Photo : Dawn
NIAS Area Studies
PAKISTAN READER
Photo : Dawn
In Focus
Pakistan continues its efforts to build case against India
On 1 May, Dawn reported that Islamabad continues to voice its concerns with other countries regarding the surge in tensions with India. PM Shehbaz Sharif, in his discussion with the Chinese Ambassador Jiang Zaidong, highlighted that India’s incursion attempts could divert Islamabad’s attention from countering militancy which is originating from Afghanistan. Further, he claimed that in order to establish peace and stability in the region, the dispute over Jammu and Kashmir needs to be resolved. In discussions with Qatar’s emir Sheikh Tamim bin Hamad Al-Thani, PM Sharif claimed that New Delhi is “weaponizing” water on which the entire Pakistan’s entire population is dependent.
On the same day, Chief of Army Staff General Asim Munir warned that any incursion attempt from India against Pakistan would be met with a “swift, resolute and notch-up response.” PM Sharif and President Zardari also expressed their deep commitment towards ensuring Pakistan’s “territorial integrity.” On the other hand, PPP Chairman Bilawal Bhutto claimed that though India has been vocal about its concerns regarding terrorism, its “real target” is the Indus River.
On 2 May, a repot in Dawn alleged that New Delhi has failed to garner international support for its narrative against Pakistan. As per the report, US President Donald Trump denigrated the concerns raised by India. Further, Dawn highlighted how the Under Secretary of Defence of the US, Elbridge Colby did not name “Pakistan, terrorism and Pahalgam” in the communique issued after he held a discussion with India’s envoy to the US. With regards to China, the report viewed Beijing’s stance as “balanced.” However, it claimed that Beijing had provided its tacit support to Islamabad’s demand of holding a fair inquiry into the Pahalgam attack. Further, the report viewed the stance taken by Saudi Arabia, UAE and Qatar as “measured and noncommittal.” The three countries have only stressed on “de-escalation and peaceful resolution.”
On 2 May, an opinion in The News International titled “Why India’s treaty hubris could backfire” claimed that for long the Indian government had been looking for a pretext to suspend the Indus Water Treaty. As per the azuthor Murad Ali, India will, however, not be able to redirect the flow of water, given the difficult contour of the Himalayas. Further, he claimed that the move could also be an indication to other countries such as Bangladesh, Nepal and Bhutan that India can anytime take a U-turn on bilateral agreements. In addition to that, China could do the same thing to India, what the latter is attempting to do with Pakistan, given its upper-riparian status. (Syed Irfan Raza, “Pakistan presses diplomatic gains as tensions simmer,” Dawn, 2 May 2025; Baqir Sajjad Syed, “India’s post-Pahalgam gambit fails to win global support,” Dawn, 2 May 2025; “Army chief pledges swift response to Indian misadventure,” The News International, 2 May 2025; “Allegations just an excuse: India’s real target is Indus River, says Bilawal,” The News International, 2 May 2025; Murad Ali, “Why India’s treaty hubris could backfire,” The News International, 2 May 2025)
In Brief
POLITICS AND GOVERNANCE
“My faith in the parliamentary system has eroded completely,” says BNP President Mengal
On 2 May, Balochistan National Party President Sardar Akhtar Mengal reasserted the party’s demand for the release of Dr Mahrang Baloch, the chief organizer of the Baloch Yakjehti Committee and other party workers. He vowed to continue the struggle until they recover all the missing activists. While speaking at the Balochistan Bar Association in Quetta, he criticized the silence of the state institutions and their lack of independence and said “The judiciary and parliament were not working independently and not playing their true role.” This statement follows the authorities’ inaction and failure to investigate and identify the perpetrator of the suicide attack that occurred in the BNP-M sit-in camp in the Lak pass area. Mengal also expressed his doubts regarding the legitimacy of the electoral process, and alleged that the results were falsified. He warned that the limited provincial autonomy under the 18th Amendment is at risk. He also emphasized on the state’s failure to address enforced disappearances happening across Balochistan and raised concern over the prolonged refugee crisis and criticized Islamabad’s involvement in the regional conflicts such as the war in Afghanistan.(“Mengal reiterates demand for Mahrang’s release,” Dawn, 2 May 2025)
On resilience of Pakistanis:
“Accosted with irrational belligerence by an unusually ornery neighbor, Pakistanis have not lost their calm,” highlights an editorial in Dawn
