US-Nato strikes in Shawal also injured six soldiers

US-Nato strikes in Shawal also injured six soldiers

By our correspondent

PESHAWAR: Six Army soldiers were among the 15 persons who sustained injuries in the bombing and shelling by US-led coalition forces in Shawal valley in North Waziristan last Saturday.This fact wasn’t known or reported until now. But official sources in North Waziristan told The News on Monday that bombs and artillery shells fired from Afghanistan’s territory also hit a joint Pakistan Army and paramilitary Frontier Corps post near the border in Shawal valley. The post was damaged and six soldiers deployed there were injured.Requesting anonymity, a government official said the six wounded soldiers and nine civilians injured in the bombing by US-led coalition warplanes and artillery and mortar shelling were evacuated to Bannu in helicopter and admitted to a military hospital there. Some of the injured were stated to be in critical condition.The cross-border raid by US and Nato forces in the Mana and Mangratay areas of Shawal valley killed about a dozen people, including women and children. Also last Saturday, US-manufactured jet-fighters and Apache helicopters attacked the Tor Jawar village near the border town of Angoor Adda in South Waziristan and killed 21 people, all villagers and including women and children. Almost 40 people were injured in the attack. The Pakistan government ignored the violation of its borders twice that day and didn’t even acknowledge that a Pakistani village had been bombed by US-led coalition aircraft and 21 to 25 people had been killed.

US forces attack Pakistan with jets/helicopters/artillery

Man lost nine members of family in Nato strike; kills himself
By Our Correspondent
WANA, June 24: An elderly man has committed suicide following the death of nine members of his family in the recent Nato bombing in the Mandi Zawar area of the mountainous Shawal region near the Afghan border, local people said.Pikhawar Khan, 70, of the Gangikhel tribe committed suicide when he saw the bodies of nine members of his family, including three women and four children, a journalist of the area associated with a foreign television network told this correspondent during a visit to the area.Quoting local people, he said only one child of Mr Khan’s family survived the bombing by helicopter gunships and aircraft.“First, light-emitting balls were fired which lit up the area. Then machinegun rounds and artillery shells were fired from planes and helicopters, which shook the entire area,” witnesses said. They said a small restaurant was hit by rockets, injuring 11 people.The helicopters fired on the makeshift house of Pikhawar Khan, killing his nine family members.The forest-covered Shawal area is pressed into North and South Waziristan agencies. Many families had shifted to the area for cutting timber after local tribes lifted the ban on forest harvesting.Residents said that after bombing the Zawar area, the helicopters and jets started pounding the nearby Rakha area along the Afghan border in the South Waziristan Agency. Nato and US-led forces started intense shelling on houses in Rakha in which 20 people were killed and scores of others injured.Two of the injured were taken to a hospital in Wana. In the Rakha area, eight houses were hit by rockets and heavy gunfire. Reports say people have started evacuating Mandi Zawar in the North Waziristan Agency as tension has gripped the area.

Pakistan's soldiers 'huddling in their bases' in tribal regions

Pakistan's soldiers 'huddling in their bases' in tribal regions

· Army paralysed by Taliban threat, says ex-CIA agent· Retired officers accused of helping militants Declan Walsh in IslamabadSaturday June 16, 2007The Guardian
The Pakistani army is paralysed by the growing Taliban threat and some retired officers are covertly aiding the militants, according to a former CIA officer.
Soldiers posted to Waziristan, a tribal area that hosts an estimated 2,000 al-Qaida fighters, are "huddling in their bases, doing nothing", said Art Keller, a CIA case officer who was posted to Pakistan last year.
"Their approach was to pretend that nothing was wrong because any other approach would reveal that they were unwilling and unable to do anything about Talibanisation," said Mr Keller, who has visited Waziristan.


