Experts foresee further economic hardships as weekly inflation hits 38.4 percent in Pakistan

People throng at a wholesale market in Karachi on February 1, 2023. (Photo courtesy: AFP)
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Updated 18 February 2023
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Experts foresee further economic hardships as weekly inflation hits 38.4 percent in Pakistan

  • The surge in inflation is attributed to increased fuel prices along with a rise in power tariff, general sales tax
  • Financial experts say current market sentiment is based on the assumption of another increase in policy rate

KARACHI: Financial experts in Pakistan on Saturday warned of spiraling inflation of up to 40 percent in the coming months after official data revealed that weekly inflation in the country had touched 38.4 percent on an annual basis in the wake of a recent surge in fuel prices.

Pakistan raised the rates of petroleum products by up to 8.9 percent on Wednesday to implement prior actions agreed with the International Monetary Fund (IMF) to unlock a stalled $7 billion bailout program.

The weekly inflation, measured by Sensitive Price Indicator (SPI), recorded an increase of 2.9 percent for the week ending Thursday, February 16. The surge was primarily observed in the prices of energy and food items.

According to the data released by the Pakistan Bureau of Statistics (PBS) on Friday, petrol price increased by 8.8 percent, diesel 6.5 percent, five-liter cooking oil 8.7 percent, one-kilogram vegetable ghee 8 percent, chicken 7.5 percent, and 2.5-kilogram vegetable ghee 6.8 percent.

“In the coming months, the inflation rate is expected to increase by 35 to 40 percent due to the government’s decision to increase gas and electricity tariffs, hike in general sales tax, and the escalation in fuel prices,” Abdul Azeem, head of research at the Spectrum Securities, told Arab News.

“The price hike in [the Muslim fasting month of] Ramadan will also contribute to the inflationary pressure which is likely to increase by two percent, as we witnessed last year on a month-on-month basis,” he added.

Pakistan has been grappling with dangerously low forex reserves along with the impact of rapid depreciation of national currency against the United States dollar since an artificial cap on the exchange rate was removed last month.

The monthly inflation rate recently hit a multidecade high of 27.6 percent which, according to financial experts, can go as high as 40 percent in the coming months.

Asked about the overall fiscal year, analysts said they expected average inflation to be at about 30 percent.

“The average inflation rate for the current fiscal year is expected to remain at around 30 percent,” Samiullah Tariq, director research at the Pakistan-Kuwait Investment Company, told Arab News. “The high inflation rate will impact the purchasing power of people and eventually lead to consumption loss.”

As Pakistan and the IMF continue to negotiate for the completion of ninth review of the bailout program that has been on hold since November, the overall market sentiment is based on the assumption that the government would further jack up the policy rate in the coming days.

“With rising inflation, markets are expecting up to two percent increase in the interest rate,” Muhammad Sohail, CEO of Topline Securities, told Arab News. “High interest rate will curtail demand which may eventually led to lower inflation.”


UN disarmament fellows arrive in Pakistan on international study tour

Updated 21 October 2024
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UN disarmament fellows arrive in Pakistan on international study tour

  • The visit aims to familiarize international diplomats with Pakistan’s policy frameworks in arms control, disarmament and non-proliferation
  • Established in 1978, UN Program of Fellowships on Disarmament offers valuable training, exposure to young professionals from across world

ISLAMABAD: A group of fellows, working with a United Nations (UN) program on disarmament, have arrived in Pakistan on an international study tour, the Pakistani foreign office said on Monday.
The visit, organized by the Pakistani government in collaboration with the UN Office for Disarmament Affairs (UNODA), aims to familiarize international diplomats with Pakistan’s policies and institutional frameworks in arms control, disarmament and non-proliferation.
The fellows will tour the Pakistan Center of Excellence on Nuclear Security (PCENS), the Pakistan Institute of Nuclear Science & Technology (PINSTECH), the Pakistan Ordnance Factories (POF) in Wah Cantt, the Heavy Mechanical Complex (HMC) in Taxila, the National Center for Physics (NCP), and the Center for International Strategic Studies (CISS).
“At PCENS, the participants will receive detailed briefings on Pakistan’s nuclear safety and security architecture, regulatory frameworks, and the safeguards adopted in line with international standards, which have been recognized by the International Atomic Energy Agency (IAEA),” the foreign office said in a statement.
“At PINSTECH, they will observe the Pakistan Atomic Research Reactor and the peaceful applications of nuclear technology in health, industry, agriculture, food security, and power generation.”
Established in 1978, the United Nations Program of Fellowships on Disarmament is a prestigious initiative of UNODA and offers valuable training and exposure to young professionals. This is the second time Pakistan is hosting the international study tour for the UN disarmament fellows.
On Monday, the UN fellows visited the Ministry of Foreign Affairs, where they were briefed on Pakistan’s stance on arms control, disarmament and non-proliferation.
Ambassador Tahir Andrabi, Pakistan’s director-general for arms control and disarmament, emphasized the importance of unrestricted access to dual-use technologies for peaceful socio-economic applications.


