NIAS Area Studies
PAKISTAN READER
In Brief
POLITICS
Operation Azm-e-Istehkam approved by federal cabinet
On 25 June, the federal cabinet approved the Azm-e-Istehkam military operation, a “reinvigorated national counter-terrorism drive” in Pakistan, despite protests by the opposition parties. Earlier on 22 June, Prime Minister Shehbaz Sharif had approved the operation during the Apex Committee meeting and assured that citizens would not be troubled during the operation. He had revealed that the intelligence-based operations would be carried out only against terrorists. The operation has been approved with the consensus of all stakeholders, including provinces: Gilgit Baltistan and Pakistan-occupied Kashmir (PoK). In a statement, the PM office stated: “The approval of the operation symbolizes the national resolve to eradicate all forms of extremism and terrorism from the country.” Opposition parties, including the PTI, Jamiat-e-Ulema Islam Fazl (JUI-F), and Awami National Party (ANP), have raised concerns over the new military operation, urging Parliament’s assurance for it. In this regard, Defence Minister Khawaja Asif assured that the government would satisfy the concerns of PTI regarding the anti-militancy operation and provide satisfactory answers to their concerns.
Pakistan People’s Party (PPP) leader Raza Rabbani demanded the government constitute a Parliamentary Committee on National Security to review Azm-e-Istehkam, stating that all legislation on National Security should be initiated through the Parliamentary Committee. (“Federal cabinet 'okays' Operation Azm-e-Istehkam,” The News International, 25 June 2024)
Government cuts PSDP size
On 25 June, the National Assembly decided to cut the proposed Public Sector Development Programme (PSDP) of PKR 1.4 trillion by PKR 250 billion to create fiscal space. The move is proposed to help withdraw some taxes without compromising the expected International Monetary Fund (IMF) deal. This makes the PSDP’s approval of over 17 per cent by the National Economic Council. On 12 June, Federal Finance Minister Muhammad Aurangzeb announced PKR 14 trillion for development spending which has now been slashed to PKR 1.15 trillion. This had not been confirmed till 25 June due to the paucity of time to change the budget documents. This is the fifth change made within a month which the media has described as a poor budget exercise by the economic team.
Earlier, the finance ministry had recommended an allocation of PKR 1 trillion for the PSDP then increased to PKR 1.221 trillion. The third change came with a proposal of up to PKR 1.5 trillion. The fourth change was the reduction of the indicative number to 1.4 trillion. Slashing PSDP is general but changing it even before the approval passed by NA is rare. Due to this, the finance ministry has faced criticism. Even after the cutting of PKR 250 billion on PSDP, the budget remains “unrealistic.” (Shahbaz Rana, “Govt cuts proposed PSDP down to size,” The Express Tribune, 25 June 2024)
PM Sharif meets Bill Gates, promises to eradicate polio
On 24 June, Prime Minister Shehbaz Sharif met Bill Gates and officials of the Bill and Melinda Gates Foundation (BMGF) in Pakistan and gave reassurances that Polio would be completely eradicated from Pakistan. The meeting was focused on the National Taskforce for Polio Eradication. Earlier, when the PM had met Gates at the World Economic Forum, he had highlighted Pakistan’s sustained effort to eradicate polio. PM Shehbaz endorsed the joint efforts taken by the federal and provincial governments to eradicate polio and highlighted the five polio eradication campaigns carried out in the past six months. Further, nine additional positive environmental samples were identified which totals the current year record to 185 with five polio case records. Bill Gates stressed the continuation of polio eradication efforts for the next two to three years. Discussions between Gates and Pakistan officials like PM Shehbaz and Khyber Pakhtunkhwa Chief Minister Ali Amin Gandapur have taken place earlier. In addition, PM discussed other sectors like digitization which is anticipated to bring huge dividends to the economy. (“In meeting with Bill Gates, PM Shehbaz vows to eradicate polio from Pakistan,” Dawn, 24 June 2024)
ECONOMY
Despite economic crisis, KSE-100 “best-perfoming market” in Asia
