CANADA

Pension funds post the largest investment losses since the financial crisis in 2008

Naomi Oliver
January 31, 2023



In 2022, Canadian defined benefit pension plans collectively suffered their biggest losses since the 2008 financial crisis, and despite a partial recovery, saw an average 10.3 percent RY-T decline in assets in the final months of the year, according to a Royal Bank of Canada survey.

Pension assets suffered sharp losses in the first two quarters of 2022 before starting to recover in the second half of the year. In the most recent quarter, pension assets returned 3.8 percent, as measured by the RBC Investor and Treasury Services All Plan Universe, which serves as the benchmark for performance.

Pension plan investors have been hit by unusually volatile markets, fueled by high inflation and soaring interest rates, as both stocks and bonds suffered losses rather than offsetting each other as has often been the case in previous market downturns. And while the plans delivered positive returns through the end of the year, they face many of the same burdens in 2023.

“Over the next few months, plan sponsors will need to be vigilant for risk factors such as the economic impact of central bank actions, ongoing geopolitical tensions and ongoing efforts to contain the outbreak of the COVID virus in certain emerging markets,” Niki Zaphiratos, managing director for asset owners at RBC I&TS, said in a press release.

Read Also: One of Canada's largest pension funds is abandoning crypto investment plans

Canada’s pension plan bond portfolios posted median losses of 16.8 percent in 2022 – the largest annual decline in more than 30 years – and also underperformed the benchmark FTSE Canada Bond Index. The losses were driven by central banks’ drastic moves to tame inflation by raising interest rates, with longer-duration bonds, which are most sensitive to inflation, accounting for some of the largest declines.

For pension plans, however, there was a silver lining from rapid rate hikes that led to a reduction in future liabilities. As a result, more pension plans ended 2022 in surplus, meaning their assets exceeded their liabilities. And higher fixed income yields could also give pension plan managers more opportunities to reduce risk appetite in their portfolios in the coming year.

Stocks also suffered, rather than acting as a counterbalance to falling bond prices. According to RBC I&TS, foreign stocks returned 9.7 percent in the fourth quarter but ended the year down 11.3 percent. And Canadian stocks returned 6.3 percent in the final quarter of the year, bringing their annual loss to a comparatively modest 3.6 percent. In general, value stocks outperformed riskier growth stocks during the quarter.

The last time pension wealth fell this sharply was in 2008, when Canada’s defined benefit pension wealth posted a median loss of 15.9 percent.

Defined benefit plans pay fixed benefits for as long as a beneficiary lives, based on their contributions and years of service.

Source: www.theglobeandmail.com

Ontario court rules encampments can stay if there’s a shortage of shelter beds

ROBYN DOOLITTLE

THE GLOBE AND MAIL

PUBLISHED JANUARY 29, 2023

An encampment for unhoused people at Allan Gardens in Toronto on Oct. 21, 2022.CHRIS DONOVAN/THE GLOBE AND MAIL

In a precedent-setting decision that will have implications across the province, the Ontario Superior Court of Justice has denied a municipality’s request to remove a homeless encampment on the basis that doing so – when there is no adequate indoor space – would violate the residents’ Charter rights.

The ruling, which was released Friday in a case involving the Regional Municipality of Waterloo, falls in line with a growing body of case law in British Columbia that has found denying a person the ability to set up shelter outside when space is not available inside infringes on their right to life, liberty, and security of the person.

“Just as the British Columbia cases have found … I conclude that the ability to provide adequate shelter for oneself is a necessity of life that falls within the right to life protected by section 7 of the Charter,” wrote Justice Michael J. Valente.

As a result, he found that the Region of Waterloo could not rely on a bylaw that it said prevented people from erecting temporary shelters on municipal land, when the number of homeless persons exceeded the number of available shelter beds.

However, Justice Valente also praised the region’s efforts to address the needs of its homeless population, and left the door open to it coming back to the court if in the future it is able to show evidence that there is appropriate shelter space.

