DAWN Editorials - 5th April 2025
Posted: Sat Apr 05, 2025 12:19 pm
Electricity relief
FINALLY, some tangible relief. With the worst of the inflationary storm now behind us, the government’s decision to slash the electricity tariff for domestic and industrial consumers will give honest bill-payers some much-needed breathing space in the coming months.
Their budgets ravaged by extended periods of high inflation, most households have long been at the end of their tether. Millions have been forced to make many painful adjustments in order to absorb eye-watering increases in the cost of living over the past three-odd years. These sacrifices have undoubtedly augmented public discontent against the incumbent ruling parties.
Now, the government wants citizens to know and feel that the end of the crisis is finally in sight. With prices of most items of domestic use stabilising and electricity tariffs also being slashed by a not insignificant amount, it is hoping that citizens will finally be able to appreciate the ‘economic turnaround’ it has long touted as its major achievement.
Likewise, domestic industry, which has been complaining loudly about losing its competitive edge ever since the government jacked up electricity prices in order to rationalise them under strict conditions imposed by the IMF, finally has something to cheer about. The electricity tariff cut will help producers trim their expenses and boost their profitability, which has excited the stock market no end. The benchmark KSE-100 Index flirted with all-time highs following the announcement as investors priced in the impact of lower electricity rates on the balance sheets of their favoured companies.
The government will obviously be hoping that its ‘Eid gift’ will provide a fillip to industrial activity, which has been sluggish amidst the overall slowdown in the economy. The rate cut will also help exporters, who hold the key to a broader economic turnaround, absorb some of the headwinds from the ongoing upheavals in global trade.
Most encouragingly, the prime minister has promised that the authorities will push for more reductions in electricity pricing in the coming months. Further tariff cuts are to be achieved by curtailing losses of around Rs600bn each year due to electricity theft, opening up electricity market operations, and, finally, by either privatising power distribution companies or handing them over to the provinces, the prime minister said.
These measures have long been advocated by energy market analysts and policy experts but never meaningfully pursued by the authorities. If this government puts its foot down and manages to ensure that the requisite reforms are implemented, it will earn much praise and commendation for reforming a vital segment of the economy.
Similarly, it must also correct the imbalances inherent in other aspects of the economy, especially the obvious unfairness in the state’s revenue policies, if it wishes to improve ordinary citizens’ lives while meeting its obligations to foreign lenders.
Published in Dawn, April 5th, 2025
Trump’s trade wars
THE so-called reciprocal tariffs rolled out recently by American President Donald Trump have expanded his vicious trade war beyond China, Canada and Mexico onto a global scale. The new levies, which Mr Trump said are a response to the barriers placed on US exports and aim to boost manufacturing jobs at home by making imports expensive, signal the end of an era of global trade liberalisation that has shaped the world economy in the post-World War II years. That financial markets everywhere tumbled as he brandished a list of allies and adversaries slapped with steep tariffs of up to 50pc for running trade surpluses with the US underpins concerns of an imminent escalation in the current trade war towards a potential global recession. Not only are the tariffs not reciprocal, they are also based on the premise that a trade deficit is a sign that a given country is somehow treating the US unfairly. This reasoning disregards the fact that a ‘one-size-fits-all’ approach cannot be applied to countries with different resources and vastly different levels of wealth. The shoddy math applied to indiscriminately penalise its trading partners means that even the poorest nations have been slapped with steep tariffs just because the US buys more from them than they can afford to buy from the US. Lesotho — a tiny African nation that sells diamonds and jeans to the US — is a case in point.
The dilemma of Pakistan running a trade surplus of more than $3bn with the US is not very different. The 29pc additional tariff dealt to Pakistan is very large, and can adversely impact its exports — three-fourths of which comprise textiles and clothing — to its single largest export destination. The situation may worsen if the US heads into a recession as is widely feared, and if competition in the European market also intensifies. Opinion is, however, divided on the size of its impact since the country’s competitors — Bangladesh, Vietnam, Cambodia, Indonesia, etc — have been burdened with larger import taxes. The immediate question for countries such as ours is how to deal with the emerging situation. Unfortunately, the government has preferred to maintain radio silence on the issue as it appears totally clueless on how to proceed and engage the American authorities in order to get some concessions for our exporters.
