Epaper_23-01-02 ISB

P I A t o u n d e r g o e A S A A u d I t t o d et e r m I n e w h et h e r e u o P e r At I o n S w I l l r e S tA r t

tHe european union aviation safety agency (ea sa) is scheduled to conduct a remote safety audit of the pakistan International airl nes (pIa) and pakistan civi aviat on authority caa (pcaa) on March 7 the audit wi l determine the air worth ness of pIa, and whether it will regain access to european airspace the european un on aviation safety agency is an agency of the european un on with responsibility for civi av ation safety It carries out cert fication regulation and standard sation and also performs investigation and monitoring a

successful audit would allow pIa to restart flights to the eu but not the uk ea sa and the uk s department for transport are two separate bodies both have been approached separate y says abdullah Hafeez khan, pIa’s spokesperson we are ver y conf dent we have consistently cleared t,” sa d khan “ norma ly these things take weeks but on successful audit a team will visit to physically verify their findings,” sa d khan when profit asked when pIa would receive a verdict fol owing the aud t “ Market size in terms of revenue now stands at rs 50 b llion plus wh le in terms

of percentage we would be looking at regaining the lost 40% that we had ” khan continued when prof t asked how much pIa would stand to gain f the audit were to be successful the company ended Q3cY22 with a net loss of rs25 billion wh ch increased the r accumulated net oss for the year to a tota of rs 67 bil ion this s a 58 per cent year-on-year increase from its accumulated loss of rs 42 7 bi lion over the same period last year PIA’s cur rent stop gap mechanism for EU bound flights pIa currently ser ves destinations in the european union a ongside, the uk, and the usa through a code-sharing mechanism with turkish a rl nes pIa fly ’s passengers directly to its counterpart s hub in Istanbul and then to twenty-e ght destinations across the aforementioned markets the mechanism is currently a means for pIa to mainta n routes it had been cordoned off from after the fake degree scandal the arrangement was announced on october 28 with the two countries celebrating 75 years of international re ations with first flight commencing on november 15 2022 It came at the backdrop of pIa still suffering from the ram fications of its l cence issue dating back to the crash of fl ght 8303 on 22 May 2020 after wh ch, then federal Minister for aviation, ghu am sar war khan alleged that 150 pilots had fake licences th s subsequently led to the european union aviation safety agency (ea sa) mplementing a ban on the carrier with the federa av ation adm nistration (faa) in the us, and the department of transport in the uk fo lowing su t with a similar restr ct on

discusses MQM-P,

LAHore/KArACHi

prime Minister shehbaz shar f on sunday phoned former president asif ali Zardari and Jamiat ulema-e-Islam (JuI) chief Maulana fazlur rehman and discussed w th both the leaders the overall pol tica and economic situat on the telephonic conversation came after the ru ing pakistan Muslim league-nawaz (pMl-n) decided to mediate between Muttahida Qaumi Movement pakistan (MQM-p) and pakistan people’s party (ppp) over the de imitation issue according to sources privy to the development, MQM-pakistan has expressed serious concerns over the non-implementation of the agreement signed with the centre and the sindh government they said the MQM-pakistan has categorical y told the pMl-n that holding loca body elections without new del mitations n karach wou d be mean ngless the party also complained that the ppp-led sindh government had not amended the local government act the sources revealed that senior leaders from pMl-n have contacted ppp co-chairman asif ali Zardari to convey him the reser vations of MQM-p over del m tations Meanwhi e the pM discussed with both the leaders the pol tical sit-

uation prevailing n punjab the three leaders agreed to convene a meeting of the coalit on parties soon

It is to be noted here that governor baligur rehman had de-notif ed perva z e ahi as the chief M nister of punjab for not taking the vote of confidence from the pun ab assembly a few days ago pervaiz elahi had challenged the governor ’s order in the lahore H gh court (lHc) dur ng the hearing of his petition pervaiz elahi had assured the court in h s undertaking that he would not d ssolve the punjab assembly t l the next hearing of the case the court fixed the date of the next hearing of the case on Januar y 11, 2023 (after the high court vacations) and got written assurance from elah that he would not disso ve the assemb y till the next hearing in lHc outrage over b lawal s speech

Muttahida Qaumi Movement pakistan (MQM-p) convener khalid Maqboo s ddiqui expressed outrage over the pakistan peoples party s (ppp) attitude regarding the delimitations of sindh local government (lg) po ls an emergency meet ng of the MQM-p rabita committee meeting was chaired by dr kha id Maqbool s ddiqui n wh ch the convener expressed outrage over the ppp’s stance over the de imitation of sindh lg po ls