In a statement released after the ruling, Region of Waterloo Chair Karen Redman said they are considering next steps: “Our commitment to supporting those experiencing homelessness continues, as we work to implement innovative and person-centred solutions, including our interim housing solutions and the development of a plan to end chronic homelessness.”

A key aspect of Justice Valente’s decision dealt with the idea of what it means for a bed to be “available.”

Shannon Down, who along with co-counsel Ashley Schuitema represented 16 members of the encampment in the proceedings, explained that the court found that the bed must be truly “accessible.” It’s not simply a matter of an open space on a spreadsheet. For example, she said, if a person is dependent on drugs, but a shelter doesn’t allow substance use, then is that an actual option?

Similar questions come up with people who are asked to abandon beloved pets in order to access a bed. Or with couples who may be forced to split up for the night.

Sean Simpell, one of the encampment residents, told the court what it would be like for him to be displaced: “It is my greatest fear. This encampment may seem like garbage to some people, but to the people living there, it’s everything.”

Ms. Down, who is the executive director with the Waterloo Region Community Legal Services, said she thought the testimony of expert witness Andrea Sereda was particularly convincing for Justice Valente.

Dr. Sereda, who is lead physician for the health outreach program at London InterCommunity Health Centre, spoke to the harms of dismantling encampments as well as the positive health and social benefits of allowing them when there is no other appropriate housing.

“What we find in London is that when encampments are torn down, health care teams lose track of those people,” she told The Globe and Mail. “If I diagnose someone with diabetes and I try to follow up a week later, I can’t find them. … When people are constantly moved, you can never get ahead of their health issues. It’s always putting out fires.”

There are other considerations as well: the mental-health impact of being displaced and othered, the loss of community connections, the loss of possessions and an increased risk of overdose.

Dr. Sereda said those who talk about the harms within encampments – the Region of Waterloo cited concerns about alcohol and drugs, physical violence, and the presence of barbecues and propane tanks creating a potential fire hazard – are missing the point.

“We need to address the underlying poverty, scarcity of need, food deprivation and lack of warmth – those are the problems people who live outside are trying to resolve.”

Sharon Crowe, a lawyer involved in continuing litigation against the City of Hamilton’s response to encampments, said she expects Friday’s decision to be very influential – even though some of the contextual nuances of the Waterloo case are not exactly the same. For example, in Hamilton, some of the encampments in question are in public parks.

Friday’s decision concerned a congregation of tents in a one-half-acre gravel parking lot in the City of Kitchener, which is within the Region of Waterloo. The property, which was not being used by the municipality, is surrounded by a transit station, a plaza, a rail corridor and a soup kitchen. These locational differences could shift the legal analysis.

Still, Ms. Crowe said there are many analogous factors, particularly with respect to the lack of accessible alternatives and the impact of displacements.

“The facts behind the Kitchener-Waterloo case are not unique to that region,” she said. “A big driving factor behind encampments is we’re in the middle of an affordable-housing crisis. Add onto that, many municipalities don’t have enough shelter beds to meet demands and they aren’t truly accessible for all the reasons outlined in the [Superior Court] decision.”

In fact, Ms. Down said Justice Valente’s ruling could impact cities outside of Ontario as well. Although other provinces are not bound by decisions from provincial courts in Ontario and British Columbia, the judgments would be considered “persuasive,” said Ms. Down.

“I think this is particularly true with Charter cases, because it applies across the country,” she said. “The decision is going to be a powerful tool for people who are arguing on behalf of those who are living in encampments.”

Julia Riddle, a lawyer at Arvay Finlay in Vancouver who was involved in a recent encampment case in that province said they are pleased to see that Ontario courts are finally catching up to what’s been happening in British Columbia. The lawyer identifies as non-binary and goes by they.

“I think one of the things I definitely didn’t understand before working in this area is the level of trauma that people experiencing homelessness deal with from being forced to move. Those of us who are housed have probably moved and lost our mind a little bit. If you’re homeless that’s magnified by a factor of thousands,” they said.

