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Pakistan Bankruptcy | Pakistan Economic Crisis : Pakistan stares at bankruptcy as economic crisis worsens

June 28, 2022 by economictimes.indiatimes.com Leave a Comment

Synopsis

Pakistani Rupee (PKR) is on a ‘free fall’ as it crossed 212 per USD on June 21. Whereas Pakistan’s foreign exchange reserves have depleted to a critical level and the country has less than six weeks of import cover remaining. The reserves are currently below USD 9 billion, according to a report published in Pakistan Tribune.

Pakistan is on the verge of bankruptcy as the country’s economic situation is facing a dire future with no immediate positive outlook despite ongoing negotiations between Islamabad and the International Monetary Fund (IMF) to resume the USD 6 billion bailout package from IMF .

Pakistani Rupee (PKR) is on a ‘free fall’ as it crossed 212 per USD on June 21. Whereas Pakistan’s foreign exchange reserves have depleted to a critical level and the country has less than six weeks of import cover remaining. The reserves are currently below USD 9 billion, according to a report published in Pakistan Tribune.

The Pakistani rupee has devalued by a massive 34 per cent (or PKR 53.67) in the past year. In contrast, it closed at PKR 157.54 in June last year. As a result, Pakistani Rupee has become Asia’s “worst-performing currency in 2022” with a fall of nearly 16.5 per cent (since December 31, 2001) against the US Dollar that put it at the bottom of a basket of 13 peers, including the Japanese Yen, South Korean Won, and Bangladeshi Taka.

The depreciation in PKR’s value comes as Pakistan battles a widening current account deficit, coupled with the

State Bank

of Pakistan (SBP)-held reserves hitting their lowest level since November 2019. Adding more problems to Pakistan’s economy and its population, the Shehbaz Sharif-led coalition government has recently increased fuel prices, third time in the last one month, to fulfil the IMF ‘conditionalities’ to revive the bailout package.

This has hit the common population severely as there are reports of shutdowns of cab services, restaurants, and home deliveries after the recent fuel hikes. Petrol prices in Pakistan have been raised by 56 per cent or PKR 84 (current price: PKR 233 per litre) and high-speed diesel prices have gone up by a massive 83 per cent (current price: PKR 263 per litre) since May 26, putting further pressure on the common people.

The government has taken these harsh measures to desperately revive the IMF programme, which is critical for Pakistan’s economy as many believe that this would bring more foreign lending and improve foreign exchange reserves that have fallen over 50 per cent in the last 10 months, according to a report in The Gulf News.

Pakistan’s Finance Minister Miftah Ismail announced the price rise of petroleum products saying the government had no choice but to “pass on the impact of international prices” to consumers in Pakistan. These developments have deepened the political turmoil in the country as Prime Minister Shehbaz Sharif blamed the former Prime Minister Imran Khan ’s government for policies that “damaged the economy,” and resulted in the recent fuel price hikes.

On the other hand, Khan castigated the coalition government for “succumbing to the IMF pressure” and warned that these increased prices would ultimately prove “bone breaking” for the salaried class in Pakistan.

Khan has called for nationwide protests against the rising fuel and food prices and warned that more hikes and inflation were in the offing and urged people to ramp up their struggle against the “imported government”.

Meanwhile, the Shehbaz Sharif-led government faces two main challenges here: stabilize the country’s economy, and to keep the common people happy amid looming general elections in Pakistan. Sharif understands that Imran Khan has got another weapon to target the coalition government besides continuing to cry foul over his “controversial” ousting from power in April this year. Therefore, the immediate resumption of the IMF’s financial programme may bring some stability, and work as a face-saver, in Pakistan’s economy, which could be projected as a success of the coalition government in the next elections. According to an Institute for Public Opinion Research (IPOR) poll, Islamabad-based survey research institute, 43 per cent respondents complained of adverse economic conditions during the Imran Khan-led Pakistan Tehreek-i-Insaf (PTI) rule, while on the contrary, 33 per cent felt the economy had improved during that period (Aug 2018 – Apr 2022). At the same time, 55 per cent respondents appealed to the incumbent government to bring inflation under control.

These findings suggest mixed views regarding economic policies of both the governments. The only silver-lining for the Shehbaz Sharif-led government is the possible revival of the IMF financial programme and an apparent support from the military establishment, mostly to bring the economic stability in Pakistan. Furthermore, China has shown willingness to provide fresh commercial loans of over USD 2 billion to Pakistan, according Pak media reports.

