Pakistan: Ruling junta finds it difficult to contain Imran Khan

The ruling junta in Pakistan seems to be having great trouble asserting itself while remaining within the limits of the law. With the interior minister making it clear that he is willing to go to any lengths — democratic or undemocratic; principled or unprincipled — to counter the PTI, he has just confirmed the worst fears of political analysts and observers who have been warning about Pakistan’s gradual slide towards totalitarianism.

There are no laws and no rules binding the government any longer, to paraphrase Rana Sanaullah. In other words, the PDM government will abuse state power if it needs to in order to neutralize the once again resurgent PTI. “It is us or them,” as the interior minister quite candidly explained in a recent interview during which he made these remarks. This hardly bodes well for national stability.

However, one may interpret Rana Sanaullah’s statement; the PML-N is clearly struggling to counter the PTI politically. It may not acknowledge this, but the large rally in Lahore’s Greater Iqbal Park late Saturday was a clear enough message that using state-sanctioned violence to cut the party down to size does not appear to be working.

The rally was, by most independent accounts, quite well-attended despite the Punjab administration’s efforts. The arrest and disappearance, respectively, of two prominent young faces in the PTI — lawyer Hassaan Niazi and head of the PTI’s social media team, Azhar Mashwani — reports of the detention of lower-level party organizers and their family members; police raids at supporters and sympathizers’ homes; and the willy-nilly blocking of Lahore’s roads with containers and other impediments on the day of the rally all failed to have a chilling effect on the PTI’s supporters. No wonder the interior minister feels frustrated.

Brute force only looks like an answer where politics fails. We saw this when PML-N activists were rounded up in July 2018 to sabotage the PML-N’s electoral chances, and we see it happening to a different set of actors today. In both cases, the forces behind the campaigns of abduction and harassment appear to be the same.

In both cases, the shameful acquiescence of civilian leaders — clearly hoping to derive political benefits from the violent repression of their opponents — allowed rogue actors to expand their influence in the political domain. Rana Sanaullah — himself a victim of the state’s excesses — should have known better.

The enforced disappearance of Mashwani and other workers, regulatory bans on the media’s coverage of the PTI, frivolous arrests of political workers and unleashing the police on the citizenry will not win the PML-N any free and fair elections.

Instead, they will worsen the anarchy that the interior minister himself concedes is prevailing in the country. Perhaps Rana Sanaullah should consider setting better precedents rather than repeating the mistakes of the past.

Courtesy: Dawn

 

 

US currency on the losing spree

The safe-haven US currency remained on the back foot on Wednesday following two days of losses as global financial markets regained a measure of stability on hopes a full-blown banking crisis can be averted.

The dollar index, which tracks the currency against six major peers, was flat in early Asian trading, following drops of about 0.3% in each of the past two sessions.

The weakness comes despite a rise in US Treasury yields, which is also the result of weakening demand for the safest assets.

The US currency has lost ground as investors took solace in First Citizens BancShares' agreement to buy all of failed lender Silicon Valley Bank's deposits and loans, as well as overnight comments by Michael Barr, the Federal Reserve's vice chairman for supervision that SVB's problems were due to terrible risk management, suggesting it could be an isolated case.

Still, traders remain very sensitive to signs of any further cracks in the banking system.

"Issues in US banks will remain the dominant influence on the US currency in the near term," Joseph Capurso, a strategist at Commonwealth Bank of Australia, wrote in a client note, pointing to the importance of weekly data on money market flows due later in the day, which will likely highlight the shift of deposits out of small US banks into large banks.

"Another large increase in inflows to money market funds is therefore a downside risk to the US currency over the next twenty four hours," Capurso said.

 

 

French strikes keep record crude oil on water

French strike action has led to record amounts of crude and condensate sitting idly offshore while the country's crude stocks have plummeted, analysts said on Tuesday.

Around 17 cargoes carrying crude oil, oil products or chemical products have been floating in French waters for the past week, according to Kpler crude analyst Johannes Rauball.

"Seven of these cargoes are carrying around 7 million barrels of crude and condensate, which marks the highest level on record and represents double what we observed at the peak in October of last year," Rauball said.