2022 and the ‘new normal’

2022 will be remembered as the year that Pakistan saw a Prime Minister ousted by Parliament through a no-confidence motion for the very first time That event proved seminal, for it led not only to an apparent violation of the constitution by the Mr Khan and others, but it also led to a seminal confession by cOAS Gen Qamar Javed Bajwa that the Army had become neutral, thus admitting by implication what was common knowledge: that it had routinely interfered in politics One result was that it led to the convulsions in the Punjab, which meant that 2022 could well be called The Year of Three cMs (Usman Buzdar, Hamza Shehbaz and ch Pervez elahi), just as the year 68 is called the Year of Four emperors in Roman history it perhaps epitomises the instability of the country that there has been no settling down, and the chief Ministership is once again in dispute, and before the Lahore High court Behind Mr Khan’s ouster was the parlous state of the economy That has not changed 2022 has seen the rupee hit record lows against the dollar, and a global energy and foodstuff crisis caused by the Russian invasion of Ukraine in February, with the conflict now dragging on with no end in sight As if that was bad enough, Pakistan also faced an exceptionally devastating monsoon flood, which some have rated the worst in its history The bottom line is that the economy has not stabilized

Unfortunately for Pakistan’s citizens, none of these crises show any sign of resolving themselves in 2023 even if an emergency is imposed, and federal elections postponed, and even if the PTi cannot dissolve the Punjab and KP Assemblies, there seems no way of putting off provincial elections, so the year will be an election year Unfortunately, elections between two parties which are at daggers drawn, but neither of which seems to have any solution to the economic problem, are not likely lead to stability At the same time floods are likely to be as bad as this year ’s because of climate change There is also a new covid wave engulfing china it has spread to the USA, as well as neghbouring india The government must prepare to face the pandemic at the same time as the floods it is not a good outlook, and it is only the human sprit, and divine intervention, that will enable the country to surmount 2023 After all, that is how it got through 2022

Fe W will regret the passing of 2022 it has seen soaring inflation and falling real incomes in a global cost of living crisis it has seen rising interest rates, a strong dollar and widespread difficulties over debt: according to the iMF 60 percent of low-income countries are in debt distress or at high risk of being so it has seen falling asset prices and heightened volatility in markets it has seen the failure of the cOP27 conference to bend the curve of emissions of greenhouse gases downwards it has not even seen full recovery from the dire outcomes of the covid pandemic especially among the world’s poorest people ’ An excerpt from a recent The Financial Times published article Glimmers of light in a terrible year by Martin Wolf

After almost two years since the start of the covid19 pandemic, the early days of 2022 had shown the build-up of signs of a waning coronavirus onslaught and its mutations, and back then a couple of months into the global supply shock, all exposing the deep flaws in the globally dominant neoliberal policy framework, not to mention the main existential threat in the shape of climate change fast unfolding, it was no less than writing on the wall that to maintain life as we know it needed a ‘new normal’

Apparently, it had become quite a dominant view point that the ways of greed, and profit over people mindset, in an overall environment of market fundamentalism rule all, were not the sustainable and inclusive ways, that the proponents of neoliberalism had so vehemently championed over the last couple of decades

Yet, despite the realization that the world could not return to this neoliberal setting as the pandemic gave way to some semblance of a routine life, unfortunately the ‘new normal’ has continued to remain the main theme in major policymaking arenas in both individual countries and overall globally

Aziz-ud-Din

M A Niazi Joint Editor

On the contrary, just into the last week of February, Russia invaded Ukraine, which accentuated the already difficult global supply shock; not only sending strong signals of famine, for instance, to a number of

parts in Africa, but overall increasing the scarcity and price of mainly food and energy At the same time, neoliberal policy still remains the dominant guiding post sadly, with not much progress made on regulation and overall greater role of governments in general

A recent The Guardian published article ‘The pendulum swung against globalization in 2022 – and that s no bad thing by Larry elliott pointed out in this regard ‘This was supposed to be the year when things returned to normal After the collapse of activity during the months of lockdown in 2020 and the supply bottlenecks of 2021 the hope was that 2022 would call time on an era of seemingly permanent crisis it hasn’t quite turned out like that ’

On the economic front the same recipe meant that overboard monetary tightening for instance led to significant capital flight in developing countries, on one hand and increased the impact of imported inflation at the back of stronger US dollar, and also because inflation reduction required a significant boost in aggregate supply that high cost of capital did not allow