Beijing has been frustrated with how subsequent governments in Pakistan have mishandled the country’s economy, slowing down the progress of projects related to China Pakistan Economic Corridor (CPEC).

Perhaps, it is a conducive situation for China to further strangle Pakistan in its infamous “debt trap” policy through fresh loans and high interest rates. This will only increase Islamabad’s dependency on Beijing, both financial and strategic.

Soaring inflation, fuel and food price hikes, unavailability of essential commodities, shutting down of small businesses, and worsening political crisis may lead to Pakistan “default” for the ‘second’ time in the country’s history. The resumption of IMF programme and emergency loans from friendly countries will not provide long-term relief to Pakistan’s economic woes.

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Overturning of Roe vs Wade: America has taken another step towards democratic backsliding

June 26, 2022 by indianexpress.com Leave a Comment

In a democracy, can a right once granted be taken away? In the current international debate, this question has become part of the rising intellectual and political concern over “democratic backsliding”, a concept that depicts how democracies weaken and decline without collapsing fully.

As the world’s oldest surviving democracy, the United States has figured prominently in this debate, especially since Donald Trump rose to the presidency in 2016, engaged in a lot of anti-minority politics, and finally sought to overturn his 2020 election defeat. But after all is said and done, the American debate thus far has been about whether it is legitimate to put some restrictions on the exercise of franchise by racial minorities, who vote markedly less for the Republican party and considerably more for the Democrats. Strictly speaking, the debate has not been about the right to vote per se.

Also in Express Opinion | Absence of Roe v Wade won’t just impact the US

With the US Supreme Court’s decision on June 24 to overturn a half-century-old right to abortion, granted by a 1973 Supreme Court decision in the Roe vs Wade case, the debate has now become wider, as it moves from how to engineer voter suppression to the larger realm of rights. With a 5-4 majority, the court has said that American women have no nationwide right to abortion. Rather, state legislatures should decide whether women can have that right in their respective states. In several states, within hours of the court’s decision, abortion was banned, for prior legislation existed. Though Democratic states would steadfastly protect the right to abortion, nearly half of the 50 states are likely to go the other way. In the new field of democratic backsliding, comprising the retraction of rights, the floodgates have opened up.

In poll after poll, a majority of Americans, bordering sometimes on three-fourths of the population, support women’s right to abortion. So, what the court has done is against popular will. But that cannot be the principal criticism against the decision. Courts are not fundamentally governed by popular passion or will, which can fluctuate from election to election, but by constitutional propriety. The key question is whether the right to abortion was constitutionally justified.

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The 1973 court decision allowing the right to abortion was based on the 14th Constitutional Amendment (1868). This Amendment, the court said, allowed protection of liberty and privacy, something the state could not impinge upon. Thus, even though abortion was not mentioned in the 1787 US Constitution, abortion’s defence was derived from the 1868 Amendment — via its protection of citizens’ liberty about matters as intimate as a decision to have a child. The 1973 court also argued that this right was not absolute, limited as it would be by considerations of “protecting potential life”. This line of reasoning led to a trimester-based court ruling, which more or less forbade the government from interfering in the first trimester of pregnancy but the state could ban abortions in the third trimester, when “the viability of the fetus” was beyond doubt.

Explained | Roe v Wade: Why the coat hanger is seeing resurgence as an abortion symbol?

This whole structure of judicial reasoning has now collapsed. In the court’s opinion, the right to privacy stemming from the 14th Amendment is not relevant, for abortion concerns not only the pregnant woman but also the life of the unborn. Moreover, the court said, abortion is neither “enumerated” as a right in the original 1787 constitution nor is it consistent with American history and tradition. In short, it is a political and legislative, not a constitutional, matter. State legislatures should decide what is permissible.

How should a political analyst comment on this tussle? Hard as we might wish otherwise, constitutional decisions are inevitably tied up with politics. There is no escape from political reasoning.

First of all, no constitution can fully anticipate how the arc of rights would bend in the future. Abortion was not mentioned in the 1787 constitution, nor explicitly in the 1868 amendment. That is because women were not autonomous political agents at that time. Until they were given the right to vote in 1920, they were not a constitutional category in the US, as was true virtually everywhere in the world. Women are autonomous agents today. Norms change; rights evolve.

Second, as the court’s dissent note puts it, how can this majority decision ignore rape and incest? Why should women carry the child of a rapist, a father or an uncle? If abortion as a right is dissolved, women can be forced to give such unwanted births. The majority decision of the court is silent on this important matter.