Industrial action over the past three weeks has impacted every French refinery.

The walkouts differ from the strikes that took place in October, 2022 in that they are coordinated on a national level, also affecting ports and depots, said Koen Wessels, oil products analyst at Energy Aspects.

France's crude oil stocks have fallen to 40.3 million barrels in March, according to consultancy OilX, the lowest since the firm's records began in January, 2010.

France's refinery intake has fallen to its lowest level since October 2022 at 764,000 barrels per day (bpd), data from consultancy OilX show.

The absence of French buying interest has increased supplies elsewhere of crude grades from the North Sea, west Africa and blends from the Caspian pipeline, according to traders.

This has weighed on prices of these crude grades as market players are forced to look elsewhere for buyers.

"It's a pretty bad situation," one trader said.

French crude oil imports from Nigeria have averaged just 30,000 bpd so far this month, compared with an average 200,000 bpd in January and February, according to Kpler.

"A vast amount of Nigeria's April loadings schedule has gone unsold," Rauball said.

Meanwhile, the Ekofisk North Sea crude grade, produced at a field in Norway where TotalEnergies has equity, relies on France for two-thirds of its export stream.

No Ekofisk cargoes have been discharged in France this month, compared with an average of 85,000 bpd in January and February, Kpler data show.

 

 

Pakistan faces furnace oil glut of 632,000 tons

Pakistan faces furnace oil (FO) glut of 632,000 tons following refusal of power plants to stockpile the fuel and poor export feasibility due to its low price in the global market.

The FO stocks have been accumulating since the start of last winter when power demand shrunk. Power plants are still not lifting furnace oil as electricity generation is mainly coming from hydel and nuclear sources, which have cut the demand of fuel oil for power generation.

The attempts by refineries to export furnace oil did not prove lucrative because of low price. Refineries determined it was financially unviable to export FO, as it could eat up their profits if the fuel was exported in the international market at a low price.

According to the sources in the oil sector, total 632,000 FO stocks include 539,080 tons of useable stocks and 93,147 tons of dead stocks.

Pakistan’s oil marketing companies (OMCS) currently hold 203,879 tons of furnace oil stocks, which is 32% of total stocks. The country’s power sector holds 202,280 tons of the fuel oil stocks with it, which is 33%, while local refineries have 220,068 tons, which is 35% of the total stocks.

The breakup of FO with the local refineries shows that PARCO holds 116,004 tons, National Refinery Limited has 32,327 tons and Pakistan Refinery 44,455 tons, Attock Refinery 16,826 tons, and Cnergyico has 10,457 tons of FO stocks.

The present FO stock is huge and is making the operations of local refineries vulnerable because it has been interrupting their operational capacity. They said that if the FO stocks were not lifting, it could further lead towards a shutdown of refineries’ operations.

On exporting the FO, industry people said that PARCO exported 60,000 tons and PRL exported 25,000 tons but the export price was not lucrative. The price in the global market is on the lower side and it can cause financial issues for the refineries if the stocks are exported at this price.

The situation is not attractive for the local refineries as power generation from FO in the month of February slumped by 80% compared to the same month of last year and in the first eight months of the current fiscal. Electricity production from FO also decreased by 50% compared to the same period of the last financial year.

 

China spent US$240 billion bailing out ‘Belt & Road’ countries

According to a Reuters report, China spent US$240 billion bailing out 22 developing countries between 2008 and 2021, with the amount soaring in recent years as more have struggled to repay loans spent building "Belt & Road" infrastructure.

Almost 80% of the rescue lending was made between 2016 and 2021, mainly to middle-income countries including Argentina, Mongolia and Pakistan, according to the report by researchers from the World Bank, Harvard Kennedy School, AidData and the Kiel Institute for the World Economy.

China has lent hundreds of billions of dollars to build infrastructure in developing countries, but lending has tailed off since 2016 as many projects have failed to pay the expected financial dividends.

"Beijing is ultimately trying to rescue its own banks. That's why it has gotten into the risky business of international bailout lending," said Carmen Reinhart, a former World Bank chief economist and one of the study's authors.