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The Pakistani military insists it is doing its best. President Pervez Musharraf has repeatedly referred to the 80,000 soldiers posted to the tribal areas, about 700 of whom have been killed in action.
But Mr Keller said that behind the scenes the fight was riven by divisions among the officers. "There are the moderates who fear Talibanisation, the professional jihadis who want to embrace the Taliban again, and the middle group who aren't too fond of the Taliban but resent doing anything under pressure from the US out of sheer bloody-minded stubbornness," he said. "Because of [that], the Pakistani military remains paralysed."
Mr Keller alleged that retired army officers, including the former spy chief Hamid Gul, were secretly supporting the Taliban. "To the degree that they aren't arrested or forced to cease and desist, they are tacitly tolerated," he said. Gen Gul, who has faced similar accusations before, said last night: "I morally support the movement to end the American occupation of Afghanistan. But there is no physical dimension to it, no hidden agenda."
Mr Keller's comments come at a sensitive time in US-Pakistani relations. Since 2001 Washington has given Pakistan $10bn (£5bn) in exchange for counter-terrorism cooperation. But although hundreds of al-Qaida figures have been arrested, Osama bin Laden remains at liberty and Taliban attacks on Afghanistan have soared.
On Thursday the US assistant secretary of state Richard Boucher visited Quetta, the capital of the western province of Baluchistan where Nato officials say the Taliban has a headquarters. The chief minister of Baluchistan, Jam Muhammad Yousaf, told him that "Mullah Omar or Osama bin Laden are not [here]", according to a government statement.
Uzbek, Arab, Chechen and Somali militants are sheltering in Waziristan, to the north of Baluchistan. The majority Uzbeks are concentrated around Mir Ali in north Waziristan, where they have allied with local fighters - self styled "Pakistani Taliban" - to coordinate attacks inside Afghanistan.
Gen Musharraf's efforts to stem the violence through a controversial peace deal with the militants have failed, and in recent months "Talibanisation" has spread north out of the tribal belt and into North-West Frontier Province, with attacks on music shops, barbers and government officials.
But Mr Keller said American efforts to catch the ringleaders were being thwarted by Pakistani rules restricting CIA agents to heavily guarded military camps. "Limited freedom of movement and limited freedom to directly engage locals were, and remain, the biggest obstacles to success," he said. Critics say the CIA has also inflamed the situation through secretive attacks by Predator aeroplanes on al-Qaida targets that have killed dozens of civilians.
Last year the CIA revived efforts to hunt bin Laden and his deputy Ayman al Zawahiri. Mr Keller doubted they were in Waziristan. "I don't think the two top guys are there but some roads leading to them run through there," he said.
Excessive pressure from Washington was also hampering the chase, he added. Spies needed peace and quiet to "spin webs and wait for the flies to come", he said. "Such a manhunt is chess, not checkers."

Cut-Pasted survey statistics challanged(Large scale manufacturing numbers manufactured)