Also Read | Explained: Can abortion pills overcome US state bans?

Third, having a child is not simply a deeply moral obligation to the unborn. It is also a decision that affects “the ability of women to participate equally in (the nation’s) economic and social life”. These words are from a later decision, known as Casey (1992), when the US Supreme Court added the concept of “undue burdens” to support the idea of abortion. As more and more women become scientists, professors, journalists, lawyers, managers, executives, politicians and sportspersons, these considerations cannot simply be brushed aside. If a woman chooses to terminate a pregnancy now but has a child later, that may be more consistent with her dreams and desires, to which she has a rightful claim.

Finally, men don’t have to deal physically with pregnancy, whereas the foetus grows inside a woman’s body for nine months. If men have the right over their bodies, which can’t be taken away by the government, why can’t women have autonomy over their bodies as well? Why should they be subjected to the government’s authority and supervision any more than men’s bodies? That men are free, but women must forcibly be chained to maternity, is an idea whose time surely has gone. Maternity must be a voluntary choice. There is no going back to the notion of rights as they were viewed in the 18th century — unequal, unneutral, unbalanced.

With the Supreme Court’s overturning of abortion as a constitutionally guaranteed right, America has taken another step towards democratic backsliding. Now, democratic renewal not only means fighting for more easily accessible voting procedures but also a push for a legislative codification of the right to abortion. Typically, as they evolve and deepen, democracies allow the arc of rights to broaden further, not retreat. After this judgment in the US, the stakes have become much higher and the democratic challenges bigger.

The writer is Sol Goldman Professor of International Studies and the Social Sciences at Brown University

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National action plan for circular economy to be set up

June 29, 2022 by vietnamnews.vn Leave a Comment

Minister of Natural Resources and Environment Trần Hồng Hà gives a speech at the conference. — VNA/VNS Photo Tuấn Anh

HÀ NỘI — The Ministry of Natural Resources and Environment on Tuesday chaired a conference to discuss a national action plan for Việt Nam’s circular economy.

Speaking at the conference, Minister of Natural Resources and Environment Trần Hồng Hà said that climate change, environmental pollution and natural ecosystem decline were crises for humanity today.

Last month, the World Meteorological Organisation released four key indicators of climate change, including greenhouse gas concentrations, sea level rise, ocean heat and ocean acidification. The indicators set new records in 2021, showing that human activities are causing planetary-scale changes on land, in the oceans, and in the atmosphere, with serious and lasting consequences for sustainable development and ecosystems.

“This is the consequence of the unsustainable model: resource extraction – production – consumption and finally disposal into the environment, which has occurred over the past 150 years,” said Hà.

“The United Nations warns that by 2030, if this economic model continues, demand for resources will triple, beyond the Earth’s supply capacity and the amount of waste will exceed the load capacity of the environment. If we act late, we will miss a valuable opportunity to ensure that the Earth is habitable and maintain a sustainable planet for all in the future,” he said.

Therefore, Hà believes the urgent requirement is to have a more efficient economic model for resource use, climate change prevention, pollution reduction and preventing environmental degradation.

Implementing the circular economy will initially face certain difficulties when Việt Nam lacks policies and technology for recycling and reuse.

“But, with the participation of the entire political system and the response of the whole society, in which enterprises and people are the driving force, we believe that it can be conducted soon,” said Hà.

To promote the circular economy, he proposed to concretise the Law on Environmental Protection, especially articles on the responsibilities of manufacturers and distributors when collecting, sorting and recycling waste products.

The State should promulgate policies to promote the environmental industry, including the recycling sector. It should also have a roadmap to replace fuels and products using poisonous materials and disposable products with environmentally friendly fuels and materials.

It is necessary to integrate the circular economy into strategies and master plans for the development of urban areas, industrial parks, export processing zones and thermal power centres.

Hà proposed to raise awareness of the business community and people on the circular economy and their responsibility of sorting waste at its source for recycling and reuse, calling for them to use environmentally friendly products.

Caitlin Wiesen, United Nations Resident Representative in Việt Nam, suggested to achieve an inclusive and low-carbon circular economy, Việt Nam needed to reduce fossil fuels and increase renewable energy, promoting sustainable production and consumption.

She emphasised that economic recovery from COVID-19 provided a historic opportunity to shift direction to a more inclusive and sustainable development model.

