Continued Struggles in Pakistan

April 22, 2014

With around 200 million citizens, Pakistan remains an unstable nation that has yet to figure out how to accomplish some of its basic governmental functions.

Islamabad continues to see long lines of angry and frustrated motorists, parked along the edge of Islamabad’s tree-lined avenues, waiting for hours to refuel their vehicles.

Islamabad

About 10 years ago, Pakistan’s government started encouraging people to use CNG,or compressed natural gas. It wanted to cut the country’s hefty bill for imported oil and use Pakistan’s domestic gas reserves instead. CNG has the added benefit of being cleaner and cheaper than regular gasoline. At first, the plan was a huge success.

As industry and the public competed for energy amid massive and unrelenting power outages, demand for natural gas soared. A court ruled CNG retailers were making excessive profits and ordered a cap on prices, causing hundreds of CNG suppliers to close down. Separatist insurgents in Pakistan’s Baluchistan province — where a lot of the gas comes from — regularly bomb the pipelines. CNG has become a nightmare for the Pakistan government.

To compound the matter, as Pakistan has become more integrated, its provinces outside Islamabad have assumed a greater share of federal resources. In order for Pakistan to grow its economy, these provinces must now improve their own fiscal performances in relation to Pakistan’s national fiscal outcome.

Pakistan has experienced high fiscal deficits and very limited inflows of foreign currency during the past two years. This has resulted in short-term domestic borrowing and soaring debt servicing costs.

The latest International Monetary Fund figures show Pakistan is unlikely to be able to make a dent in paying off its debts, and Islamabad last week borrowed $2 billion only by accepting excessive interest rates.

Fiscal discipline has eroded in the Pakistani government in recent years. The government has particularly struggled with its continued financing needs for expanding energy sector subsidies, power theft, rising losses incurred by state-owned enterprises, and high expenditures for security.

Islamabad long ago adapted to attacks by Islamist militants by setting up roadblocks, and by turning its government buildings, five-star hotels, villas, and diplomatic enclaves into modern-day fortresses—wrapped in razor wire and blast barriers and monitored by a multitude of security cameras and armed guards.

Yet outside of Islamabad, Pakistan’s provinces remain dangerous ground. The Pakistani Taliban said earlier this month that they will not renew a ceasefire they called for at the beginning of March to facilitate peace negotiations.

Pakistani Prime Minister Nawaz Sharif came to power last year vowing to end the violence through negotiations instead of military operations. The militant group announced a one-month ceasefire on March 1, and then extended it for another 10 days. According to a report from the Pak Institute for Peace Studies, the number of terrorist attacks fell in Khyber Paktunkhwa province and in the tribal regions during March — both areas that have been sites of numerous militant attacks.

The two sides held one round of direct talks on March 26, and on the following Sunday, Minister of Interior Chaudhry Nisar Ali Khan struck an upbeat note, saying that comprehensive talks with the Pakistani Taliban were expected to start in days. He said the government was releasing about 30 prisoners requested by the Pakistani Taliban to facilitate the process.

But the announcement of the ceasefire’s end undercut the government’s position, and it left Taliban supporters scrambling to understand what it meant.

The first casualties from the end of the ceasefire occurred last night when at least nine people, including five police officers, were killed and more than 30 were wounded in two attacks in northeast Pakistan.

Officials said militants ambushed a police patrol in Bhadbare, on the outskirts of the provincial capital of Peshawar, late Monday night. Two members of the police were originally wounded, and when other officers arrived at the site to retrieve them, the attackers struck again. In the other incident, three people were killed and 30 wounded when a bomb exploded in a congested bazaar in the town of Charsadda, east of Peshawar.

Reports indicate that the militants have become frustrated because the government has had little to offer them. Muhammad Ibrahim, who has been representing the Pakistani Taliban in the talks, blamed the government for not listening to their demands.

Achieving fiscal sustainability and national security has been a major recurring challenge for Pakistan’s policymakers; however, Pakistan’s safety challenges are in no way limited to terrorism.

Pakistan has one of the world’s worst records for fatal traffic accidents. Tahir Khan, superintendent of the National Highway and Motorway Police, said that every year, 12,000 to 15,000 people die in crashes in Pakistan, mainly because of poor roads, badly maintained vehicles, and reckless driving.

Last month, at least 33 people were killed in a multivehicle collision along a coastal highway in southwestern Baluchistan Province.

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One Response to “Continued Struggles in Pakistan”

  1. Brian fontes said

    I always enjoy reading your blogs. I find them informative and you always seem to present information, e.g, traffic deaths, aspects of the cease fire that the average news reader/listener did not know. Thanks. Brian

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