Chinese loans to countries in debt distress soared from less than 5% of its overseas lending portfolio in 2010 to 60% in 2022, the study found.

Argentina received the most, with US$111.8 billion, followed Pakistan on US$48.5 billion and Egypt with US$15.6 billion. Nine countries received less than US$1 billion.

People's Bank of China (PBOC) swap lines accounted for US$170 billion of the rescue financing, including in Suriname, Sri Lanka and Egypt.

Bridge loans or balance of payments support by Chinese state-owned banks was US$70 billion. Rollovers of both kinds of loan were US$140 billion.

The study was critical of some central banks potentially using the PBOC swap lines to artificially pump up their foreign exchange reserve figures.

China's rescue lending is "opaque and uncoordinated," said Brad Parks, one of the report's authors, and director of AidData, a research lab at William & Mary College in the United States.

The bailout loans are mainly concentrated in the middle income countries that make up four-fifths of its lending, due to the risk they pose to Chinese banks' balance sheets, whereas low income countries are offered grace periods and maturity extensions, the report said.

China is negotiating debt restructurings with countries including Zambia, Ghana and Sri Lanka and has been criticized for holding up the processes.

In response, it has called on the World Bank and International Monetary Fund to also offer debt relief.

 

 

Humza Yousaf to be Scotland’s next leader

Scottish nationalists picked Humza Yousaf to be the country's next leader on Monday after a bitterly fought contest that exposed deep divisions in his party over policy and a stalled independence campaign.

The 37-year-old practicing Muslim succeeds Nicola Sturgeon as leader of the governing Scottish National Party (SNP) and will take over as head of the semi-autonomous government once he wins an approval vote in the Scottish parliament.

Setting out his goals, Yousaf said he would concentrate on tackling the cost of living crisis, ending the divisions in the party, and making a renewed push for independence.

"The people of Scotland need independence now, more than ever before and we will be the generation that delivers independence," he said in a speech in Edinburgh after the results were announced.

Yousaf's victory was confirmed at the country's national rugby ground after a six-week campaign where the three candidates spent much of the contest criticizing each other's record in a series of personal attacks.

The SNP's unity, which had been one of its strengths, broke down over arguments about how to achieve a second independence referendum and the best way to introduce social reforms such as transgender rights.

Yousaf takes over a party with an overriding objective to end Scotland's three-centuries-long union with England. His predecessor stepped down after the British government repeatedly blocked a route to a new vote on independence.

While about four in 10 Scots support independence, according to a poll this month, the departure of Sturgeon - a charismatic and commanding leader - may initially slow some of the momentum behind a breakup of the United Kingdom.

The often bad-tempered leadership contest has relieved some pressure on British Prime Minister Rishi Sunak, who is dealing with divisions in his own party, waves of industrial action and high levels of inflation.

Yousaf won 52% of the vote of SNP members in the second round of counting, beating Kate Forbes, the finance secretary, who got 48%. Ash Regan, who had quit the government because of her opposition to proposed changes to gender recognition, was eliminated in the first round of counting.

Coree Brown Swan, a lecturer in politics at Queen's University Belfast, said it would be difficult for the party to unite after a divisive leadership contest.

"It's a broad church of a party, which incorporates lots of different ideologies and opinions on things beyond independence," she said. "How do you get everyone moving in the same direction again?"

The frontrunner to replace Sturgeon, Yousaf has stressed continuity with her record, including her push to make it easier for transgender people to gain official recognition to change their gender.

Yousaf has spoken of the need to focus on building the case for independence and achieving consistent support for the movement, adding that he was open minded on which process to pursue once that level of support was achieved.

He pointed to his own background - born in Glasgow, with a father from Pakistan and mother from Kenya - and views as examples of the inclusive, socially liberal and multi-ethnic Scotland that the SNP has promoted.

During the campaign, Yousaf appeared more relaxed than Forbes, a member of the Free Church of Scotland, in balancing his religious views with the party's socially progressive policies.

