Volume 22 Issue 3, March 2018
By Syed Tariq Husain

The sorry tale of circular debt is a legacy of vested interests circumventing the chain of oil purchases, power generation and power distribution and, as a result, burdening taxpayers and consumers with inefficiencies of managing the problem.

By Shahab Nafees

We have seen this before. Pakistan's mismanaged power sector is once again faced with a circular debt of more than Rs500 billion. When the current government came to power in June 2013, it cleared a circular debt of Rs480 billion accumulated owing to high losses and shortfall in recovery.

Some independent power producers (IPPs) and oil companies say they are on the verge of default as the government has failed to pay their dues.
The situation is going to have serious consequences for the government as it plans to increase power generation capacity in the coming years.

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Syed Jawaid Iqbal

Zeba Jawaid

Javed Ansari

Faizan Usmani
Khawaja Amer
Syeda Areeba Rasheed

S. G. Jilanee

Ahmed Affan
Arsla Jawaid
Dr. Ikramul Haq
Dr. Moonis Ahmar
Dr. Muhammad Ali Ehsan
Dr. Raza Khan
Faizan Usmani
Huzaima Bukhari
Khawaja Amer
Mirza Aqeel Baig
Muhammad Omar Iftikhar
Mujtaba Baig
S.G. Jilanee
Shahab Nafees
S. M. Hali
S. Mubashir Noor
Soha Sheikh
S.R.H. Hashmi
Syeda Areeba Rasheed
Syeda Izma
Syed Tariq Husain
Taha Kehar
Taj M Khattak
Ulfat Amer

Neha Ansari

Kamran Ghulam Nabi
Haroon Rasheed
Riaz Masih


Syed Ovais Akhtar

Aqam-ud-Din Khan

SouthAsia is published every month by Syed Jawaid Iqbal for and on behalf of JAWZ Communications (Pvt.) Ltd.

Views expressed by the contributors are not necessarily shared by the editors.

Published since 1977 as Thirdworld, the magazine was re-launched in 1997 as SouthAsia.



By Ahmed Affan

It took five years the world of national economy’s circular debt segment to come full circle. Having been cleared amid much fanfare and photo-ops, the circular debt was worth just under Rs500 billion back in June 2013. The hydra-headed monster of circular debt is alive and kicking again at an over Rs500 billion mark. It does not take rocket science to know that till we get rid of this circular oddity, there is little chance of making any linear progress.

Though the final decision to put Pakistan back on the Financial Action Task Force (FATF) ‘grey list’ was put on hold in the recently concluded preliminary session held in Paris, the sword is still hanging on Pakistan’s head. The reports coming from Washington are a bit too disturbing which say that Pakistan may find itself on the blacklist if it fails to come out with a convincing plan to eradicate terrorist financing by June. The list so far announced includes nine countries; Ethiopia, Yemen, Iraq, Syria, Serbia, Sri Lanka, Trinidad and Tabago, Vanuatu and Tunisia, while Bosnia and Herzegovina have been moved to the white list.

Unfortunately, the chances of Islamabad’s inclusion in the ‘grey list’ in June seem to be almost certain after the US successfully persuaded China and Saudi Arabia to drop their opposition to the motion. A post on the official website of FATF indicates that Pakistan has apparently survived the attempt to put it on the watchlist that could have had serious economic implications for the country. Pakistan earlier spent three years on the grey list between 2012 and 2015. This affected its ability to float international bonds, borrow from multilateral bodies, receive or send remittances or conduct international trade.

The recommendation that Pakistan be put on the ‘grey list’ was tabled jointly by the US and the UK, with France and Germany joining later. These countries accused Pakistan of not taking any action against some entities and individuals designated as terrorists by the UN Security Council Resolution 1267. Their main concern was about Jamaat-ud-Dawa and Falah-i-Insaniyat Foundation being allowed to operate in the country and Hafiz Saeed being free to organize fund-raising rallies.

It is encouraging to note that Turkey, despite US pressure, did not change its stance and was the only country left opposing the motion. But, under FATF rules, one country’s opposition is not enough to prevent a motion from being accepted. The Pakistan government remained silent on the matter while the Indian media continued to say that Pakistan had indeed been grey-listed though the fact was that the country had earned a three-month reprieve. But then, will Pakistan be able to come out with a convincing report that it is not involved in terrorist financing in the absence of a full-time finance minister? Though Finance Advisor Miftah Ismail attended the Paris meeting, he was not in a position to effectively defend the accusation that Pakistan is involved in terrorist financing.

Keeping in view the consensus of 35 members and two observers of FATF, with the only exception being Turkey, Pakistan’s National Action Plan must now be revisited and appropriate measures taken to satisfy FATF. In all probability, in June Pakistan will be included in the ‘grey list’ by FATF if the country fails to take the required measures. The government also needs to work with FATF to develop an “action plan” to plug the deficiencies identified by the watchdog. Such an action plan will be put up for approval by consensus in the FATF June session. If Pakistan fails to build consensus on an action plan, it stands the possibility of being blacklisted this time. This is a status that is currently given only to Iran and North Korea.
Days before the FATF meeting, Pakistan had taken important policy decisions by amending its anti-terror legislation through a presidential ordinance. This included all UN-listed individuals and groups in the national listing of proscribed outfits and persons. Similarly, an announcement was made to deploy troops in Saudi Arabia to meet a key demand of the kingdom in an effort to win the crucial Gulf Cooperation Council vote at the FATF. The diplomatic outreach was commenced to foil the Western bid believed to have been made at India’s behest. A report of actions taken by the Pakistan government to comply with FATF requirements was also presented at the Paris plenary.