Published in Dawn, April 5th, 2025
Legalised land grab
THE Modi government has passed a new bill targeting the Muslim community, this time eyeing swathes of priceless real estate traditionally owned and managed by Muslim waqf boards. Under the new statute, the government has put its foot in the door by assigning crucial decision-making in endowment disputes to a state official. The bill renames the 1995 Waqf Act and calls it the Unified Waqf Management, Empowerment, Efficiency and Development Act. The stated objective is to enhance the efficiency of the administration and management of waqf properties. The opposition says it is a euphemism for land grab. The Modi government from its inception has been attacking India’s minorities, the largest such community in its crosshairs being the Muslims. While Sikhs, Christians and Dalits bear the bias equally, targeting Muslims seems more institutionalised and strategically advertised. Much of the assault has come from state-sponsored mobs but increasingly, the state has become a direct party in targeting Muslims. A current example is the vengeful bulldozing of Muslim homes and shops by state governments, ignoring a bar on such action by the Indian supreme court.
The irony is that the ideologically driven ruling establishment leans on patriarchal traditions and lores to subvert the progress of Hindu women while it clamours for an anomalous role as the saviour of Muslim women. It justifies the new bill by making it mandatory for Muslim women to be members of waqf boards. Opposition leaders pooh-pooh the claim, saying women are already mandated to be board members by a preceding Act. The likeliest reason for the controversial law lies perhaps in the Modi government’s overriding interest in granting favours to friendly business captains. The most extravagant building shaping Mumbai’s skyline is owned by a tycoon close to the Modi regime. It was built on controversially acquired waqf land originally donated for the education of poor children belonging to a steadily marginalised and increasingly pauperised Muslim community.
Published in Dawn, April 5th, 2025
FINALLY, some tangible relief. With the worst of the inflationary storm now behind us, the government’s decision to slash the electricity tariff for domestic and industrial consumers will give honest bill-payers some much-needed breathing space in the coming months.
Their budgets ravaged by extended periods of high inflation, most households have long been at the end of their tether. Millions have been forced to make many painful adjustments in order to absorb eye-watering increases in the cost of living over the past three-odd years. These sacrifices have undoubtedly augmented public discontent against the incumbent ruling parties.
Now, the government wants citizens to know and feel that the end of the crisis is finally in sight. With prices of most items of domestic use stabilising and electricity tariffs also being slashed by a not insignificant amount, it is hoping that citizens will finally be able to appreciate the ‘economic turnaround’ it has long touted as its major achievement.
Likewise, domestic industry, which has been complaining loudly about losing its competitive edge ever since the government jacked up electricity prices in order to rationalise them under strict conditions imposed by the IMF, finally has something to cheer about. The electricity tariff cut will help producers trim their expenses and boost their profitability, which has excited the stock market no end. The benchmark KSE-100 Index flirted with all-time highs following the announcement as investors priced in the impact of lower electricity rates on the balance sheets of their favoured companies.
The government will obviously be hoping that its ‘Eid gift’ will provide a fillip to industrial activity, which has been sluggish amidst the overall slowdown in the economy. The rate cut will also help exporters, who hold the key to a broader economic turnaround, absorb some of the headwinds from the ongoing upheavals in global trade.
Most encouragingly, the prime minister has promised that the authorities will push for more reductions in electricity pricing in the coming months. Further tariff cuts are to be achieved by curtailing losses of around Rs600bn each year due to electricity theft, opening up electricity market operations, and, finally, by either privatising power distribution companies or handing them over to the provinces, the prime minister said.