On 2 May, an editorial in Dawn titled “Defiant Unity” pointed out that Pakistanis have once again demonstrated their strength and resilience in the face of recent threats. Despite internal disagreements and divisions, they have put up a united front, setting aside their differences for a common goal. The nation’s response has remained measured and composed, even in the face of serious provocations. People have continued with their daily lives as usual, confident in their ability to overcome this crisis—just as they have countless times before. This calm resolve of the Pakistani people is a key strength and must not be “taken for granted.” It is also worth questioning whether dissent or support for the opposition should be equated with “disloyalty.” Having diverse views and disagreements with one another is normal and reflects “a healthy, passionate sense of national identity.” Differences in outlook should never be taken to suggest that someone disagrees with the fundamental “principles” on which the nation was built. Over the past week, Pakistanis have demonstrated exactly this: internal differences have faded in the face of a common crisis, revealing a deeper, collective strength. Hostile forces may have hoped to exploit these divisions to weaken national institutions, but the people’s unity has proven them wrong. This gives the people an opportunity to bridge the gap and the state should capitalize the moment to discuss the unresolved issues that are political and social in nature. The editorial argued that New Delhi’s decision to suspend the Indus Waters Treaty demands a firm response. The Modi government’s increasingly aggressive rhetoric must be challenged on diplomatic, legal, and political fronts before it escalates further. While irrational in nature, the intent behind these provocations appears clear—Pakistan must remain focused and united in defending its national interests across all domains. (”Defiant unity,” Dawn, 2 May 2025)
ECONOMY
Irsa revisits Kharif allocations as water shortfall eases
On May 2, Dawn reported that the Indus River System Authority (IRSA) has initiated a strategic reassessment of Kharif water allocations following a substantial rise in reservoir storage from nearly zero on April 1 to 1.762 million acre-feet (MAF), with Mangla and Tarbela dams showing marked improvement. Primarily, IRSA’s advisory committee had projected a severe 43 percent shortage, limiting provincial allocations for essential drinking water and delaying agricultural activity, especially cotton sowing. However, with improved inflows and storage levels up from 1.3 MAF on April 20, the estimated shortage has dropped to 25–27 per cent. In light of this, IRSA has revised provincial water shares upward, with final approval expected on 5 May. A high-level meeting involving officials from WAPDA, the Federal Flood Commission, and provincial irrigation departments was convened to finalize the “Anticipated Water Availability Criteria” and ensure equitable water distribution amid evolving hydrological conditions. (Khaleeq Kiani, “Irsa to finalise Kharif water allocation as river inflows improve,” Dawn, 2 May 2025).
With exports falling and investment lagging, Pakistan’s economy needs a strategic reset: State of the Economy Report 2024-25
On May 2, Dawn reported the findings of the State Bank of Pakistan’s half-yearly State of the Economy 2024–25 Reports, which painted a concerning picture of Pakistan’s economic structure and long-term vulnerabilities. The central bank noted that the economy has been trapped in persistent boom-bust cycles for over five decades, typically marked by three to six years of moderate to high growth followed by crises particularly balance of payments emergencies that demand immediate and often painful stabilization measures. The report also underscored that while Pakistan’s average annual labor productivity growth measured as GDP per worker rose by about 1.0 percentage point over the last two decades compared to the previous decade, it still remains significantly below that of peer economies, particularly those classified as lower-middle-income countries (LMICs). Moreover, labor quality contributed only 21per cent to productivity gains between 2000 and 2022, far behind the 61per cent contribution observed in ASEAN economies. The macroeconomic consequences of weak competitiveness are further reflected in declining export-to-GDP ratios and chronically low Foreign Direct Investment (FDI), while micro-level inefficiencies manifest in poor product quality, high production costs, limited innovation, and the absence of globally recognized brands. The report strongly criticized Pakistan’s reliance on short-term fixes such as exchange rate under-valuation, donor dependence, and protectionist policies which have failed to produce enduring growth. Dawn concluded that without sweeping structural reforms to improve productivity, diversify exports, and integration more fully into global value chains, Pakistan’s economic resilience and long-term growth potential will remain severely constrained. (Shahid Iqbal, “With exports, FDI on the wane, economic productivity takes a hit,” Dawn, 2 May 2025).