Cut-Pasted survey statistics challanged
By Israr Khan
ISLAMABAD: Draftsmen who were given the job at the Ministry of Finance to typewrite the Economic Survey 2006-07 have apparently cut-pasted the previous year's material, as a number of misrepresentation of facts have gone into the new survey.The survey's chapter on Manufacturing and Mining is full of errors and blunders. It has been totally cut-pasted only some digits and years have been changed, while the sense of text which has to be replaced in new survey remained the same as was in last year's Economic Survey 2005-06.The credibility of the official statistics is also evident from the fact that the statistics of the large-scale manufacturing used to be released on monthly basis some years ago.After July-September figures were not satisfactory for the government, they were stopped and did not appear in the last two quarterly reports of the State Bank of Pakistan, which is unusual. Suddenly they were manipulated to attain 7.0 percent growth target.All of a sudden July-April figures were released for inclusion in the National Accounts Statistics. Economic Survey contained July-April figures in grotesque manner.This gives an impression of concocted figures. In the chapter the poor and wrong representation of digits and facts is evident from the fact that the survey says, “Large-scale manufacturing, accounting for 69.5 percent of overall manufacturing registered an impressive growth of 8.75 percent in the current fiscal year 2006-07 against last year's achievement of 10.68 percent. There has been a slight decline in growth in the manufacturing sector due to multiple reasons like reduced production of cotton crop, sugar shortage, steel and iron problems and last but not the least global oil prices. All of these reasons contributed to reduced growth in 2006-07”. Should this not be called the fudging of facts or?As for instance, on page 35 in the introductory part, the survey says that overall decline in manufacturing sector during FY2006-07 was due to low cotton production, while in the very next page in table 3.1, it contradicts itself by stating that cotton yarn production grew by 11.9 percent and cotton cloth at 7 per cent over the previous fiscal. The Chapter also blamed sugar shortage as another reason for decline in manufacturing, while on the other, the survey say's that sugar production increased by 19.6 per cent in July-April 2006-07 over the corresponding period of the previous year.It says that there was a steel and iron shortage in 2006-07, while on the next page it says that billet production has increased by 11.18 percent to 3.11 million tones against the corresponding period of last fiscal. The chapter attributed reasonable growth to increasing demand for the durables but in the subsequent paragraphs it highlighted visible downward trend in the production in durables like TV and Cars.Besides, in mining and quarrying section of the chapter, it says that mineral industry is contributing to national economy just around 0.5 percent while in contrast on page 10 of Statistical appendix, table 1.2, it shows that during last four years its contribution to GDP was 2.6 per cent in 2003-04, 2.7 percent 2004-05 and 2.6 percent each in 2005-06 and in outgoing fiscal.Apart from all these, the survey claims, “High levels of liquidity in the banking system, an investment friendly interest rate environment, a stable exchange rate, low inflation, comfortable foreign exchange reserves, stronger domestic demand for consumer durables and high business confidence among other things will again boost the manufacturing sector growth rate up to a reasonable level”.In fiscal year 2006-07, the interest rate went up and tight monetary policy has resulted in substantial decline in credit to the private sector. In Chapter-1, lower growth in consumption is attributed to higher interest rates.Should it be called the ignorance of learned authors of the Economic Survey or manipulation or misrepresentation of facts?It also says that low inflation would contribute to LSM growth, but unfortunately, inflation during the fiscal year stood at 7.9 percent, which is substantially high.

Structural weaknesses of economy

Structural weaknesses of economy
EDITORIAL (June 13 2007): A prestigious international research organisation, BCA, in its special report on Pakistan's emerging markets strategy, has characterised the country's economy as structurally weak because of a low investment ratio and lack of competitiveness, says a Recorder Report.The report says that pressure on inflation/interest rates is on the upside, implying thereby that the odds for further growth are skewed to the downside. Further, trade accounts for a very small portion of Pakistan's GDP, and its export sector is struggling to maintain competitiveness in a few low value-added industries.More significantly, savings and investment patterns are poles apart as the country's savings and investment are much below a satisfactory level. The report lists spiralling trade deficit as a serious challenge to the country, and claims that Pakistan's 11 percent of GDP trade deficit has resulted from a combination of factors, which mainly include an uncompetitive export sector, with consumption outstripping domestic production.The report compares Pakistan's abysmally low spending on education, ie only 0.2 percent of the GDP, to Vietnam's allocation of 3.2 percent, which has put the latter in a better position than Pakistan to compete in manufacturing, given its development of human resources and infrastructure.According to BCA report, Pakistan's poor competitiveness is basically structural in nature, and a relatively cheap currency would not produce a significant revival in exports. Further, Pakistan cannot substitute its imports with domestic products simply because the imported goods are not produced by local firms.At the same time, any currency depreciation would only worsen the inflation dynamics, because the pass-through from the exchange rate to inflation has increased in Pakistan, thanks largely to a very large volume of imported consumer goods.Pakistan's growth is driven primarily by household consumption, which accounts for 7.8 percent of its GDP. Further, FDI inflows have been primarily channelled into the services sector because it is booming along with consumer spending. The macro fundamentals of Pakistan are thus inferior to those of many emerging economies. Structural problems have in fact contributed a lot towards Pakistan's economic woes.In particular, the state retains a prominent direct role in the economy and the tax system has been used extensively as a means of providing incentives to the possible detriment of revenue collection. Further, protectionist policies have shielded domestic producers from foreign competition, and have contributed to an anti-export bias. As tariff remains Pakistan's main trade policy instrument, its relative importance has increased as a result of elimination of non-tariff barriers on several items.As a consequence of a major restructuring of Pakistan's custom tariffs undertaken in 2001-02, the average applied tariff rate fell to 20.4 percent from 56 percent in 1993-04. However, tariff protection still remained relatively high.As a result, tariff remains a potential restraint on domestic competition, and this has served as an obstacle to efficient allocation of resources, creating adverse consequences for the economy's productivity and local firms export competitiveness.Pakistan has had a persistent current account deficit, although this was reduced considerably from 7.2 percent of GDP in 1995-96 to 1.9 percent in 2000-01, largely due to a substantial fall in the trade deficit. Further, Pakistan has always had a narrow export base concentrated in low-value added products and a few markets. And EU, the US and Japan have retained their positions as Pakistan's major trading partners. Further, border protection, which is now largely confined to tariffs, has been reduced drastically through unilateral cuts.Despite severe economic and political difficulties, Pakistan has by and large resisted protectionist pressures and opted for market-based reforms, including adoption of a more liberal attitude towards imports and foreign investment.Pakistan's long-term economic growth depends mainly on continued implementation of its economic revival programme, particularly in the reduction of direct state intervention in the economy, and improvements in the tax base. Secondly, Pakistan economy's long-term growth also depends on its trading partners' willingness to keep their markets open to Pakistan's goods and services. However, in order to achieve this objective, the government will have to ensure Pakistani products' competitiveness through strict quality control.
Copyright Business Recorder, 2007