While Forbes faced criticism when she announced her opposition to same-sex marriage, Yousaf said he supports it. In 2016, Yousaf took his oath of allegiance in the Scottish parliament in Urdu while wearing a kilt, and he has referred to himself as coming from a "bhangra and bagpipes" heritage.

Yousaf also said during the campaign an independent Scotland should look at ditching the British monarchy.

Scotland voted against independence by 55% to 45% in 2014. Britain's vote to leave the EU two years later when most Scots wanted to stay, and Scotland's handling of the coronavirus pandemic, brought new support for independence.

However, an opinion poll this month showed the backing for independence dropped to 39% or 46% when 'don't know' are excluded. That compares with a record 58% in 2020.

Yousaf will be sworn in as Scotland's leader on Wednesday if he wins a vote in the country's parliament the day before.

"The key to getting independence is ensuring we have that consistent majority support," he said. "If we have that, the political obstacles that are put in our way by Westminster will disappear."

 

Largest strike brings Germany to a standstill

Airports, bus and train stations across Germany were at a standstill on Monday morning, causing disruption for millions at the start of the working week during one of the largest walkouts in decades as Europe's biggest economy reels from inflation.

The 24-hour strikes called by the Verdi trade union and railway and transport union EVG were the latest in months of industrial action which has hit major European economies as higher food and energy prices dent living standards.

Two of Germany's largest airports, Munich and Frankfurt, suspended flights, while long-distance rail services were cancelled by rail operator Deutsche Bahn. Striking workers wearing red high-visibility jackets blew horns and whistles through an empty Munich train station.

Employees are pressing for higher wages to blunt the effects of inflation which reached 9.3% in February.

Germany, which was heavily dependent on Russia for gas before the war in Ukraine, has been particularly hard hit by higher prices as it scrambled for new energy sources, with inflation rates exceeding the euro-area average in recent months.

Persistent cost pressures have pushed central banks to a series of interest rate increases, though policymakers have said it is too early to talk of a price-wage spiral.

Verdi union is negotiating on behalf of around 2.5 million employees in the public sector, including in public transport and at airports, while railway and transport union EVG negotiates for around 230,000 employees at railway operator Deutsche Bahn and bus companies.

In the hours running up to the strike, both sides dug in their heels, with union bosses warning that considerable pay hikes were a matter of survival for thousands of workers.

"Millions of passengers who depend on buses and trains are suffering from this excessive, exaggerated strike," a Deutsche Bahn spokesperson said on Monday.

Verdi is demanding a 10.5% wage increase, which would see pay rising by at least 500 euros (US$538) per month, while EVG is asking for a 12% raise or at least 650 euros per month.

Stranded passengers expressed both sympathy and unhappiness about the strike action.

"Yes, it’s justified but I for one never went on strike in my entire life and I have been working for more than 40 years. At the same time, in France they go on strike all the time about something," said passenger Lars Boehm.

EVG chairman Martin Burkert told the Augsburger Allgemeine newspaper on Monday that employers had not yet made a viable offer and warned that further strikes were possible, including over the Easter holiday period.

Deutsche Bahn on Sunday said the strike was completely excessive, groundless and unnecessary, and employers are warning that higher wages for transport workers would result in higher fares and taxes to make up the difference.

Monday's walkouts are part of waves of disruptive labour strikes in wealthy European countries in recent months including in France and Britain, where hundreds of thousands of transport, health and education workers are pressing for higher wages.

Protests against President Emmanuel Macron's pension reforms have sparked the worst street violence in years in France.

Commerzbank Chief Economist Joerg Kraemer said the economic impact of Monday's strike was limited so far but this could change if the strikes persisted over a longer time.

"The strike will strain people's nerves," he said. "But economically, the losses are likely to be limited to the transportation industry because factories will continue to operate and many employees will be working from home."

The head of the Bundesbank Joachim Nagel said last week Germany needed to avoid a price-wage spiral.

"To be clear, preventing inflation to become persistent via the labour market requires that employees accept sensible wage gains and that firms accept sensible profit margins," he said.

"Despite signs of second-round effects, we have not observed a destabilizing price-wage spiral in Germany so far."