It needs to be understood that decision-making in diplomacy requires proper homework and deliberations and, above all, proper timing. Afterthoughts and ‘knee-jerk” actions never work. For practitioners of diplomacy, successful strategy is less a matter of substance than a problem of perfect timing. So-called ‘ripe moments’ are crucial periods in which antagonists recognize that talking, not fighting, advances their goals. Had there been a regular foreign minister over the last few years in Pakistan and regular meetings of the National Action Plan Committee had been held to monitor the results of the action plan, things would not have been so bad. However, between now and June Pakistan has still time to come out with an Action Plan convincing enough to avoid the move to get blacklisted but then it must act swiftly and decide what steps it needs to achieve particular goals that improve its status in international eyes and successfully communicate its position as a state that does not support terror-financing.

Syed Jawaid Iqbal
Editor in Chief


Directionless Shiv Sena

The Bharatiya Janata Party (BJP) and Shiv Sena follow the same religious and political ideologies based on the superiority of Hindutva as the theoretical base for running India, a country with a significant presence of other religious groups. However, the Shiv Sena has been always reluctant to form a political alliance with the BJP that looks desperate to extend its power in both the federal and provincial setups in the next general elections. So far, the Shiv Sena’s political future looks hanging in the balance as it has yet to choose the path to achieve its long-term objectives, which amount to nothing but the rise of Hindutva philosophy as a consensus-based state policy over the other religious and secular beliefs followed in today’s India. Despite huge popularity and influence over the general people, the Sena is in search of its real direction and is left alone as a result of its own indecisiveness.

S. Rajendran Chandran,
Ranchi, India.

Feeding the Future

Despite its small size in terms of area and population, Bhutan has made significant progress, particularly when it comes to the socio-economic welfare of its people. Though the country cannot be referred to as truly a welfare state at the moment, however, it has been taking a number of initiatives that aim at improving the lives of its people and children in particular. Launched by the Bhutanese government a few years before with the support of the UN’s World Food Programme (WFP), the National School Feeding Programme (NSFP) is one of those initiatives that stand out as an example for the rest of the South Asian nations. Through the NSFP programme, primary and secondary schoolchildren in Bhutan are provided daily meals to help them meet their nutritional needs and also to encourage the overall school enrolment and educational attainment rates. I appeal to other countries in the region to follow suit and help their children become educated and healthy citizens.

Kamal Nath,
Varanasi, India.



Rise of Judicial Intervention

This is with reference to last month’s cover story on judicial intervention in the running of state affairs. Though judicial activism in Pakistan is at its peak in the current situation, however, the way the judiciary is in such a haste to set state matters right without getting its own house in order, makes the pumped-up activism a vacuous exercise. To be very honest, people of the country seem to be losing their confidence in the current judicial system that has hundreds and thousands of cases pending for years and still there is no hope of any betterment or positive change. In fact, a collective effort is required to set things right in all departments of the state as the rise of judicial intervention in government policies and controls would gradually put all pillars of the state in confrontation with each other, which would ultimately lead the nation to further chaos.

Syed Mukthar Ahmed,
Karachi, Pakistan.

Rohingya Repatriation

In January, Bangladesh and Myanmar signed an agreement with regard to the repatriation of the Rohingya refugees. As per the agreement, Myanmar will take back its deported citizens from Bangladesh within an agreed period. However, the chances of the agreement’s implementation are low, considering the track record of the Myanmar government. The most oppressed Muslim minority today, the Rohingya have been subject to state persecution in Myanmar for more than a decade and it raises many doubts whether the Myanmar government would stick to the agreement by fully addressing the concerns of the Rohingyas in the given timeframe. It looks like the international community as well as the UN, is not paying that much attention to the Rohingya and has left them at the mercy of those who consider them not more than a burden on their land due to their religious and ethnic background.

Sadia Jaleel,
Dhaka, Bangladesh.

Solar Afghanistan

Similar to other South Asian countries, Afghanistan is suffering from acute energy shortage and power crisis owing to poor governance, a lack of long-term planning and mismanagement of allocated resources. In terms of the country’s capacity to generate electricity through solar energy, Afghanistan has a huge potential and could even emerge as a solar powerhouse in the region, otherwise known for protracted electricity load-shedding and substantial power shortages in both the domestic and industrial sectors. Recently, the Asian Development Bank (ADB) has approved a $44.76 million grant to finance the construction of a 20-megawatt on-grid solar photovoltaic plant in Afghanistan, which is no doubt good news for the energy-starved country. If completed on time, it could help Afghanistan become energy sufficient and will also reduce its dependence on conventional geothermal-based power generation means.

Ahmed Hassan,
Kabul, Afghanistan.

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