“The tremendous uncertainly of not knowing what’s going to happen next in your life, it really limits people from being able to do anything to change other factors in their lives.”

Toronto vulnerable to legal challenge after precedent-setting encampment ruling


Tue, January 31, 2023 



Experts say Ontario cities that move to evict homeless encampments can expect to see a wave of legal challenges after a precedent-setting ruling.

For the first time in the province, a judge in Kitchener, Ont., ruled last week that there is a constitutional right to shelter outside when there are no accessible and available indoor spaces.

Estair Van Wagner, an associate professor at York University's Osgoode Hall Law School, says Toronto is "extremely vulnerable" to a legal challenge in light of that decision.

She says Ontario courts have until now been slow to follow the lead of courts in British Columbia, where judges have recognized that before a city can carry out an eviction, shelter spaces must be accessible given the varied needs of people experiencing homelessness.

Kaitlin Schwan, the executive director of a national housing and homelessness network, says the case is a critical first step for Ontario to recognize that the human rights of unhoused people supersedes some bylaw enforcement.

But she also calls it a complicated victory for encampment residents and their allies, since the ruling does not place any obligations on municipalities to provide shelter or housing.

This report by The Canadian Press was first published Jan. 31, 2023.

The Canadian Press

Why bash the elite?

Pakistan’s plight isn’t solely because its elite are corrupt; their values and worldview have failed.

Pervez Hoodbhoy 

Published January 28, 2023

ELITE-BASHING is Pakistan’s newest sport. As the country stares into the default abyss, the ubiquitous phrase — ‘elite state capture’ — putati­vely explains all that has gone awry. Fat-cats are blamed for stealing public resources, conspicuous consumption, and dollar flight. But this super-sim­p­lified, sophomoric reasoning misses the real point.

Doesn’t every country have its ultra-rich? Are they less greedy, avaricious, exploitative, and degenerate? Wealth and privilege in America, Europe, China, Russia, and India are still more concentrated than here. But mafias and silovikis notwithstanding, their knowledge-based economies keep soaring and their spacecraft are circling the moon and Mars.

Our elite versus theirs — something truly sets us apart. Beaming a spotlight onto this is useful because it reveals actual differences between societies; every elite mirrors what lies below.

Look at Pakistan’s home-grown elite. Like the common man, they spit on the law. Last week, when Britain’s prime minister was hauled up for not wearing a seatbelt, he meekly apologised and paid the fine. Compare: an anti-terrorism court judge reportedly had two patrolling officers suspended for preventing his travel on the thickly fogged-up Sialkot Motorway. Or, when an MPA’s SUV zipped through a red light and crushed a policeman in Quetta, the MPA’s political might ended the matter after the family was paid token compensation.

Pakistan’s plight isn’t solely because its elite are corrupt; their values and worldview have failed.

As in some African countries, Pakistan is home to the world’s richest politicians, real-estate tycoons, and generals. Symbiotically bound together, on Fridays they love being seen in a state of unctuous piety. Donning a prayer cap and dressed in starchy white shalwar-kameez, one by one they step out from their shiny new SUVs and into a DHA mosque.

In cultured societies, elites take delight in scientific and academic matters. They endow universities with chairs and professorships. Institutions bearing their names immortalise the donor. Named after J.R.D. Tata, the Tata Institute of Fundamental Research is the proud flagship of Indian science. But you can fruitlessly scour all of Pakistan for someone who will donate for science or the arts. As for music: famed Pakistani ghazal singers like the late Mehdi Hasan and Ghulam Ali received more appreciation in India than Pakistan. Philanthropy in Pakistan means donating to madressahs, mosques, and hospitals.

Instead of blasting away with a shotgun, let’s understand that all rich people are not rich for the same reasons. Some are rich because of brain power and hard work. Others are rich because they are thugs, land grabbers, manipulators, and rent-seekers.

