The Financial Daily : 2020-09-05

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Saturday- Sunday, September 5- 6, 2020 Inflation in July and August Editor- in- Chief: Azfar Ashary Executive Editor: Manzar Naqvi Editor: Agha Masood Hussain Resident Editor ( Islamabad): Munawar Naqvi Editor- at- Large: Mohammed Arifeen P akistan Bureau of Statistics released data for week ending 20 August 2020 substantia­ting the opinion amongst households that the inflationa­ry twist continues unceasing in the country the Sensitive Price Index increased by 0.96 percent in comparison to the week before with year on year increase of 8.50 percent. The government gives the rise in prices to two reasons. This includes not only seasonal changes in the price of perishable­s due to supply and demand changes but also the creation of cartels operating in those commoditie­s. The investigat­ion reports on sugar and wheat finalized what was well known in any case primarily the presence of cartels; but, agonizingl­y the rise in the prices of these wheat and sugar continues in spite of the government's threats it will deal with the sugar and wheat ' mafia' followed by its decision to subsidize their sale in Utility Stores Corporatio­n and import to meet the deficit and contain the escalating domestic price. The rise in prices is owing to the rupee depreciati­on that is crashing on the rupee value of imports and also locally produced goods. The harmful impact of the rupee depreciati­on has been on electricit­y tariff as its largest input, fuel, is imported whose price has been regularly rising in the internatio­nal market. The power sector is one of the most inefficien­tly- run sectors as the circular debt is at present in excess of 2 trillion rupees. The performanc­e of the power sector has been a source of worries for both domestic and internatio­nal developmen­t partners for years and following administra­tions. Electricit­y is a large input for the manufactur­ing sector while a rise in fuel costs raise the cost of transport of goods thus any rise in the price of electricit­y and fuel feeds into the inflationa­ry rise. Ending 20 August 2020, electricit­y charges rose to 9.73 percent. It is hoped that the government introduces its power and tax sector reforms as per its pledge to Internatio­nal Monetary Fund which would comfort some of the pressure on prices. The prices of necessary food items across the country increased in July following a decline in production and an increase in petroleum prices. The Consumer Price Index based monthly inflation increased to 9.3 per cent on Yearon- Year basis in July 2020, from 8.6 per cent during June 2020. The outbreak of the Covid- 19 pandemic has reduced consumer demand putting downward pressure on commodity prices. The risks of supply disengagem­ent and the lower production of sugar and wheat have contribute­d towards an increase in food inflation in the last few months. Further the government has increased prices of petroleum products significan­tly, resulting an increase in nonfood inflation. Inflation based on the CPI moved to the top in the first month of the new financial year largely due to high increase in the domestic prices of petroleum products succeeded by the rise in prices of wheat, vegetables and other eatables. In the month of July 2019, the price increased by 8.4 percent. Price of wheat climbed by 28.5 percent in July 2020 compared to June 2020. Likewise the price of wheat flour increased by 18.5 percent and the price of wheat products jumped by 16 percent compared to June 2020. An increase of 17 per cent was also noted in the retail price of sugar across the country during the month under review. The average CPI inflation between July- June fiscal year rose to 10.74 percent, which is the maximum since fiscal year 2011- 12 when it stood at 11.01 percent. The year 2020 was the deteriorat­ing year as it touched highest inflation in the world compelling policy makers to increase interest rate. The SBP increased interest rates to calm down the inflationa­ry pressure during the fiscal year but high rates proved ineffectiv­e as they further increased inflation while the private sector halted borrowing costly money obstructin­g industrial growth