Pakistani among those killed by U.S. attack in Somalia

American among those killed by U.S. attack in Somalia
By Mahad Elmi and Shashank Bengali
McClatchy Newspapers
MOGADISHU, Somalia - Somali officials confirmed on Sunday that an American was among the suspected Muslim radicals killed on Friday when a U.S. Navy warship fired missiles at a militant encampment in northern Somalia.
The American was not identified, but Hassan Dahir Mohamoud, the vice president of Puntland, the northern Somali region that declared itself semiautonomous in 1998, said that the American's passport had been recovered.
Five other foreigners were also killed in the strike, Mohamoud said, including citizens of Great Britain, Sweden, Morocco, Pakistan and Yemen. Two Somali nationals reportedly survived the U.S. missile strike.

Real income growth lags behind Asia(Pakistan’s per capita GDP growth has been one of the lowest in Asia)

Real income growth lags behind Asia
By Yousuf Nazar
Pakistan ranks as the seventh most dangerous country after Iraq, Sudan, Israel, Russia, Nigeria, and Columbia in a 121-nation study by the Economist Intelligence Unit.While such rankings can be subjective (it may be the 10th or 11th), this is not good news for the government which claims that Pakistan has made unprecedented economic progress during its tenure, recording one of the highest GDP growth rates.The reality is Pakistan’s per capita GDP growth has been one of the lowest in Asia and below the average of all low-income countries during 1999-2005, when measured in purchasing power parity terms as per the data in the World Bank’s Development Indicators released on April 15, 2007.The government uses statistics to make claims that cannot stand simple logical test and independent validation. For example, it cites the rise in per capita GDP to $833 in 2006 to support its claim that incomes have doubled in the past 6-7 years and Pakistan will soon become a middle-income country. This is simply misleading. The analysis based on the World Bank’s statistics reveals the true picture of the economic growth in Pakistan relative to the other developing countries.A widely recognised indicator of the level of prosperity is gross domestic product (GDP) on purchasing power parity (PPP) basis. Since nominal prices of different goods and services vary from country to country, this method of measurement neutralises those nominal differences by comparing what a similar basket of goods and services would cost in different countries. Hence, GDP measured on purchasing power parity basis is considered a more accurate measure of income level and standard of living.As shown in the graph, Pakistan’s yearly per capita income growth rate was only 4.62 per cent during 1999-2005 and lagged behind not just India’s 7.3 per cent but also that of similar developing countries with large populations, like Indonesia, Turkey, and the Philippines. These growth rates were derived from GDP per capita data on purchasing power parity basis, as published by the World Bank.While one-year data should not be used to comment on longer term trends, the above data for the six years belies government’s claims about one of the highest growth rates in the world and confirms the belief that the benefits of growth during the recent years have been somewhat eroded by a persistently high inflation. It is only logical that Pakistan with one of highest inflation rates in the developing world should see a slower growth in the real incomes and living standards when the rest of it is growing at 6-7 per cent with lower inflation averaging about 4-5 per cent compared to Pakistan’s 8-9 per cent. Hence these indicators are unlikely to change materially in one or two years.Other important World Bank development indicators (2005) also confirm the view that Pakistan remains behind its peers as shown below:Among this select group, Pakistan has the lowest per capita income in purchasing power terms, the lowest primary school enrolment rate, the highest infant mortality rate, the lowest electricity consumption per capita ( a measure of progress as well as industrialisation), and the highest level of military spending as a per cent of GDP. This is not surprising except for one indicator. Contrary to the widely held view among apologists and supporters of military dictatorships, the real per capita income is not only higher in India but the gap has increased since 1999. In that year, India’s per capita income was 25 per cent higher than Pakistan’s and in 2005 it was 46 per cent higher in purchasing power parity terms.This is not to say that Pakistan has not made any progress but to put it in a more realistic perspective beyond a narrow set of indicators like GDP growth, bank lending, consumption, foreign investments, etc. Progress in GDP growth terms has been good for most periods when military ruled the country. Yet, after the end of every military regime, the so-called progress turned out to be a bonanza that benefited a few at the expense of critical national development priorities while exacerbating social and regional polarisation.Assuming the elections will be held as per schedule even though the possibility of the imposition of emergency or even