The unnecessarily high interest rates kept by developing countries in general, and in Pakistan specifically firstly in order to wrongly chase foreign portfolio investment (FPi) or ‘hot money’), rather than keeping the cost of capital low, and giving boost to exports and allowing greater public investment and aggregate demand to attract foreign direct investment (FDi) instead Secondly, the policy rate was significantly raised under a mistaken thought process that it was aggregate demand that was mainly responsible for inflation, when clearly the main determination of inflation was and remains aggregate supply shock, a strong dollar increasing the imported inflation component, and higher cost push inflation

Overboard monetary tightening by the US Federal Reserve –a similar move made by many other major central banks globally, in addition to the same by a number of developing countries as indicated above –resulted in significant strengthening of the dollar, which increased external debt repayments on one hand, exacerbating the already difficult debt sustainability situation of developing countries like Pakistan, while high policy rate domestically added to these difficulties in terms of much greater domestic debt repayments So, on one hand, diminishing impact on foreign exchange reserves, making it difficult to service debt, and make necessary imports in terms of essential everyday items and also those used in producing exports, and on the other higher domestic debt repayments were squeezing already scarce fiscal space with developing countries

For Pakistan, reduced fiscal space, in addition to high inflation, low economic growth, and in turn revenues further reducing the fiscal space in addition to a difficult debt repayments situation, has brought all the more difficult choices in terms of catering the needs of millions of people who have lost their livelihoods –while a large number of people also lost their lives –in the wake of the catastrophic flooding; which cost the economy around $30 billion

The unnecessarily tight monetary policy stance in a number of major Western capitals, meant that in-

U S s a n c t i o n s o n I r a n a n d t h e i r i m p a c t

iran’s

Si n c e the iranian revolution in 1979, The USA and iran have had hostile relations including diplomatic This was due to iran’s actions, which included the hostage crisis, proxy wars and support for non-State actors such as Hamas and Hezbollah Since then, there have been unfriendly ties between the two countries because of Washington s action including Saddam Hussein s support for an attack on iran However, once the orthodox iranian revolutionaries were defeated in the 1990s, the islamic administration developed ties with several european nations, as well aschina and india, and the former USSR They discussed the oil and gas arrangements However, the USA s and iran s ties remained tense and antagonistic; US oil companies were barred from lucrative petrodeals, and the Bush administration designated iran as part of the Axis of evil

Furthermore, the nuclear programme of iran also affected the relationship of both states iran claimed that iran s nuclear programme was for peaceful purposes and also according to the iAeA states can keep nuclear weapons for peaceful purposes but due to the interests of the USA, it has imposed sanctions on iran which affected the iranian economy and as a result of the sanctions iran was unable to establish its hegemony in the region

The Joint comprehensive Plan of Action, also referred to as the iran nuclear Deal or iran Deal is a nuclear programme agreement between iran and the P5+1 (the five permanent members of the United nations Security council china France Russia the United Kingdom, and the United States plus Germany) together with the european Union that was reached in Vienna on

and the quantity of existing rotators has decreased by 66% The iAeA can examine offices announced as undeclared it can utilze iran’s atomic production network and all uranium mines and manufacturing plants

These hostile relations became much more serious during the Trump Administration in 2018, Trump withdrew from the Joint comprehensive Plan Of Action (JcPOA) and that relations have deteriorated and that iran’s economy is suffering because of severe economic sanctions Trump tweeted in July 2019 that iran had erred by shooting down a US military surveillance drone that had entered its airspace on 20 June 2019

Furthermore, Trump claims that the agreement was one-sided and that the deal was never made Trump also made a statement in 2018-2019 to increase sanctions against iran The USA has used Unilateral sanctions to weaken iran due to its nuclear weapons Sanctions against iran influenced the entire Middle east, and heightened tensions Trump’s goal was to Halt iran’s nuclear programme and to stop it supporting Shia against Sunnis across the region

US sanctions initially targeted investments in the oil, gas, and petrochemical industries as well as transactions with the islamic Revolutionary Guard corps and exports of refined petroleum products it covered banking and insurance activities, domain name registration, web hosting for corporate endeavours and shipping (including with the central Bank of iran) Subsequent Un resolutions have increased sanctions against iran

