DAWN Editorials - 12th March 2025

[zarnishhayat]

State Bank’s caution

THE State Bank’s decision to pause its monetary easing cycle, after six consecutive cuts of 1,000bps in its key policy interest rate since June to 12pc, in spite of a bigger than expected drop in inflation last month, reflects its efforts to achieve a balance between emerging strains on the economy and the fragile macro stability.

Though CPI inflation is down to just 1.4pc because of declining food and energy prices, the “inherent volatility” in these prices poses significant risks to the current downward trend going forward. In addition, the sticky core inflation remains elevated. This means a halt in the monetary easing cycle is necessary to beat it down and counter the impact of a potential rebound in food and energy prices.


The external account has also come under pressure of late because of shrinking financial inflows and rising imports due to an uptick in economic activity amid growth in private sector credit. The current account deficit of around $0.4bn in January hacked away at the surplus of just above $1bn accumulated over the past several months with the help of rising remittances.

The current account is being used to make foreign debt payments due to weakening private and official capital flows into the financial account. The exchange rate remains stable but the international reserves accumulated in the last eight months have dropped slightly on account of debt payments due to a delay in some of the planned inflows, which may come through after the IMF review of its $7bn programme. Foreign debt repayments of $3bn, the net of rolled-over and refinanced loans, are yet to be made during the remaining period of FY25. Further, increased global economic uncertainty amid tit-for-tat tariff escalations amounting to a trade war between the major economies has posed a risk to international trade, commodity prices and inflation outlook.


No doubt the economy has come a long way from the edge of default less than two years ago, thanks to the implementation of stabilisation policies under IMF oversight. Key macro indicators have improved. But Pakistan is still not out of the woods. Both the fiscal and external sectors remain under stress, impeding the consolidation of the nascent recovery and the economy’s movement towards faster growth.

While the fiscal sector is suffering due to lack of reforms to broaden the tax net, with FBR due to miss the fiscal year’s tax target of Rs12.97tr by a big margin, foreign private and official flows have nearly halted. The global uncertainty caused by a steep hike in US tariffs has set off new disturbing forces. Without large, sustainable foreign capital inflows and structural tax reforms, the State Bank will continue to find it difficult to ease monetary policy without risking another deeper balance-of-payments crisis.

Published in Dawn, March 12th, 2025


Syria massacre

THERE were valid fears of sectarian and religious bloodshed when anti-Assad militants triumphantly marched into Damascus last December. Yet then rebel leader and now interim President Ahmad al-Sharaa, who traded in his jihadi fatigues for sharp suits, promised the world that there would be no place for such bloodshed in the new Syria. His promise has been severely tested as a spasm of bloodshed has rocked the Arab state over the past few days. There were initial reports of clashes last week between armed Assad loyalists and government forces in the coastal Alawi heartland. However, more horrific details have emerged, of Alawi families being butchered, or their possessions looted. According to a UK-based war monitor, nearly 1,000 civilians have been killed in the violence, most of them belonging to the Alawi community, to which Bashar al-Assad also belongs. Eyewitnesses say children were slaughtered by pro-government militants, while the attackers repeatedly said they would finish off members of the minority community. Some victims say that non-Syrian fighters, including Chechens and Uzbeks, were involved in the rampage. The bloodbath only subsided after the Syrian administration sent in troops to control the marauding militant groups.

Syria stands at a very dangerous junction. Mr Assad and his brutal regime may be gone, but the country is far from achieving stability. The fact is that the transition from religious militancy to democratic statecraft is proving to be a difficult one. Mr Sharaa — known for his fiery jihadi rhetoric when he was better known as Abu Mohammad al-Jolani — has promised moderation, but the fact is that many fairly extreme militant factions still operate in Syria. In fact, many foreign militants have been given positions in the Syrian administration. Controlling these factions will be essential if Syria’s rulers are serious in assuring the world there is no room for extremists in their country. Further complicating matters is the fact that Israel has expanded its occupation of Syrian territory. For Syria to rebuild, all foreign forces must stop their interventionist activities, while Damascus must disarm or expel all sectarian and extremist groups active in the country. This will be easier said than done as many of these outfits helped Mr Sharaa achieve victory. The interim Syrian leader has promised accountability for the recent sectarian massacres. He will need to act fast before such atrocities become the norm.

Published in Dawn, March 12th, 2025


Too little, too late

WHEN desperation reaches a point that a father has to end his life to save his daughter’s, the state has failed its citizens spectacularly. Such an extreme measure was taken recently in Dera Ismail Khan. Adil, a poor barber, endured torture, extortion of Rs700,000, and the ultimate cruelty: having his 11-year-old daughter forcibly taken away as vani —‘compensation’ — for an alleged conversation between his nephew and another girl. This crushing injustice drove him to consume poison, leaving behind a heartbreaking audio testimony that indicts our failed institutions. Vani is not merely a barbaric ‘custom’ — it is a crime. Child marriage laws criminalise underage marriage, and the Prevention of Anti-Women Practices (Criminal Law Amendment) Act, 2011, makes it illegal to give women as compensation to settle disputes. Yet, out-of-court settlements and tribal ‘justice’ continue unabated, rendering the state’s writ meaningless. How can a panchayat be allowed to function as judge, jury, and executioner while the authorities look the other way? The fact that police action came only after a man’s suicide speaks volumes about the state’s failure to protect its citizens.

The incident reflects a disturbing pattern where women are routinely punished for society’s warped sense of ‘morality’. In another case, a woman and her infant son were shot dead in an act believed to be an ‘honour’ killing since she had married of her own free will. The arrests made after the vani incident, while necessary, represent too little, too late. The state must dismantle all panchayats practising such rulings, establish proactive police monitoring in vulnerable areas, and swiftly prosecute all involved in such ‘verdicts’. The KP government must establish specialised units to identify and prevent vani before it occurs, rather than merely responding to tragedies. Educational campaigns are essential, but meaningless without enforcement. More must be done. A father should not have to end his life to protect his daughter in a nation of laws.

Published in Dawn, March 12th, 2025