martial law cannot be completely ruled out, it is an appropriate time to judge the performance of this regime in the context of Pakistan history that has revolved around a debilitating cycle of military intervention, half-hearted reforms, failure, demoralisation and breakdown. We now appear to be passing through the disenchantment and demoralisation phase.Hitherto friendly international media has turned negative and some leading American papers have commented editorially on the gravity of the crisis. The New York Times in its May 23 editorial commented, “A succession of uniformed dictators has misruled Pakistan for more than half of its 60-year history. All have advertised themselves as great friends of Washington, but all have fanned extremism while discrediting America's reputation among ordinary Pakistanis. There is no security with General Musharraf. The United States belongs on the side of Pakistani democracy.”Never mind the crisis, the prime minister’s statements about the state of the economy and its prospects appear to be oblivious of worsening macro economic indicators and of growing anxiety in the street and the ‘bazaar’. It is claimed this year’s GDP growth will touch seven per cent, but the credibility of the government’s statistics is seriously questionable.According to its own data, inflation and exports target are going to be missed, development spending level is way short of target, current account deficit is forecast to reach 5.5-6 per cent of the GDP, and large scale industrial production growth has slowed down to eight per cent compared to 10 per cent in 2006, notwithstanding the fact the Federal Bureau of Statistics has not released quarterly manufacturing data after the first quarter of the current fiscal year as it did in the past.The stock market continues to rise, charges about manipulation notwithstanding, but the foreign investors’ buying has reduced to a trickle (about $5 million during May) after hitting a peak of $112 million during March 2007 and dropping to $52 million in April. Government borrowings have almost trebled to Rs212 billion during the current fiscal year from Rs73.5 billion last year. The crowding out of the funds to the private sector, accompanied by a more than 100 basis points increase in the average lending rate during the past year, cannot but negatively affect the growth in the next twelve months.Given the below average growth in rural areas and the concentration of 50 per cent of the urban population in the six largest cities to which bulk of the so-called ‘trickle down” seems to have been taken place; the high food inflation, growing income inequality and ostentatious consumption have only served to alienate the lower and lower middle income groups from the current regime.According to a public opinion poll conducted by the International Republican Institute (IRI) in March 2007, the economic issues received a much higher intensity of responses than did the non-economic issues with 92 per cent of Pakistanis terming inflation as the most important issue followed by unemployment (85 per cent). The country needs to face more fundamental questions of far reaching implications in the coming months in what is supposed to be an election year. The opposition parties should offer concrete and comprehensive programmes to address core economic issues instead of merely criticising the government for its failures.With the growing political uncertainty, the economic growth in Pakistan faces greater risks compared to its Asian competitors given its much higher dependency on foreign exchange flows including remittances, investments and aid in that order. The foreign investors’ buying of stocks has slowed, the privatisation programme is in trouble and the property market in Karachi is quiet. The biggest risk is the General will use the spreading disorder and the actions of an increasingly assertive judiciary and lawyers' community as justification to tighten the autocratic grip on power. This may cause the foreign capital flows to dry up, trigger a fall in stock and property markets, exacerbate the current account position, and increase pressure on an over-valued rupee to depreciate.A beleaguered administration is not in a position to impose new taxes and may find it difficult to contain the budget deficit at the current level. Neither it can afford to make big cuts in the development expenditure and is therefore likely to borrow more or print money. This will keep the upward pressure on interest rates to the detriment of the overall economy.Even if the General manages to come out of this crisis, it may come at a cost of sharing increased power with the politicians with his authority considerably weakened in the process. In this scenario, although the overall direction of the economic policies is unlikely to change, the uncertainty will not disappear as any alliance between the generals and the ‘liberal’ parties may serve to unite the rest of the opposition and provoke them into challenging the government with even greater force. In any event, a greater period of uncertainty seems to lie ahead and will continue to cast its long shadow on the economy until the current crisis resolves.yousufnazar@yahoo.com