Italy arrests 13 Pakistani, Afghan and Iraqi suspects in ‘people trafficking ring’

Updated 21 October 2024
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Italy arrests 13 Pakistani, Afghan and Iraqi suspects in ‘people trafficking ring’

  • The suspects were picked up in several Italian cities including Bologna, Rome and Milan on Sunday
  • Investigators uncovered a ‘criminal organization rooted in Turkiye and Iraq,” with branches elsewhere

ROME: Italian police said Monday they had arrested 13 suspected members of a smuggling ring transporting migrants from the Middle East and South Asia into Italy and onto France.
The suspects, from Iraq, Pakistan and Afghanistan, were picked up in several Italian cities including Bologna, Rome and Milan on Sunday, prosecutors in Catanzaro in the southern region of Calabria said.
They are accused of criminal association and money laundering.
Investigators had gathered evidence of a “criminal organization rooted in Turkiye and Iraq, with branches in Italy, France and Greece, dedicated to managing the sea transport of irregular migrants,” prosecutors said in a statement.
These migrants came from countries including Iraq, Iran, Afghanistan, Pakistan, Syria and Lebanon, and were brought onto the coasts of Calabria.
The organization had a network of compatriots who housed the arrivals in the Crotone area and bought train or bus tickets to the Italian border with France, where smugglers helped them pass via the Ventimiglia area.
Three commercial premises in Ventimiglia, Rome and Milan were also seized during the operation, the suspected locations of illegal money transfers using the “hawala” system, an informal method of payment based on trust that is far more difficult to trace than bank transfers.
Italian Prime Minister Giorgia Meloni, who has made clamping down on irregular migration a priority, hailed the arrests, saying her government was “determined to dismantle these criminal networks and to eradicate illegal human trafficking.”


Pakistan begins process to choose new top judge after passage of contentious constitutional amendment

Updated 21 October 2024
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Pakistan begins process to choose new top judge after passage of contentious constitutional amendment

  • Pakistan parliament has allowed a 12-member parliamentary committee to pick chief justice from a panel of three senior-most judges
  • Previously, the Supreme Court’s second-most senior judge automatically became the chief justice when the top judge retired at age 65

ISLAMABAD: Pakistan on Monday began the process to choose the new chief justice of the country, following the passage of a controversial constitutional amendment that empowered parliament to appoint the top judge among other changes.
The current Chief Justice Qazi Faez Isa is due to retire this Friday. Previously, the Supreme Court’s second-most senior judge automatically became the chief justice when the top judge retired at age 65, but analysts say there had been concerns within the government circles that senior judges below Isa and in the high courts had shown leniency to Khan in a number of cases.
In an extraordinary session that began on Sunday and continued overnight into Monday, Pakistan’s parliament passed the 26th Constitutional Amendment that allows a 12-member parliamentary committee to pick the chief justice from a panel of three senior-most judges of the Supreme Court.
“I have the honor to invite your kind attention to Article 175A of the Constitution of the Islamic Republic of Pakistan, whereby the chief justice of Pakistan is to be nominated by the special parliamentary committee from among the three most senior judges of the Supreme Court,” Speaker Ayaz Sadiq wrote in a letter to parliamentary heads of political parties in the National Assembly, lower house of parliament.
“Foregoing in view, MNAs [members of the National Assembly] from your party may be nominated for the said committee, accordingly.”
The parliamentary committee will comprise eight members from the National Assembly and four from the Senate, the upper house of parliament.
Sadiq also wrote to Senate Chairman Yusuf Raza Gilani to nominate four senators for the panel.
Pakistani politicians have long complained about judicial overreach into matters of governance, stoking tensions between the judiciary and legislature.
Former prime minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) opposition party and the legal fraternity opposed the amendment, saying the changes were aimed at curtailing the powers of judiciary.
Barrister Aqeel Malik, the government’s legal adviser, told Arab News the process of appointing judges to high courts as well as selecting the chief justice from a panel of three senior most judges required greater parliamentary oversight and input.
“This in no way curtails the judiciary’s powers, but it does ensure parliamentary oversight and a greater role in the selection and appointment of judges, all within the constitutional framework,” he said.
 