and services. January showed 12- year high inflation at 14.6 percent. In response to the rising prices, the SBP increase the interest rates to 13.25 percent. With the appearance of coronaviru­s, the whole economic scenario was down as demand lessening lowered inflation compelling the SBP to reduce interest rates to 5.25 percent within just three months. The rate diminishin­g announceme­nt came as inflation slowed down, falling to 8.2percent in May, much lower than the SBP projection for the month. SBP's Inflation Monitor describe Pakistan's inflation, when compared to developing economies like China, Thailand, India, Bangladesh and Sri Lanka, has fallen since the pandemic. The July- May inflation for the current fiscal year declined below to the State Bank's earlier prediction of 11 percent to 10.94 percent. The number is anticipate­d to drop further in June. The government has lessened petroleum prices three times during the two months, which extraordin­arily reduced the cost of production, transporta­tion and ultimately reduced inflation. Industrial­ist appealed to the government to bring down the interest rate lower than 5.25 percent to encourage economic activities. Trade and industrial sectors, demanded decline in interest rate, also think that the economy requires additional supply of Rs3- 4 trillion for complete recovery. With increase economic slowdown, the revenue collection has also declined short of target this year making increase liquidity supply on such a large scale unfeasible for the government. The SBP has given relief amounting to hundreds of billions in the shape of principal payments deferrals, debts postponeme­nt and lending on easier terms for industrial sector to shun extensive discharge. Honorary Advisory Board Tariq Iqbal Khan, FCA Amir Abbas Ashary Sikandar Ali Shah Nuzaira Azam ( U. S. A) Asim Abbas Ashary, CPA Shiraz Ahmed Siddiqui Dr. A. Hadi Shahid, FCA Mubasher Mir M. Zaheer Quindeel Syed Ibne Hassan Head office 111- C, Jami Commercial Street 11, Phase VII, DHA Karachi Telephone: 92- 21- 35311893- 6 Fax: 92- 21- 35388428 URL: www. thefinanci­aldaily. com Email Address: editor@ thefinanci­aldaily. com Lahore office 24- Peshawar Block, Fortress Stadium, Lahore Telephone: 92- 42- 6675595 Fax: 92- 42- 6664349 Email Address: editor@ thefinanci­aldaily. com Disclaimer: All reports and recommenda­tions have been prepared for your informatio­n only. Summary and Analysis are not recom mendation to buy or sell. This informatio­n should only be used by investors who are aware of the risk inherent in securitie s trading. The facts , informatio­n, data, indicators and charts presented have b een obtained from s ources believed to be reliable, but their accuracy and completene­ss cannot be guaranteed. The Financial Daily Internatio­nal and its employees are not responsibl­e for any loss arising from use of these reports and re commendati­ons. The unending war space to go in to details of battle but Pakistan stemmed the tide and india was contained in Bridge Head , but India occupied around 459 Sq K Mtr. Pakistan's counter attack was in progress when cease fire occurred. But Chawinda will be remembered for exemplary courage of rank and fi le. Pakistan lost around 96 tanks India over 140, though they claim much less , 24, numbers. In Command , names of Maj Gen Tikka, Brigadier Ali and Brigadier Amjad are shining figures who stood like a rock after initia l setback . In Air , Pakistan Air Force had not only thwarted Indian attack in Lahore sector but by 9 Sep , it had complete superiorit­y of air. There were fierce air battles in the annuals of ai r warfare. Pakistan navy i n spite of small in number attacked Dwarka and kept Indian navy contained in Bombay harbour. Criti cal analysis, the war started on Kashmir and Kashmir problem still persist. India failed t o achieve its aim and this can be termed defeated. In military terminolog­y not achieving the set aim i s meant defeat Pakistan set its objectives in Chamb Sector and later in Kasur Sector beyond it's capability. In overall analysis Jawans and young officers performanc­e has been acclaimed by military critics . Whereas in East Pakistan there were no major action but it exposed Pakistan's vulnerabil­ity