areas of Muzaffarabad, the capital of PoK.

On May 11, authorities placed mounds of earth on arteries leading to Muzaffarabad, apart from making more arrests, to prevent people from heading towards the city.

Witnesses said that Muzaffarabad division and Poonch division observed complete strikes.

SSP Yasin Baig said at least one police officer and a young boy were injured as police resorted to teargas shelling and aerial firing in some neighbourhoods after stones and bottles were pelted by protesters.

Kotli SSP Mir Muhammad Abid said that at least 78 policemen were injured in the district in “attacks of miscreants under the guise of protest”.

The SSP said 59 policemen, including Deputy Superintendent of Police Ilyas Janjua, and two revenue department officials were injured in Rehaan Galli while another 19 policemen were injured in Sehnsa Baroiyan.

A press release from the District Headquarters Hospital Kotli said apart from the 59 wounded policemen, nine injured protesters were also brought for treatment.

Mr. Abid said some police officials were also reportedly injured in Doliya Jattan.

 A total of 29 protesters were injured in the clashes, according to Geo News.

JAAC spokesperson Hafeez Hamdani said that the action committee had nothing to do with violence. “It seems that such elements have been purposely planted in the ranks of protesters to bring a bad name to a struggle that aims nothing but the legitimate rights of the people,” he said.

PoK’s so-called Prime Minister Haq said that the government was ready to give related relief to electricity and wheat flour prices after violent protests in Mirpur killed one officer and injured over 70 others.

“The government held negotiations with the Awami Action Committee (AAC) and we reached an agreement which we are determined to implement,” Geo News quoted Mr. Haq as saying.

Addressing a press conference on May 11, PoK Finance Minister Abdul Majid Khan said the government had exercised “maximum restraint and is ready for talks to peacefully address all contentious issues.

“Issues have to be resolved through dialogue and our doors are always open for negotiations. But the offer should not be misconstrued as a weakness of the government,” he said.

He said the government had accepted all demands of the action committee after which an agreement was signed between the committee and government negotiators, including the provision of targeted subsidy on flour and freezing the electricity tariff on June 2022 levels, but the committee later deviated from the agreement and announced a protest on new demands.

Authorities have banned public gatherings, rallies, and processions in all districts in the wake of protests, with Section 144 imposed in the entire region.

Economic activity is subdued in Pakistan, the World Bank noted. Representational
| Photo Credit: Reuters

The World Bank has painted a grim economic picture of Pakistan in its biannual report, cautioning that over 10 million more people are at risk of descending into poverty in the cash-strapped country. The Washington-based lender’s apprehension comes from a sluggish economic growth rate of 1.8% coupled with soaring inflation, a staggering 26% in the current fiscal year.

The World Bank’s biannual Pakistan Development Outlook report indicated that the country is set to miss almost all major macroeconomic targets. The international lender said the country is anticipated to fall short of its primary budget target, remaining in deficit for three consecutive years, contrary to the International Monetary Fund’s stipulations mandating a surplus.

Sayed Murtaza Muzaffari, lead author of the report, said despite a board-based yet nascent economic recovery, poverty alleviation efforts remain insufficient. The economic growth is projected to stagnate at a paltry 1.8% while maintaining the poverty rate at around 40%, with approximately 98 million Pakistanis already grappling with poverty, the World Bank report said.

Pakistan’s cost-of-living crisis

The report underlined the vulnerability of those hovering just above the poverty line, with 10 million individuals at risk of slipping into poverty. The report said that the poor and vulnerable are likely to have benefited from the windfall gain in agricultural output but these gains were offset by continued high inflation and limited wage growth in other sectors that employ many of the poor, such as construction, trade, and transportation.

The wages of daily labourers increased only 5% in nominal terms during the first quarter of this fiscal year when the inflation was above 30%, it said.

The persisting cost-of-living crisis coupled with rising transportation costs could potentially lead to an increase in out-of-school children and delayed medical treatments, particularly for worse-off families, warned the World Bank.

At the same time, it added that food security remains a concern in parts of the country.

Among 43 rural districts across Khyber Pakhtunkhwa, Sindh, and Balochistan, many of which were impacted by the 2022 floods, the prevalence of acute food insecurity is also projected to increase from 29% to 32% in the third quarter of this fiscal year, the report said.

Weak fundamentals

“Despite some recovery, Pakistan’s economy remains under stress with low foreign reserves and high inflation. Policy uncertainty remains elevated and economic activity is subdued, reflecting tight fiscal and monetary policy and import controls,” the World Bank said.

The Washington-based lender said growth is projected to remain below potential with heightened social vulnerability and limited poverty reduction in the medium term. “Financial sector risks, policy uncertainty, and stronger external headwinds pose significant risks to the outlook,” it added.

Pakistan’s current account deficit (CAD) narrowed to $0.8 billion in the first half of the current fiscal year from $3.6 billion in the first half of the last fiscal year, on import controls, reduced domestic demand, and lower global commodity prices, the report said.

Meanwhile, official remittances fell by 6.8% year-on-year in the first half of the current fiscal year due to exchange rate rigidities earlier in the year. “Inflation is projected to remain elevated at 26% in FY24 due to higher domestic energy prices, with little respite for poor and vulnerable households with depleted savings and lower real incomes,” it said.

The World Bank said the fiscal deficit is projected to widen to 8% of the GDP due to higher interest payments but gradually decline as fiscal consolidation takes hold and interest payments fall over time.