Iran has a reputation for being both overconfident and insecure , and it has long sought to defend itself from potential foreign inter ventions and meddling. It is more defensive than offensive to oppose Iran obtaining nuclear weapons because it would pose a challeng e to Israel, a longestablished heg emonic force in the region

flation– which was otherwise significantly determined by aggregate supply shock for although more so for developing countries, but also significantly for developed countries– remained at very high levels in the developed world as well during the current year According to the same Guardian published article, Larry elliott pointed out in this regard ‘For most western countries 2022 was the year when cost of living pressures hit a 40-year high, prompting the US Federal Reserve, the european central Bank and the Bank of england to slam on the brakes Threadneedle Street’s monetary policy committee met eight times in 2022 and raised interest rates each time ’

A significant move towards a new normal could have vociferously ushered in a move towards a non-austerity, and non-neoliberal policy, meaningfully incentivized a significant shift towards a much-needed green and resilient economic transition, catered to reducing income and wealth inequalities by making economic and political processes more inclusive– increasing in turn the impact of public opinion on public policy– and pushed towards decreasing poverty; where after for a number of decades before the pandemic, absolute poverty reportedly saw an increasing trend globally

On the contrary, apart from mainly a set of bright policy options presented under the Bridgetown initiative’, the same neoliberal, austerity, and procyclical policy mindset has continued to remain rampant during the current year This policy needs to end immediately, mainly given the window of opportunity to meaningfully reverse the onslaught of climate change– especially in terms of limiting the rise in average global temperature since the start of the industrial Revolution, to remain below 1 5°c– is fast closing; under a number of scenarios there may not be more than a decade to achieve this goal Hence it is essential that 2023 should mark the beginning, and in a deep way, of a much-needed new normal

The writer holds PhD in Economics degree from the University of Barcelona, and previously worked at International Monetary Fund Prior to this he did MSc in Economics from the University of York (United Kingdom), and worked at the Ministry of Economic Affairs & Statistics (Pakistan) among other places He is author of Springer published book (2016) The economic impact of International Monetary Fund programmes: institutional quality macroeconomic stabilization and economic growth’ He tweets @omerjaved7

omy expanded quickly in 2016, by 12 5 percent, after the nuclear accord was signed But the reprieve only

while

The Biden Administration argued and demonstrated its willingness to re-join JcPOA in order to remove mistrust and normalize relations between the USA and iran so that iran won t approach other powerful nations and pose a danger to the USA Biden consistently promised during the campaign to re-enter the iran nuclear deal that President Obama signed in 2015 and President Trump abandoned in 2018 in a September 2020 op-ed Biden stated, “if iran returns to strict compliance with the nuclear deal, the United States would rejoin the accord as a starting point for follow-on negotiations ” We will endeavour to enhance and expand the parameters of the nuclear deal with our partners, while simultaneously taking care of other pressing matters

F r o m a l l o f t h e s e f a c t o r s , i t c a n b e i n f e r r e d t h a t mistrust and conflicting interests strained the relations h i p s b e t w e e n t h e t w o s t a t e s a n d t h a t b o t h s t a t e s utilised their resources to oppose one another in order to protect their respective national interests However, in the Middle east both powers were competing for hegemony under the influence of “offensive realism ” iran appears to succeed in this endeavour, though, as it pursues nuclear power

iran has a reputation for being both overconfident and insecure, and it has long sought to defend itself from potential foreign interventions and meddling it is more defensive than offensive to oppose iran obtaining nuclear weapons because it would pose a challenge to israel a long-established hegemonic force in the region The best course of action for the USA and its allies would be to continue the talks and maintain contact with iran so that the West could get used to the concept of an iranian nuclear state and come to an understanding with it The sanctions should be eased, though, as they generally upset locals but pose little threat to iran s programme, which is growing more successfully

T h e A u t h o r d i d h e r g r a d u a t i o n f

‘

July 14, 2015 JcPOA deal required the balance (weakening) of Half of iran’s 20% enhancement of uranium and the suspension of improvement surpassing 5% There will be no greater advancement of improvement plants or heavy water reactors in Arak no new improvement destinations; no going back over or advancement of going back over Offices; no new taxes;

economy is crumbling after years of US sanctions and Tehran insists Washington must suspend those restrictions before the two sides can return to nuclear talks Due to the sanctions iran’s economy contracted an estimated 4 9percent% in 2020, steadily shrinking since 2017 According to estimates, iran s economy dropped by 4 99 percent in 2020, extending a negative trend that started in 2017 The islamic Republic’s econ-

lasted for a short

D

The effec ts of the 2023 epidemic remain

Yousaf Nizami Editor

Dedicated to the legac y of late Hameed Nizami Arif Nizami (Late) Founding Editor

Umar Aziz Executive Editor

Ahmad Joint Editor