These measures have long been advocated by energy market analysts and policy experts but never meaningfully pursued by the authorities. If this government puts its foot down and manages to ensure that the requisite reforms are implemented, it will earn much praise and commendation for reforming a vital segment of the economy.
Similarly, it must also correct the imbalances inherent in other aspects of the economy, especially the obvious unfairness in the state’s revenue policies, if it wishes to improve ordinary citizens’ lives while meeting its obligations to foreign lenders.
Published in Dawn, April 5th, 2025
Trump’s trade wars
THE so-called reciprocal tariffs rolled out recently by American President Donald Trump have expanded his vicious trade war beyond China, Canada and Mexico onto a global scale. The new levies, which Mr Trump said are a response to the barriers placed on US exports and aim to boost manufacturing jobs at home by making imports expensive, signal the end of an era of global trade liberalisation that has shaped the world economy in the post-World War II years. That financial markets everywhere tumbled as he brandished a list of allies and adversaries slapped with steep tariffs of up to 50pc for running trade surpluses with the US underpins concerns of an imminent escalation in the current trade war towards a potential global recession. Not only are the tariffs not reciprocal, they are also based on the premise that a trade deficit is a sign that a given country is somehow treating the US unfairly. This reasoning disregards the fact that a ‘one-size-fits-all’ approach cannot be applied to countries with different resources and vastly different levels of wealth. The shoddy math applied to indiscriminately penalise its trading partners means that even the poorest nations have been slapped with steep tariffs just because the US buys more from them than they can afford to buy from the US. Lesotho — a tiny African nation that sells diamonds and jeans to the US — is a case in point.
The dilemma of Pakistan running a trade surplus of more than $3bn with the US is not very different. The 29pc additional tariff dealt to Pakistan is very large, and can adversely impact its exports — three-fourths of which comprise textiles and clothing — to its single largest export destination. The situation may worsen if the US heads into a recession as is widely feared, and if competition in the European market also intensifies. Opinion is, however, divided on the size of its impact since the country’s competitors — Bangladesh, Vietnam, Cambodia, Indonesia, etc — have been burdened with larger import taxes. The immediate question for countries such as ours is how to deal with the emerging situation. Unfortunately, the government has preferred to maintain radio silence on the issue as it appears totally clueless on how to proceed and engage the American authorities in order to get some concessions for our exporters.
Published in Dawn, April 5th, 2025
Legalised land grab
THE Modi government has passed a new bill targeting the Muslim community, this time eyeing swathes of priceless real estate traditionally owned and managed by Muslim waqf boards. Under the new statute, the government has put its foot in the door by assigning crucial decision-making in endowment disputes to a state official. The bill renames the 1995 Waqf Act and calls it the Unified Waqf Management, Empowerment, Efficiency and Development Act. The stated objective is to enhance the efficiency of the administration and management of waqf properties. The opposition says it is a euphemism for land grab. The Modi government from its inception has been attacking India’s minorities, the largest such community in its crosshairs being the Muslims. While Sikhs, Christians and Dalits bear the bias equally, targeting Muslims seems more institutionalised and strategically advertised. Much of the assault has come from state-sponsored mobs but increasingly, the state has become a direct party in targeting Muslims. A current example is the vengeful bulldozing of Muslim homes and shops by state governments, ignoring a bar on such action by the Indian supreme court.
The irony is that the ideologically driven ruling establishment leans on patriarchal traditions and lores to subvert the progress of Hindu women while it clamours for an anomalous role as the saviour of Muslim women. It justifies the new bill by making it mandatory for Muslim women to be members of waqf boards. Opposition leaders pooh-pooh the claim, saying women are already mandated to be board members by a preceding Act. The likeliest reason for the controversial law lies perhaps in the Modi government’s overriding interest in granting favours to friendly business captains. The most extravagant building shaping Mumbai’s skyline is owned by a tycoon close to the Modi regime. It was built on controversially acquired waqf land originally donated for the education of poor children belonging to a steadily marginalised and increasingly pauperised Muslim community.
Published in Dawn, April 5th, 2025