During the conference, domestic and international experts discussed successful circular economy models in the world and in the region and then identified suitable models that can be applied in Việt Nam. — VNS

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Think tank calls to raise and reform taxes in Scotland

June 28, 2022 by www.bbc.co.uk Leave a Comment

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Tax in Scotland needs to be both raised and fundamentally reformed, according to a think tank report.

Reform Scotland said the needs of an ageing population, at a faster rate in Scotland than elsewhere, mean that it will not be enough to tweak tax rates.

It argues tax reform is overdue, as the falling number of taxpayers meets the growing cost of more older people.

Governments, it said, should be looking to shift the tax burden from income towards wealth.

It also said the sources of tax need to be broadened.

The paper also considered the upfront investment needed to mitigate climate change. However, it did not consider the implications of Scottish independence.

  • Why more Scots pay higher income tax
  • Scottish income tax 2022-23 – What might you pay?

The Taxing Times report, written by Heather McCauley, a former government official in Scotland and New Zealand, said the tax system will need to be completely redesigned, rather than simply tinkering with the rates of current taxes.

She said: “Scotland will face increasing pressure on its public finances in the coming years, both as a result of global issues such as climate change and the pandemic recovery, but also because of local issues such as Scotland’s demographic challenge.

“Inevitably, higher tax revenue will be required to deal with this. In order to create the right environment for optimal tax raising, debate in Scotland needs to focus as much on the way money is raised as it does on the way money is spent.

“Having studied tax systems in similarly-sized countries across the world, from New Zealand to Scandinavia, it is clear to me that the current structure of Scotland’s tax system is not fit for the future.”

She said Scotland needed to start again, and to create a new and fairer tax system, focused more on immobile tax bases such as wealth and less on mobile ones such as employment income.

A new system would need to be used to drive sensible and sustainable increases in overall tax revenue, she added.

The paper highlighted that National Records of Scotland (NRS) projections are for Scotland’s population to begin falling in 2028 and reduce by 1.5% by 2045 while the UK population will grow by 5.8%.

The report said that in considering how to use its existing tax powers, raise new taxes or argue for further tax devolution, Scotland needs to consider the tax system as a whole and be clear about its direction of travel.

Climate change means that fossil fuel and other environmentally-damaging subsidies embedded in existing tax design need to be removed “as a matter of urgency” and all taxes, whether environmentally-focused or not, assessed for their environmental impacts, according to the report.

Reform Scotland is a think tank which looks at public sector reform and encouraging private sector growth, and is chaired by former Labour first minister Lord McConnell.

Its director Chris Deerin said: “Most people would prefer to pay less [tax], but we live in times where the demands on the public purse are growing.

“Scotland’s overall population is ageing while our working-age population is shrinking. We must find new revenue just to meet existing commitments, even as new commitments come on line too – such as funding a national care system.

“Meanwhile, the Covid epidemic has raised national debt levels and governments are also trying to help households through the cost of living crisis, with its consequences for heating bills, the weekly shop and mortgages.

“It’s very difficult to see how Scotland can meet its future commitments – whatever its constitutional status – without looking afresh at the tax system, at who and what we tax, and at what the right balance should be.”

‘More progressive taxes’

Finance Secretary Kate Forbes said the current devolution settlement limited the extent to which the Scottish government could deliver significant reform of the tax system.

She said: “The vast majority of tax powers remain reserved to the UK government, as do many key economic policy levers like migration. Independence would put the power to decide Scotland’s tax system in Scotland’s hands.”

The finance secretary said that the Scottish government had used the powers it had to create a “fairer and more progressive tax system”.

Holyrood has gained significant tax powers in recent years, notably over income and property sales.

The Scottish government has altered the rates and thresholds slightly, but not taken up the option of more fundamental reform, or tapped new revenue sources, or tackled problems with council tax and business rates.

More on this story

  • Scottish income tax 2022-23 – What might you pay?

    9 December 2021

  • Why more Scots pay higher income tax

    1 June

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  • Taxing Times- Why Scotland needs new, more and better taxes – Reform Scotland

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Imran Khan is rallying support for a return to the Pakistani prime ministership

June 20, 2022 by www.abc.net.au Leave a Comment

Pakistan’s ousted prime minister, Imran Khan says the people of Pakistan believe even a poor democracy would be better than a military government.

He spoke with ABC’s India Now! Host Marc Fennell as he continues to rally grassroots support to demand new elections.