Macroeconomic targets revised downward

Macroeconomic targets revised
By Khaleeq Kiani
ISLAMABAD, June 1: The government has revised some of the major macroeconomic targets for the current financial year mainly because of poor performance in key sectors of the national economy in the first 10 months of the year, official documents suggest.To start with, the target for growth in industrial production has been reduced by almost half -- to 6.8 per cent from 11 per cent projected in the budget. The target for large-scale manufacturing has also been brought down to 8.8 per cent from 13 per cent envisaged in the budget.This was mainly because of a dismal show by the industrial sector, particularly by the LSM where the automobile industry, fertilizers, engineering and paper and board besides some others registered a decline in growth.In agriculture, cotton production target has also been revised to 13 million bales from the original target of 13.82 million bales, showing a reduction of 0.82 million bales. Similarly, rice production did not come up to the target of 5.7 million tons set in the budget and, hence, has been revised to 5.4 million tons. Wheat and sugarcane production, however, remained higher than the budgeted targets.The target for private sector investment has been increased to 16.20 per cent of the GDP from the 14.30 per cent fixed earlier. However, the total public sector investment has been reduced to 5.20 per cent from the original estimate of 5.60 per cent of the GDP. Similarly, the public sector development programme was originally projected to be around 4.70 per cent but has now been reduced to 4.10 per cent.On the trade side, the export target has been brought down to $17.20 billion from the original projection of $19.80 billion, showing a reduction of about 13 per cent. Imports have also slowed down and as a result the target has been reduced slightly to $27.10 billion compared with the original estimate of $27.40 billion.Therefore, the total trade deficit target has been increased to $9.90 billion from the original estimate of $7.60 billion, up by more than 30 per cent. The target for trade deficit in services has also been increased to $8.30 billion from the original projection of $7.70 billion. Private transfers and remittances, however, performed better than expected and helped containing the overall current account deficit, which otherwise might have been quite higher.The current account deficit target has also been increased for the current year to $7.10 billion compared with the original target of $6.30 billion. The inflation target has also been increased to 7.60 per cent instead of the original target of 6.50 per cent, mainly because of the government’s inability to contain food prices.