in this part . India realised head on it will be difficult to defeat Pakistan thus it was planned t o subvert people and politician­s in East Pakistan . Exploit economic and political non representa­tion of East Pakistan . Thus we see Agartala Conspiracy and later penetratio­n in judiciary , Education and even Rank and File of East Pakistan Origin. In this polluted social politico milieu East Pakistan election proved t o be water shed and what followed is history . Later Kargil and Indian mischief continues in the form of subversion, sabotage , water t hreats , creation and support of TTP , support to terrorists, and pressures t hrough internatio­nal organisat ions blaming Pakistan of terror support . Pakistan now face ent ire ly changed situation i n Kashmir and region , opposition of CPEC and constant support to elements who abet to destabilis­e Pakistan. Pakist an is in the grip of 5th Generation war which has entirely different contours than 1965 and 1971. The war is now going on i n tactical , strategic and Elect ronic spectrum. Never t he less today's Pakistan with strong convention­al and strategic assets is a much stronger country in the community of Nations. It knows how to defend it . What we need is the resolve we displayed i n 1965 war when nation was like a wall The 1965 war, in all different manifestat­ions is stil l on and conti nuing and Pakistan after 1962. This was destined to fail. This was another betrayal and follow up parlays also faile d. Frustrated, operation Gibraltar was planned to cash uprising within Kashmir. It did not succeed as people support was missing due to wrong assumption­s and draconian Indian measures. It was coordinate­d with Pakistan's attack in Chamb Sector. The attack was well planned was a success and Pakistan army having crossed Tavi river was successful­ly moving forward to cut of Jammu Srinagar road. Again typical Pakistani inner politics played its role and Force Command General Akhtar was changed General Yahya was given command, by Ayub, who was aspiring t o go up in la dder. While the attack was progressin­g well, change of command was a fatal strategic mistake, it is seldom done except under exceptiona­l circumstan­ces. The pause which thus occurred during change of command allowed Indians to regain balance. Pakistan lost golden opportunit­y to wrest Kashmir. The price for command decision, we are sti ll paying. Nervous, India declared war and attacked Lahore on two axis, Waghah - Lahore and Badian Lahore Sector. They were confident to capture Lahore and a pre planned BBC news was released that Lahore had fallen to Indian Army. It never happened, enraged and embarrasse­d BBC had no face. Pakistan who had after Sir Creek ceasefire just withdrew to barracks had left Screens and artillery observers in forward positions. When attack came, it were they who quickly alerted the command. I just had fi ni shed a l ight dinner having inspected the unit an hour earlier, in Lahore near Cavalry Ground. It was evening of Sep 6, had pleasant aura in the air which soon was to be full of explosive smells. In t hose days one old type of telephone use to be i n the mess, ours Artillery Mess near RA Bazar. I was informed t o report in the Regt which was nearby. I was asked by Adjutant to move my battery t o Kasur Sector by road. The guns will follow in train to Kasur Station. We moved with complete ammunition and in two hours were camped near Kasur. Guns were to reach in the morning. It was 2AM, Sep 6 shelling from Indian side started. We quickly dispersed. I rushed to Kasur Railway St ation t o find if guns reached. My Guns, Heavy 155mm long range, had arrived but now it was dawn and railway station was under Indian air attack. Lieut ED Noon was trying to unload his tanks. By mid day we were shelling Khem Kiran town in kasur Amritsar road. 10 AM President Ayub addressed the nation and country was at war, a war never anticipate­d but as foll ow up to Chumb attack by Pakistan. India planned t o give a surprise in Lahore Sector. It fail ed and Pakistan responded with full available capabili ty and extreme will power by the nation. In Kasur Sector Ad hoc force under Command Maj Gen Hameed, namely XRay Force now 11 Division, was assembled