New AI Faceless Operations to streamline Pakistan’s cross-border trade
On May 2, Dawn reported that Pakistani tech company Galaxefi has launched a new AI-powered Faceless Operations system in Islamabad to improve cross-border trade. The system will replace outdated, paper-based methods that cause around USD 36 billion in yearly losses and put nearly 3 million jobs at risk. .It features a multi-lingual virtual assistant that allows users to handle shipments easily using voice or chat commands automating tasks like filling out forms, generating customs documents, tracking cargo, and sending real-time alerts. It is stated that the system runs without human help, making it perfect for round-the-clock logistics support. It is especially useful for small businesses and logistics companies during busy times, helping them operate smoothly without needing to hire more staff. (Kalbe Ali, “AI system for cross-border trade,” Dawn, 2 May 2025)
Trade gap with Middle East widens beyond USD 10 billion mark
On May 2, Dawn reported that Pakistan’s trade deficit with the Middle Eastern countries has widened by 10.11 per cent, reaching USD 10.502 billion during the first nine months of FY25, up from USD 9.538 billion in the same period last year. According to the State Bank of Pakistan data, this was primarily driven by increased petroleum imports. . The rise in crude oil imports has gone up by 14.61per cent in quantity during the first eight months and has pushed up petroleum consumption this fiscal year. Earlier in 2024, the trade gap had narrowed by 20.47 per cent to USD 13.014 billion from USD 16.365 billion due to reduced petroleum imports amid higher local prices. The current trend, however, reflects renewed pressure. Exports to the Middle East rose slightly by 4.47 per cent to USD 2.381 billion from USD 2.279 billion year-on-year in July-March, while imports grew by 9.02 per cent to USD 12.883 billion from USD 11.817 billion. A recently signed free trade agreement with the Gulf Cooperation Council states aims to reduce the imbalance, as demand for Pakistani exports rose in the UAE, Saudi Arabia, and Qatar. Exports to Saudi Arabia increased 6.95 per cent to USD 552.26 million in July-March from USD 516.34 million, and had surged 40.98 per cent to USD 710.335 million in FY24 from USD 503.851 million in FY23, while imports from the kingdom fell 15.15 per cent to USD 2.828 billion from USD 3.333 billion during the same nine-month period. In FY24, imports from Saudi Arabia edged down 0.01per cent to USD 4.49 billion from USD 4.50 billion. Exports to the UAE rose by 8.27 per cent to USD 1.610 billion in July-March from USD 1.487 billion, and had jumped 41.15 per cent in FY24 to USD 2.082 billion from USD 1.475 billion, largely due to stronger shipments to Dubai. (Mubarak Zeb Khan, “Trade deficit with Middle East crosses $10bn,” Dawn, 2 May 2025)
High-cost power projects terminated
On May 2, Dawn outlined that the government has scrapped around 7,960 megawatts of proposed power projects and the rescheduled7,000 MW of “previously committed plants” from the revised 10-year Integrated Generation Capacity Expansion Plan (IGCEP) 2025-34. This is expected to save around PKR 4.743 trillion (USD 17 billion) over their “operational lifespan.” Approved by Prime Minister Shehbaz Sharif for submission to Nepra, the revised IGCEP involves an investment of USD 47.4 billion over the next ten years, down from the earlier USD 64.3 billion. He has also directed priority completion of the Diamer-Bhasha Dam for irrigation and power generation. Power Minister Sardar Awais Leghari said that of the 15,000MW previously planned, 7,000MW of expensive power capacity is being scrapped. He stated that USD 10 billion was saved by adjusting committed capacity timelines, and USD 7 billion through rationalizing the capacity portfolio. He added the government will no longer purchase generation capacity, ending the single-buyer system, and future additions will be based on a competitive market with no cost-plus tariff. The IGCEP 2024-34, submitted in April 2024, drew scrutiny amid falling electricity demand, rising net metering, and excessive committed capacity. Of the proposed 25,973MW additions, 25,573MW (98.5per cent) were committed and only 400MW (1.5 per cent) were candidate capacity. The remaining 14,984MW were reassessed, and only 7,017MW met criteria such as financial closure or over 10 per cent construction and financial progress, while the rest were evaluated under a least-cost optimization framework, saving an additional PKR 1.015 trillion compared to the business-as-usual scenario. (Khaleeq Kiani, “Govt scraps costly power projects,” Dawn, 2 May 2025)