On 25 June, Pakistan’s stock market showed resilience by emerging as the best-performing market in Asia in 2024, despite the economic crisis. The KSE-100 index reflected a 27 per cent increase in dollar terms. Experts are anticipating further gains and they say the recently announced budget centered on securing new loans from the IMF boosted investor confidence. Topline Securities Ltd and Arif Habib Ltd anticipated that the KSE-100 index could see an additional 10 per cent increase by the end of the year. Ali Hussain, Head of Research at Dubai-based Frontier Investment Management Partners Ltd said, “There's a lot of juice left in this rally. Cheap valuations, high positive real rates, and a fairly valued currency make a very attractive case right now.”Further, Pakistan has also increased taxes on industries like cement, automobile, and steel to achieve IMF’s guidelines. This increases the investors' trust and helps in sustaining the market’s momentum over the next few years. (“KSE-100 index leads as Asia’s best-performing market,” The Express Tribune, 25 June 2024)
SECURITY
Seven injured in hand grenade attack in North Waziristan
On 25 June, seven people were injured after unknown assailants lobbed two hand grenades at a vehicle entering security forces convoy on Khaisore Road near Mirali town of North Waziristan district. One grenade hit the security forces’ vehicle and the other hit a civilian car. However, no casualty has been reported. A police contingent reached the spot to initiate an investigation and shifted the injured people to Mirali Hospital. The Police also filed a case against the unknown assailants. (“Seven injured as grenades lobbed at security forces’ convoy in North Waziristan,” Dawn, 25 June 2024)
PROVINCES
Gilgit-Baltistan: Finance Minister announces budget for FY25 amid opposition’s protests
On 25 June, the provincial government announced the budget for the fiscal year 2024 -2025 of PKR 140.17 billion. The budget presentation took place amidst protests by opposition members. The budget allocated PKR 86.6 billion for non-development expenditures and PKR 34.60 billion for development projects. The government also provides a PKR 68 billion grant. The non-tax revenue amounts to PKR 6.40 billion. Further, the budget deficit is estimated at PKR11.92 billion. The finance minister also stated that the GB budget was dependent on the financial grants by the federal government and the local government’s limited revenue generated. The budget proposed four billion for PM initiatives and PKR 19.70 billion for subsidized wheat. Like other provinces, the province announced a 25 per cent salary increase for grades one to 16 and a 20 per cent increase for employees in grades 17 and above. The Finance Minister also announced a 36 per cent increase in the local revenue collection this year, with PKR 3 billion against the target of PKR 3.8 billion. He noted the growth in Northern Areas Transport Corporation. The government also successfully reduced expenditures on fuel and maintenance of official vehicles.
The opposition leader Kazim Mesum and opposition members initiated a protest against the budget criticizing it for neglecting key sectors like health and agriculture. They tore the budget copies and disrupted the procedure using loudspeakers and chanting slogans. The speaker adjourned the session until 26 June to take forward the budget discussion. (Jamil Nagri, “GB unveils Rs140bn deficit budget,” Dawn, 25 June 2024)
Khyber Pakhtunkhwa: Support denied for Operation Azm-e-Istehkam
On 25 June, the Khyber-Pakhtunkhwa government denied backing Operation Azm-e-Istehkam until there was a clarification on its details and procedures. KP Information Adviser Barrister Saif mentioned the meeting between CM Ali Amin Gandapur and National Assembly members, discussing the specifics of the operation. Saif stated: "The public has not been informed about the operation’s method and duration." He also raised public concerns about the operation, underlining that, and “Consultation with provinces is essential for any action against terrorism”. He also emphasized KP’s frontline role in the war against terrorism and noted the province’s inability to counter it effectively. He stated that the CM met Imran Khan at Adiala Jail to seek his opinion on the operation and revealed that “The PTI founder stated that without clear details, the operation should not be supported.” CM observed that the Apex court committee on NAP’s policy outline declined mention of any operation. He stated: “I will comment after ISPR's policy is clear. It is necessary to take the public and provinces into confidence, considering the losses we've faced.” (“K-P govt withholds support for Operation Azm-e-Istehkam,” The Express Tribune, 24 June 2024)