i n May 1965 consist in g of t hree brigades, 21, 51 and106, artille ry and 15 Lancers, and 32 TDU and some support elements. It was t o defend Badian Kasur Sector against Indians 4 Mountain Divisio n ( 7, 62 Brigades r eser ve 2 I ndependent Armour brigade and Daccan Horse under Command. It also served as Bridge Head to mount Pakistan elite 1st Armour Division to capture Amritsar. The counter attack in Amritsar Sector went in after repulsing Indian attack i n this sector by 4 Mountain Divisi on and Daccan Horse armour element . This was coordinate­d with attack on Lahore. On Pakistan side Bridge Head was made by X Ray Force( now 11Division ). It was launched on night 6/ 7 under heavy artille ry fire. I will not go into details as space do not permit. But Bridge Head Area across Rohi Nullah was not suitable . Many a t anks got bogged down due to soggy soil , further area was inundated by Indians . The bridge head crossing got blocked when a t ank got stuck . It was removed in an hour but this crucial time gap gave Indian a chance to regroup and make defence in the shape of tank pill boxes. My guns had the honour to support these fierce encounters short of Khem Kiran. The task given to Ist Armour Divisi on was to cut Jhullunder Amritsar road ( about 100 miles) . In nutshell Pakistan not only managed to repulse Indians and then also launch counter attack , Pakistani Armour punch was able to capture area up and beyound Asal Uttar . But there was shortage of infantry to occupy area seized . There were heavy losses in ta nks on both side. Pakistan being attacker suffered more, tank parity more or less was 1.44vs1. There were some very brave action by officers and men . Pakistan lost Brig Shami and many brave officers and men . Ferozpore Radar was plying guidance to IAF but PAF faile d to damage it being si tuated in the centre of city. I was asked to study if we could do it with precision artillery fi re. We found we could do it if we ta ke guns right up t o zero point. I di scussed it with Commander Artillery , Col Shoukat Raza, later Maj Gen . He approved my plan . On night Sep 8 , I took my four 155 guns to zero point near Qaiser Hind in area where 12 Ba l uc h Bat t ali on was de pl oyed i n def ence on Ferozpore Road. I fired around 400 shells on Radar Site. It was destroyed and after Sep 9 , PAF had attained complete supremacy in Pakistan Artillery was honoured by PAF chief through letter of appreciati­on . With Fi erce battles i n Asal Utter iIndia attacked i n Sialkot Sector with its elite armour strength , whereas there were only infantry with an Armour Regiment . They fought valiantly but had to readjust by yielding space. Pakistan counter att ack ed with 6 Armour Division . On Pakistan side there were 132 tanks whereas India had pushed all its might over 400 tanks . There was virtually 2.5 to 1 superiorit­y. Later tanks , 150 tanks of 1st Armour Division were shifted from Kasur Sector . Thus there were around 270 tanks on Pakistan side. History's greatest battle was fought at Chawinda after battle of Kirusk in WW2. There is no T his i s the day to celebrate and to reckon with. This is the day Pakistan achieved complete victory over India. It is the day we thwarted India's ambition to capture Lahore in a day and make Pakistan a hostage. Small number of men and officers stood as a rock on Wahga a nd Ba dia n Roa ds , l ef t behind unimaginab­le tales of valour and sacrifice. Pakistan Air Force made a carpet of bombing and destroy ed advancing I ndian columns. Artillery got deployed in no ti me with heavy and medium guns shattered the assembly of forces ready to pounce on Lahore. By evening Indian were lic king their wounds and wave after wave of at tacks by them failed to achieve t heir aim. The second India Pakistan war commenced in the wee hours of Sep 6 1965. The i rony i s, it is st ill going on. It never stopped. To understand we have to examine the genesis of the issue. Pakistan was accepted by Quaid who knew his failing health, the opportunit­y missed Pakistan would never have been created. His comrades were no different then what we have today. Most of them opportunis­ts and switched to Muslim League seeing the tide. The conviction was miss i ng. On t he other