Forbes (2023) identifies the five richest Ameri­cans: Jeff Bezos (Amazon), Elon Musk (Tesla), Bill Gates (Microsoft), Larry Ellison (Oracle), and Mark Zuckerberg (Meta). Their creations have alt­ered your lifestyle and mine. While rich Ind­i­ans are not highly innovative, they too are quite technological. Forbes identifies the five richest as Gau­tam Adani (power generation), Mukesh Amb­ani (pet­rochemicals), Shiv Nadar (IT), Cyrus Poon­awalla (vaccines), and Radhakishan Damani (retail).

No wealthy Pakistani with businesses in the country has made it to the Forbes list but reportedly the five richest are: Mian Mansha, Sadruddin Hashwani, Asif Ali Zardari, Malik Riaz and Habibullah Khan. How they made their billions is not for me to know. But what exportables have they produced? Will Pakistan forever rely on bedlinen, underwear, and footballs to earn dollars?

As forex reserves dwindle, one hears the dictum “import less and export more”. This is a no-brainer that macroeconomic jugglery cannot fix; between PDM and PTI’s approaches, the choice is of Tweedledum versus Tweedledee.

Sociologists from the time of Max Weber have established that wealth production correlates directly with values, culture, and worldview. Clearly, significant change in Pakistan has to be generational — a culture of honest hard work, high-level skills, or a law-abiding citizenry cannot be created with a finger-snap.

What kind of attitudinal, cultural, and ideological changes are needed?

First, stop force-feeding nonsense to our schoolchildren. What goes under “education” is actually religious and propagandistic indoctrination. The result is mass stupidity and Somalia-level learning outcomes. Don’t blame the government alone — all of society is at fault. With a handful of exceptions, our universities are trash; half of fully tenured professors are fit only for driving taxis. In such intellectual deserts, students demand only grades and degrees. Most vice chancellors, deans and chairpersons would, at best, count among the semi-educated elsewhere.

Second, stop blaming the world for Pakistan’s problems. You cannot hate the West and, in the same breath, supplicate it for bailouts or apply for immigration. We are authors of our own misfortune.

Without Pakistan’s help, the Taliban monster and terrorism wouldn’t have existed. It’s true we were misused by Americans in warring with the Soviet Union. But didn’t we milk the American cow until its udders ran dry of dollars?

Who created the vast countrywide network of jihadist organisations aimed at installing fanatical forces in Kabul and liberating Kashmir? But for FATF, Hafiz Saeed would still be strutting around Pakistan instead of cooling his heels in prison.

Climate change, of course, is not our fault. Others spew CO2, but impoverished Sindhi and Baloch peasants pay the price. Pretending to speak for them, our predatory political elite celebrate an anticipated bonanza. Their diplomatic blitzkrieg at COP-27 procured billion-dollar pledges from a guilt-ridden West. But who will benefit from climate reparations?

Before, during, and after the floods, thousands of luxury SUVs were imported. While the UK government has a car pool of 45 for all ministries and departments, Sindh alone has around 25,000 official vehicles with generous petrol quotas.

Third, stop being a security state. Pakistan is chronically unable to live peacefully with its neighbours as well as with itself. This is unsurprising. In the 1990s, the federal national curriculum required sixth class children to know about “India’s evil designs against Pakistan” and “to make speeches on jihad and shahadat”. Why the murderous TTP is so attractive to large swathes of Pakistanis is not hard to see.

Note how quiet the LoC is these days and the unusually low level of vitriol from Indian leaders. From their point of view: why spoil the fun? Just wait and watch as the unforgiving, amoral law of gravity asserts itself. Pakistan doesn’t need an external enemy for collapse; its civil and military elites have hollowed out their own house.

The writer is an Islamabad-based physicist and writer.

Published in Dawn, January 28th, 2023

Topsy-Turvy Land

These are not ordinary times; they are truly terrible times.

Rafia Zakaria 

Published February 1, 2023 



In one of the books I read as a child, some naughty children ended up in a place called Topsy-Turvy Land. The place, as the name suggests, was one where everything was the opposite of the way it should be: humans walked on their heads, cars had wheels on top, windows did not open and doors did not shut. The children stumbled along, making mistake after mistake relying on norms and conventions to which they were accustomed. They were glad when the ordeal ended … it had been intended as a punishment.