“This will ensure not just the seniority principle, but of course other considerations such as legal wisdom, acumen and overall general administrative experience.”
Malik said the parliamentary committee would begin its deliberations immediately and it has until Wednesday to send its recommendations to the prime minister, based on a majority vote among the three senior-most judges for the appointment of the chief justice of Pakistan.
Pakistan’s top court has become a battleground between the government and jailed former Prime Minister Imran Khan, ruling on issues ranging from a controversial national election to a potential military court trial for Khan and his supporters.
Former cricket star Khan, 71, has been in jail for over a year. His 2022 removal from office and subsequent clashes with the military have triggered Pakistan’s worst political turmoil in decades.
“It is a black day in our constitutional history and for judicial independence,” Gohar Ali Khan, chairman of Khan’s party, said as the Pakistan parliament moved to pass the 26th constitutional amendment in wee hours of Monday.


Experts say 26th constitutional amendment ‘threatens’ judiciary’s independence as government refutes claim

Updated 21 October 2024
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Experts say 26th constitutional amendment ‘threatens’ judiciary’s independence as government refutes claim

  • The amendment states a 12-member parliamentary committee will appoint the chief justice from a panel of three senior-most judges
  • Aqeel Malik, the government’s adviser on legal matters, says a name for the new chief justice will be finalized in the next few days