Protests have continued in Pakistan among supporters of the deposed prime minister, as the country also faces the serious challenges of rising inflation as well as soaring fuel and food prices.

How did he lose the prime ministership?

Mr Khan was ousted as prime minister on April 10 following a no-confidence vote.

He’s since alleged this was part of a conspiracy, pushed by the United States administration because it was unhappy with his foreign policy decisions.

Yet there were claims that he’d lost crucial military support.

Since then, he’s campaigned publicly to be returned to the Prime Minister’s Office in Pakistan.

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“I think there’s consensus in the country that even a poor democratic government is better than a military government,” Mr Khan told India Now!

“Because, when the military intervention takes place, we go back to square one.”

An anti-corruption platform vs a crumbling economy

Elected in July, 2018, Mr Khan promised to fight corruption and fix the economy.

He maintains his government was balancing rising prices and economic sentiment.

However, as the cost of living in Pakistan rose, the opposition parties blamed him and the no-confidence motion followed.

His successors claim that the economic woes faced by Pakistan are his legacy.

He insisted the aftermath of the COVID-19 pandemic and commodity prices worldwide were being managed, but the regime change sent the markets into meltdown.

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No prime minister has completed a full term of office in Pakistan.

Mr Khan says his departure was different because it didn’t occur under the shroud of corruption.

He argues that Pakistan has been ruled by the military for most of its history, its importance was enhanced by the threat posed by India, and two families — the Bhutto and Sharif families.

“These two families have been ruling Pakistan for 30 years — now, the parties that were fighting have joined hands and are in government.”

Mr Khan was replaced in April by Shehbaz Sharif, the younger brother of three-time prime minister Nawaz Sharif, who was convicted in 2018 of having owned assets beyond his income.

“My government was replaced by a government where 60 per cent of the cabinet is on bail,” Mr Khan says.

“Rather than having a roadmap to fix the economy, all they’re doing is trying to get rid of the corruption cases of billions of rupees.”

No foreign interference

Mr Khan claims he has evidence that the United States demanded change.

He alleges that, on March 7, 2022, US Assistant Secretary of State for the Bureau of South and Central Asian Affairs, Donald Lu, sent a message to him through Pakistan’s ambassador to the US, Asad Majeed Khan: “If I’m removed, then all will be forgiven.”

“Now there is this American official, threatening our ambassador,” Mr Khan says.

He’s asked for an inquiry into his allegations that the US has participated in regime change.

“There is no truth to these allegations,” a US State Department spokesman said in April after he first made the claim.

Mr Khan does not want any foreign interference in Pakistan.

“I don’t want any support from foreign governments to get into power,” Mr Khan says.

Why not just wait until the next election in 2023?

When asked this question by the India Now! host, Mr Khan replied: “Because, Marc, this is insulting for a country of 220 million people that an elected prime minister is removed by this conspiracy.”

Mr Khan argued his policies on Afghanistan, Russian and China had upset Washington — he was in Moscow the day Putin’s troops crossed the border.

He says he was there to negotiate wheat and oil supplies and, while the timing was bad, he didn’t know what was about to occur.

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He’s also been dubbed “Taliban Khan” for his perceived support for the Taliban.

He insists the Taliban are a religious fundamentalist group, not terrorists.

“You know, somehow, we were made to be sort of friendly with Taliban, or sympathetic with them,” Mr Khan explains.

“People like us are sympathetic with the people of Afghanistan and, right now, you have Taliban as a reality.

“The world should work with them, because there is no other reality in Afghanistan now.”

On an episode of India Now!, that country’s High Commissioner to Australia, Manpreet Vohra, said relations between India and Pakistan were strained because of Pakistan’s support for terror organisations in the region.

Mr Khan rejects this and says Kashmir is the sticking point in the relationship — that is, he says, the denial of the Indian government for the Kashmiri people to determine their own future.

“India blames every incident that takes place in Kashmir on Pakistan,” he explains.

“The answer is not blaming Pakistan. The answer is to give the people of Kashmir the right to decide their own future.”

What next?

Imran Khan maintains the rule of law and an Islamic welfare state are the future of Pakistan he’d like to see.

“When I first went to England as a teenager, the two things that inspired me were the rule of law, and a welfare state,” he says.

Posted 20 Jun 2022 20 Jun 2022 Mon 20 Jun 2022 at 6:46pm , updated 21 Jun 2022 21 Jun 2022 Tue 21 Jun 2022 at 4:44am
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