Pakistan’s economy is expected to grow by only 1.8% in the current fiscal year ending June 2024 whereas the official target is 3.5 per cent, the World Bank said. For the next fiscal year too, the World Bank has projected only a 2.3% economic growth rate, which is even lower than the population growth rate of 2.6%.

Pakistani traders went on strike against the soaring cost of living, including higher fuel and utility bills and record depreciation of the rupee against the dollar, which has led to widespread discontent among the public. File
| Photo Credit: AP

Pakistan’s inflation rate rose to 31.4% year-on-year in September from 27.4% in August, statistics bureau data showed on Monday, as the nation reels from high fuel and energy prices.

The country is embarking on a tricky path to economic recovery under a caretaker government after a $3 billion loan programme approved by the International Monetary Fund in July averted a sovereign debt default, but with conditions that complicated efforts to rein in inflation.

On a month-on-month basis, inflation climbed 2% in September, compared to an increase of 1.7% in August

Reforms required by the IMF bailout, including an easing of import restrictions and a demand that subsidies be removed, have already fuelled annual inflation, which rose to a record 38.0% in May.

Interest rates have also risen to their highest at 22%, and the rupee hit all-time lows in August before recovering in September to become the best performing currency following a clampdown by authorities on unregulated FX trade.

On Friday, the Ministry of Finance said in its monthly report that it anticipated inflation remaining high in the coming month, hovering around 29-31% due to an upward adjustment in energy tariffs and a major increase in fuel prices.

The report added that inflation was, however, expected to ease, especially from the second half of the current fiscal year that starts on January 1.

On Saturday Pakistan cut petrol and diesel prices from a record high, after two consecutive hikes. The Finance Ministry cited international prices of petroleum products and the improvement in the exchange rate, following the clampdown on unregulated FX trade.

Inflation has been elevated, hovering in double digits, since November 2021. The South Asian country targeted inflation at 21% for the current fiscal year, but it averaged 29% during the first quarter.

Worsening economic conditions, along with rising political tensions in the run-up to a national election scheduled for November, triggered sporadic protests in September, with many Pakistanis saying they are struggling to make ends meet.

Analysts said the inflation reading was in line with market expectations.

Tahir Abbas, head of research at Arif Habib Limited, a Karachi-based investment company, said inflation appeared to have peaked for the current fiscal year and would subsequently recede.

“The higher reading is mainly due to the low base effect which was also mentioned in the last monetary policy statement. Going forward, in the next few months, we expect inflation to ease to around 26-27%,” said Fahad Rauf, head of research at Ismail Iqbal Securities, a Karachi-based brokerage firm.

Mr. Rauf said higher inflation statistics should not impact monetary policy.

Pakistani shopkeepers close their businesses during strike against inflation in Lahore, Pakistan, on September 02, 2023. They protested the soaring cost of living, including higher fuel and utility bills and record depreciation of the rupee against the dollar.
| Photo Credit: AP

Thousands of Pakistan traders shuttered their shops on Saturday, striking over soaring energy and fuel bills stirring widespread discontent ahead of national elections.

Decades of mismanagement and instability have hobbled Pakistan’s economy, and this summer Islamabad was forced into a deal with the International Monetary Fund (IMF) to avert default.

However, the global lender demanded that popular subsidies cushioning living costs be slashed. Petrol and electricity prices have rocketed.

There were widespread market closures on Saturday in Lahore, Karachi and Peshawar, where abandoned bazaars were posted with placards decrying “the unreasonable increase in electricity bills and taxes”.

Also Read: Pakistan caretaker PM Anwarul Haq Kakar calls inflated electricity bills “non-issue”

“Everyone is participating because the situation has become unbearable now,” Lahore’s Township Traders Union president Ajmal Hashmi told AFP.

“Some relief must be given so people can put food on the table.”

Traders wield immense power in Pakistan, and with an election due in the coming months the government faces the delicate task of keeping them onside while sticking to IMF austerity measures.

Pakistan has historically been hamstrung by chronically low tax takings — including from traders — which have seen it accrue huge foreign debts it struggles to pay down.

The IMF hopes to end a cycle of bailouts which have propped up the economy for decades.

On Friday, caretaker Prime Minister Anwaar ul Haq Kakar said citizens would have to pay inflated bills as there is no “second option”.

“When you subsidise, you shift your fiscal obligations to the future. Rather than addressing the issue, you just delay it,” he told reporters in Islamabad.

The government raised petrol prices past the threshold of 300 Pakistan rupees ($1) per litre for the first time this week.

That exchange rate against the U.S. Dollar is the lowest in the nation’s 76-year history.

Also Read: Pakistan’s poll body pledges to hold general elections by mid-February

Meanwhile, fresh data showed year-on-year inflation in August stood at 27.4%, with motor fuel bills up 8% in July.

“The bills we have received this month exceed our earnings,” said Babar Mahmood, president of the Electronics Market Traders Union in Lahore.

“There is a growing disconnect between the general public and those in positions of power.”

A caretaker government has been ruling Pakistan since Parliament was dissolved last month, charged with ushering in elections, although no date has yet been announced.

The interim leadership, and the terms of the IMF deal, were hashed out by previous prime minister Shehbaz Sharif at the head of a shaky coalition which battled to turn around the economy in its short tenure after ousting Imran Khan in 2022.

Mr. Khan, Pakistan’s most popular politician, is in prison battling a slew of legal cases he says are intended to keep him from contesting the polls.

Meanwhile, the nation also faces a worsening security situation with nine soldiers killed in a suicide attack on Thursday.