Pakistani children, and even Pakistani adults for that matter, would likely fare much better than the youngsters in the story. The past three years have seen just about every established truth and assumption questioned.

As I began to write this, the country’s currency was in a free fall, breaking records of low value against the US dollar. Even though the rupee had begun to pick up somewhat on Tuesday, on the back of remittances and exports proceeds according to some analysts, the larger economic picture is looking bleaker than ever and one wonders how much more the currency will depreciate in the days ahead.

A few days ago, Finance Minister Ishaq Dar took to Pakistani television channels to tell Pakistanis that there would be a Rs35 price hike on petroleum products. The same government that wanted pats on the back for averting the threat of default earlier told people about the increase in prices a whole two days before the expected announcement. Long lines for petrol could be seen everywhere in the country because people had been warned that this was just the first phase of these hikes, and that oil prices were set to increase even further when the new value of the country’s currency has to be used to compute prices. Perhaps some of you will be reading this article while parked in one of these interminable lines for petrol.

These are not ordinary times; they are truly terrible times.

The people in the lines for petrol are still better off than those who have no money to try. Quite recently, Dawn reported on the seven million jobs that have been lost in the country’s textile sector. This is a ghastly number when one considers the fact that there are towns and cities in the country whose entire economy depends on the textile industry. The closure of mills, including some without prospects of reopening in the near future, spells catastrophe for these places and the people who live in them and earn from the textiles sector. Given that one breadwinner in Pakistan supports a family of at least four or five people if not more, means that approximately 35m would have been affected by the closure of the mills. It is distressing to think how the auxiliary businesses that rely on the mills would also be affected.

As representatives of the textile industry told this newspaper, the current government “does not have any policy to end the various crises affecting textile producers and exporters”. Clearly, it is not prioritising the industry. The delay in opening letters of credit means that imported material cannot be procured on time and that means the mills won’t run. The reason this is particularly troublesome is that this industry actually generates foreign currency (which the country desperately needs) from its exports.

The current political set-up provides little hope for those who would like a return to some semblance of stability. The blame game between the current government and the previous dispensation, which was dramatically removed after its mysterious machinations had grown tedious and would have been boring (if the stakes were not so incredibly high), continues to mar the atmosphere. What both sides have in common is a lack of any real solutions; the fact is the country’s rulers past and present have partied too long and too often, high on the hog of earlier debts, all of which are now becoming due with terrifying urgency. Eventually, there will be elections, but any interference from other institutions would mean that the results will want legitimacy or permanence.

Pakistanis are accustomed to power outages but the recent outage that hit the country not too long ago is ample proof of the fact that the government quite literally cannot keep the lights on, or keep the gas flowing or even provide water, which in Karachi at least is in the hands of a huge mafia.

This price hike in the price of petrol will certainly make the provision of electricity and other basic commodities next to impossible. A sweltering summer awaits Pakistanis. The vagaries of climate change and glacial melt predict another year of floods and hunger. Where the rains once provided respite they now bring only more misery and destroy all that lies in the paths of rivers. Those who own these lands are too busy holding on to their power in the present to worry about what is to come.

These are not ordinary times; they are truly terrible times. It is difficult not to wonder whether the particular dynamics of wealth, poverty and inequality in the country is what makes this level of incompetence possible. The poor are silent because their existence has been reduced to a constant battle for mere survival. The rich remain smug and happy, continuing on with their shadis and mehndis where rivers of food and drink are wasted on a daily basis. The middle class writes articles such as this one, accursed with the unwanted gift of knowing that things are not about to get better, that a country whose wealthy pay no taxes, whose politicians are so deeply addicted to grift and where it is nearly impossible to discern the truth is not going to stop being Topsy-Turvy Land anytime soon.

The writer is an attorney teaching constitutional law and political philosophy.

rafia.zakaria@gmail.com
Published in Dawn, February 1st, 2023

Winged seeds of the west wind

Let’s see how Rahul Gandhi fits in with the gust and its potential to recast India’s political field.