s i de Congress debated, by allowing truncated Pakistan they expected it to fail within six months. It is interestin­g to read the debates i n Congress CEC meetings held in early 1947 and final acceptance of partition plan in July. Quaid and Maharaja of Kashmir had entered in to a standstill agreement. Due to conspiraci­es of Congress Maharaja resiled. On this Kashmiri youth and ex soldiers rebelled i n Kashmir and Gilgit Baltistan. GB was liberat ed by valiant soldiers and people of GB and in Kashmir, Kashmiri and Mujahideen reached up to Srinagar AirPort. In desperatio­n Maharaja sought Indian Government help. India conditione­d Maharaja to sign accession and he was fl own to Delhi. Thus Indian army moved in. Quaid rejected this agreement as Stand Still agreement was already signed and in place. On Pakistan side when Quaid asked C in C Gracy to move troops, he refused. It was only when Gracy was changed Pakistan Army could move in. Meanwhile Tribal Laskers started gathering and also moved in. Nehru fearing l oss of Srinagar rushed to Security Council and thus Cease Fire took place. A palbicitde was t o be held which never happened, typical of Hindu mentality and t hus struggle goes on till t oday. In 1962 as a follow up when India got beating from Chinese , on US interventi­on Pakistan stayed away to move in to Kashmir. There were talks between India Brig. Tariq Khalil The writer is a retired Brigadier, decorated in 1965- 71 wars with SJ, SI ( M), IS Gallantry ( BAR). Is Secretary General Pakistan Russia Business Forum and is a Graduate from NDC. He can be reached at: tariqkhali­l21@ gmail. com Soon to a theatre near you Asha’ar Rehman ball i n his court, Shahbaz sahib was ju st to o overwhelme­d by th e assignment to care about giving t he scene his sign at ure stamp. This t i me t he former chief minister of Punjab, known f or stealing a march over even his most formidable competitor­s, was willi ng to play a cameo role and was allo wed a f ew nostalgi c minutes in t he water i n a ci ty recently i nundated by rain. He couldn't even f ind t ime to give a quick tu to ri al t o someone cro oning Akalay na j aana alth ough, as th e f il m reviewer would have to ld us, it was per fect for t he situ ati on. All t he polite guest d id was t o repeat what his hosts repeatedl y say about th e b ia sed feder al government and i t s cruel policies to star ve Sindh o f funding. There have alr eady been f ar t oo many sl i p- ups by anti- government poli t ic al forces t o i nspire i nstant popular backing. Between Karachi and Lahore, th e opposition cou ld be a fo rerunner of greater hustle in t he near futur e. The country could so on be p assing t hrough a peri od where it would be difficult f or a political party to harbour t houghts of i mmediate par le ys with kingmakers f rom t he establ ishment over unity in t heir ranks. The l atest r ound of monsoon meetings may well result in some kind of f orward- lo oking par tn ership from t he oppositi on's point of view. But th er e have alr eady been far t oo many slip - ups b y anti- government politi cal f orces t o i nspire in stant p opular backing. The mistakes means t hat much more spadework. Perhaps t he opposition parties were always waiti ng f or th e le ss muggy and more relaxed climes of September. If so, t hey didn't need t o honk and beat t he drum of an i mpending people's movement against Pr ime Minister Imran Khan. Ideally, th ey could have used t he i nt erim for a head co unt of th e workers or, if t hat was supposed to be to o br ie f an exercise for some, t rying to convince others t o jo in th em if and when t heir all- powerful l eaders ordered t hem to march for t heir causes. Before Eidul Azha, it was Bilawal Bhutto- Zardari who had announced th at a ' j oint' oppositi on would l aunch a protest campaign ai med at shaking up t he Khan government - af te r Eid. How l ong after, was not discussed but reasonable minds presumed th at t hings would start fall in g i nto place a f ew days after the fest i val. Now i t seems t hat BBZ was guilty of promoting t he prot est movement as t he ultimat e oppositi on action whereas i n reality i t was only half- done. It t ook th e opposition l onger to fi x t hings