ISLAMABAD: Experts on Monday described a 26th amendment to the constitution as an attempt to curtail the judiciary and make it subservient to politicians as the government moved forward with its implementation, saying the new law will ensure parliamentary oversight in judicial affairs.
Pakistan President Asif Ali Zardari signed into law the contentious amendment, passed by the country’s parliament, that capped the tenure of the country’s top judge at three years and made key changes relating to the appointment of judges in Pakistan among other things.
The ruling coalition had the amendment passed by both houses of parliament on Sunday night amid opposition from former prime minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party and the legal fraternity, who argued it was an attempt to curtail the independence of the judiciary. The government denied this.
“The 26th Constitutional Amendment is not only against basic fundamental human rights but it has also weakened the judiciary by making it subservient to politicians, who are often litigants themselves,” Ishtiaq Ahmed Khan, former president of the Lahore High Court (LHC) Bar Association and a member of the Pakistan Bar Council (PBC), told Arab News.
He said the amendment would “undermine meritocracy and promote favoritism” by giving the right of judicial appointments to parliament.
“The government will have a majority in the parliamentary committee and will appoint judges who serve their interests rather than justice,” Ishtiaq added.
The 26th Constitutional Amendment, 2024 states that a 12-member parliamentary committee will appoint the chief justice from a panel of the three senior-most judges of the top court. The committee comprising eight members from the National Assembly and four from the Senate will propose the name to the prime minister, who will then forward it to the president for final approval. The top judge will be appointed for a period of three years and will retire upon reaching the age of 65 years.
Another clause of the bill states that the Supreme Court judges will be appointed by a judicial commission, led by the chief justice and comprising three senior judges, one member each from the National Assembly and the Senate, federal law minister, attorney general of Pakistan, and a nominee of the Pakistan Bar Council having not less than 15 years of practice in the Supreme Court. The commission will also monitor judges’ performance and report any concerns to the Supreme Judicial Council.
Political commentator Aasiya Riaz said the amendment had significant political and legal ramifications as it would change the “structure of the judiciary for the foreseeable future.”
“The change in process of appointment of judges in higher judiciary has meant that the annihilation of the system is now complete and if there was ever an opportunity that any judge could act on the basis of right and wrong alone, that has been taken care of,” she said.
Since the appointments are now to be made on political considerations of the ruling parties that have a track record of being “compliant and subservient to the political pressures,” leadership of the judiciary will also now be picked on that basis, according to Riaz.
“The amendment has taken care of any chance of a likely leadership in the judiciary not susceptible to playing ball with the military establishment,” she said.
“It has also, at least for the foreseeable future, taken care of the likely political fortunes of Imran Khan, which were apparently coming his way if the existing process of appointment of senior most judge in the Supreme Court was followed.”
PTI spokesperson Sayed Zulfikar Bukhari said the amendment had clear political implications as the government was attempting to eliminate any threat from the judiciary that could “hinder their political ambitions in the future.”
“As for legally, this has completely clipped the judiciary’s wings and it has also made the chief justice of Pakistan irrelevant to a very large extent,” he told Arab News.
Barrister Aqeel Malik, the government’s legal adviser, denied the claims that the amendment curtailed the powers of the judiciary in any way.
“This in no way curtails the judiciary’s powers, but it does ensure parliamentary oversight and a greater role in the selection and appointment of judges, all within the constitutional framework,” he told Arab News.
Malik said the process of appointing judges to high courts as well as selecting the chief justice from a panel of three senior most judges required greater parliamentary oversight and input.
“This will ensure that not just the seniority principle, but of course other considerations such as legal wisdom, acumen and overall general administrative experience,” he added.
Malik said the formation of the parliamentary committee would be completed on Monday and it would begin working immediately on the appointment of the new chief justice.
“As outlined in the amendment, a special parliamentary committee of 12 members will begin its deliberations today or tomorrow, three days before the current chief justice’s retirement and they have until Oct. 23 to send their recommendations, based on a majority vote among the three senior-most judges for the appointment of the chief justice of Pakistan for a three-year term,” he said.
“This does not mean that Justice Mansoor Ali Shah is not under consideration, with all three candidates receiving due consideration despite the constitutional amendments, he remains a strong candidate for the position of the chief justice of Pakistan.”
Asked about the PTI’s future course of action, Bukhari said it was obvious that the party would have to “bear the brunt of this constitutional amendment results.”
“There is only one course of action and that is the only thing that can save the judiciary and save democracy and the rule of law in Pakistan and that is nationwide protest at a large scale,” he said.
Ahmed Bilal Mehboob, president of the Pakistan Institute of Legislative Development and Transparency (PILDAT) think tank, said the amendment was brought as superior courts had been asserting themselves on “political, economic and purely executive decision-making in the country.”
“A reaction had been building within politicians and parliament to this situation and the passed amendment is mainly a way to restrict the courts so that they are unable to pass judgments which sometime even defy constitution,” he told Arab News.
“After this amendment, chief justice will be selected by a parliamentary committee, a constitutional bench within the Supreme Court will become a kind of court within the court resulting in a chief justice who will be much less powerful than before and parliament will be in a more powerful position,” he said.
Mehboob said the implementation of the amendment would tell whether a balance is attained between the judiciary and parliament, or the pendulum has swung to the other extreme.
“If implemented maturely, it may lead to greater political and economic stability,” he added.


Pakistan Navy seizes narcotics worth $145 million in Arabian Sea operation

Updated 21 October 2024
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Pakistan Navy seizes narcotics worth $145 million in Arabian Sea operation

  • The cache included 2,000 kilograms of hashish, 370kg ice or crystal meth, and 50kg heroin
  • The seized drugs were handed over to the Anti-Narcotics Force, the Pakistani military says

ISLAMABAD: Pakistan Navy has seized a sizeable cache of narcotics worth $145 million during an operation in the Arabian Sea, the Pakistani military said on Monday.
The seized narcotics included 2,000 kilograms of hashish, 370kg ice or crystal meth and 50kg heroin, according to the Inter-Services Public Relations (ISPR), the Pakistani military’s media wing.
The seized cache was handed over to the Anti-Narcotics Force.
“Pakistan Navy is always active to prevent all kinds of illegal activities in the maritime boundaries of the region,” the ISPR said in a statement.
The development came days after Pakistan Navy seized 1.3 tons of narcotics, valued at approximately $26 million, during a targeted operation in the North Arabian Sea, according to a statement issued by the navy.
The operation, codenamed as ‘Himalayan Spirit,’ was conducted by Pakistan Navy ship Zulfiqar, which was assisted by the US Navy and US Coast Guard ships in intercepting suspicious fishing boats.