National Conference on Labor Day organized by NIRC
On May 2, The News International reported that a national conference was held in Islamabad on Labor Day, organized by the National Industrial Relations Commission (NIRC) in collaboration with the International Labor Organization (ILO), highlighted the urgent need for stronger dialogue between the government, employers, and workers to ensure industrial peace and inclusive economic development. Under the theme “Workers and Employers: Navigating Change Through Social Dialogue,” participants including government officials, employer federations, workers’ unions, civil society, and legal experts emphasized that labor is not a commodity and that all workers deserve dignity and decent working conditions. A key resolution, presented by Justice (retd) Shaukat Aziz Siddiqui, called for strengthening labor departments, aligning laws with international standards, and establishing a National Tripartite Forum to address emerging challenges like automation and climate change. The resolution also advocated integrating social dialogue into economic and industrial policies, boosting skills training, and ensuring better enforcement of labor protections. Justice Jamal Khan Mandokhail voiced concern over the hazardous conditions faced by mine workers, particularly in Balochistan and Khyber Pakhtunkhwa, and urged the government to formally recognize mining as an industry. He underlined the constitutional guarantee of equality and workers’ rights and stressed that justice must be rooted in fairness and devoid of fear or pressure. The conference featured thought-provoking speeches, technical sessions, and two robust panel discussions focused on “Industrial Harmony and Social Dialogue” and “Redressal of Grievances under IRA 2012: The Way Forward to Speedy Justice and Harmonious Relations.” It also stressed the need for shifting from litigation to alternative dispute resolution and fostering a culture of mutual respect and shared responsibility. Federal ministers reaffirmed the government's commitment to protecting labor rights and modernizing the industrial legal framework. Participants unanimously agreed that inclusive tripartite dialogue is key to sustainable industrial growth and economic resilience. (Myra Imran, “Dialogue between govt, employer, and worker key to Industrial Growth,” The News International, 2 May 2025)
EXTERNAL
Pakistan-Bangladesh deepen bilateral trade ties with three key textile MoUs
On 2 May, The News International reported that a Pakistani trade delegation— including Deputy Director of the Trade Development Authority of Pakistan (TDAP) Hasnain Azhar, and other senior representatives of the textile sector—concluded a week-long visit to Bangladesh. It led to the signing of three major memorandums of understanding (MoUs): the Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA) formalized agreements with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Textile Mills Association (BTMA), while the Pakistan Hosiery Manufacturers Association (PHMA) signed a MoU with the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). Over 250 business-to-business (B2B) meetings were facilitated, confirming yarn and fabric orders worth USD 2.5 million. Sample orders valued at an additional USD 10 million are pending approval, indicating strong potential for future trade. The Bangladesh Export Promotion Bureau (EPB) expressed interest in a MoU with TDAP, and the Bangladesh Garment Buying House Association (BGBA) signaled plans to explore opening an office in Pakistan. The visit marks a key step in strengthening bilateral trade relations, underscoring mutual commitment to deepening economic collaboration between the two nations. (“Textile delegation strengthens trade ties with Bangladesh,” The News International, 2 May 2025).