i n t heir t ent than i t does a greedy Eid meat st ocker t o clean up t he contents of his gi ant- size fr eezer. There was an obvious gulf t hat t he l eadership could not quite rectif y, even with te mporary stuff, t o cr eate a makebeliev­e al l ia nce of groups with a few t hi ngs i n common. This breach must have been bigger th an t he one f aced by jo in t opposition aspirants i n t he past or i t would have been overcome. Alli ances must be harder to str ik e i n t he post- in formation revolution age. Topics to day are f ar more o pe nl y di s cu s se d t ha n pr ev i ou s l y, but wit h t he expanding prism of views, consensus i s often hard er t o achieve. It would be to ugher sti l l in a country where t he batt le ag ai nst old ta boos is far from over. I n fact, i t has only ju st begun. But t i mes are changing and omiss io ns t oday ar e al l th e more glari ng. Like t his current case where a news story, with al l i t s fl aws and questi ons, has been paraded before various oppositi on p arties f or r eacti on, witho ut i nspir i ng too many r emarks in i t i all y. I n t he ol den t i mes i t would have b een possib le f or a j oin t opposition f ront t o i gnore th e i nsinuati ng parallels sought to be drawn between a powerful ex- serviceman's r i se i n t he r anks and t he alleged fast advancemen­t made by b usi ness r un by his f amily members. A Pakistani opposition i n th e past cou l d have tr i ed t o r un an alliance over and ab ove such delic ate points. Today, some kind of reaction i s repeatedly sought and f i nally r ecorded even i f i t ta kes many days of pestering by t he more persistent and th e ever annoying i ndividuals on t h e margins of t he media. Today, a minister feel s co mpelled t o t ell his countr ymen t hat t he person concerned will soon o ff er his version of t he s to r y i n resp onse t o what has been repor t ed. I n t he decades gone by, s il ence would have suff ic ed in such situat i ons. Now, t he minister sah i b apparently had l it t l e choice but to exp ose himself t o fu rt her queries. I t i s t he i ssues which can no l onger be kept out of th e di s course t hat will shap e t he i deolo gy of t he new oppositi on allia nce with t he most s uccessf ul establi shment par ty i n t he histor y of t he country at t he centre of i t. - I n t he good old days, when l ocal fi lmmakers genuinely suspected th at th eir merchandis­e in cl uded objectiona­b le material, t hey would of te n promise t he audience a new r el ease on a certain date ' subject t o clear an ce from t he cen sors'. ' Ba shart- i - censor', said t he familiar Urdu l i ne and t he connoisseu­rs would be l ef t craving a half- awake scrutiny board nodding i t s appr oval. The opposition parties in t he country would have us believe that t hey are not behold en t o anyone cleari ng t he agenda for a protest movement against t he Imran Khan government. Given th is, t he l ong wait for t heir next bi g attr acti on i s something th at the Zardaris, th e Sharifs and th e maulanas could i ll afford. So fr equently has th e promise been made t hat some of th e more knowledgea­ble among th e audience are already callin g i t a scam, t he unpreceden­ted sight of a Sharif wading t hrough Karachi r oads searching fo r some Zardari hosp it ality notwith standi ng. The boots are i n t he water. I t must be wartime. Only t he outcome of all t he nervous energy oozin g from th e opposition stalwarts on eit her side of t he recent deluge doesn't show any encouragin­g signs f or anti- government sympat hi sers so far. The scene where Shahbaz Sharif co mes knocking at t he door of t he PPP l eadership is somewhat different fr om what it was a few weeks ago. Then, in a dry Lahore, Shahbaz sahib was t oo il l to immediatel­y attend t o th e PPP wayfarer, l ooking for some r einfo rcing companions­hip. Now, as someone with th e Courtesy: Dawn PRINTED AND DISTRIBUTE­D BY PRESSREADE­R PressReade­r. com + 1 604 278 4604 O R I G I N A L C O P Y . O R I G I N A L C O P Y . O R I G I N A L C O P Y . O R I G I N A L C O P Y . O R I G I N A L C O P Y . O R I G I N A L C O P Y COPYRIGHT AND PROTECTED BY APPLICABLE LAW

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