Jawed Naqvi 

Published January 31, 2023 


The BBC showed a damning report on communal violence in Gujarat; a ripping investigation by a US company into alleged financial turpitude scalded a nouveau riche Indian tycoon in whose private plane Prime Minister Modi landed in Delhi in May 2014 to take the oath of allegiance to the constitution; and Rahul Gandhi’s hugely popular 4,000-kilometre long march for national harmony ended in snow-clad Srinagar. The elements are mixed and disparate. But, they are signalling in unison to a harrowed audience: the winged seeds of change are sprouting.

Shelley used the metaphor of the seeds in his Ode to the West Wind, a poem of hope and rekindling of life in seeds that are given up for dead.

“The winged seeds, where they lie cold and low,/ Each like a corpse within its grave, until/ Thine azure sister of the Spring shall blow/ Her clarion o’er the dreaming earth, and fill/ (Driving sweet buds like flocks to feed in air)/ With living hues and odours plain and hill:/ Wild Spirit, which art moving everywhere;/ Destroyer and Preserver; hear, O hear!”

In a manner of speaking, a west wind is blowing that could end the suffocation of Indians enduring their most traumatic years since independence. In 1977, the west wind had gushed at the overthrow of a short-lived dictatorship.

Let’s first see how Rahul Gandhi fits in with the gust and its potential to sweep and recast India’s political field. We know that the two-part BBC documentary hit the right-wing establishment in the solar plexus. That a major government saw Modi as directly responsible for an unspeakable carnage 20 years ago is a significant new input into the public dossier still piling up against the former chief minister and his party. Modi’s supporters have called the BBC report an insult to the Supreme Court, but the apex court has listed a petition against the official ban for hearing on Feb 3. Be that as it may, the documentary has engulfed university campuses and colleges like wildfire

As for the $218 billion Gautam Adani empire, the US-based Hindenberg Research published a damning report on Jan 24. The result was instant and destructive. The Hindu reported the effect sans emotion. “The benchmark S&P BSE Sensex slid 1.5 [per cent] on Friday, dragged down by banking stocks on investor fears that a short-seller triggered rout in Adani Group stocks could impact lenders with a substantial exposure to the ports-to-commodities conglomerate.”

The Sensex fell 874.16 points to 59,330.90, with State Bank of India leading the losses at 5.03pc. The flagship Adani Enterprises, which opened a Rs20,000 crore follow-on public offer on Friday, slumped 18.5pc to Rs2,762.15 on the BSE. The Congress has demanded a “serious investigation” by the Reserve Bank of India and the Securities and Exchange Board of India (SEBI) into the report that accused the Adani Group of “brazen stock manipulation and accounting fraud” — charges the Adani Group said were “malicious” and timed to “ruin the public listing of its shares”. Rahul Gandhi had often named Adani as one of the clutch of tycoons around Mr Modi who had benefited from crony state support at the expense of the country. On Monday, Adani called the Hindenberg report an attack on India. Hindenberg Research, in its reply, said Adani was using nationalism to dodge the questions about alleged fraud.

A Western news agency reported that SEBI had increased scrutiny of deals by the Adani Group over the past year and will study the Hindenburg report to add to its own ongoing initial investigation into the group’s foreign portfolio investors.

Between the BBC documentary and the Hindenberg report is a hint of the West’s gathering discomfort with an Indian leadership they have needed to court. But there is unease as Mr Modi flaunts his ties with President Putin, after having canvassed support for a second term for Donald Trump, both being pariahs for the Biden-led alliance. Equally significantly, Modi’s self-advertised proximity to the Israeli leadership, in particular to Prime Minister Netanyahu, could be recoiling. He had leveraged useful support through his Israeli links in the portals of US politics. But, now, given the extreme right-wing control of Israel with its threatened adverse fallout on the alliance’s material help to Ukraine, it has robbed Netanyahu of traditional legitimacy.

Modi’s critical gambit in his balancing act concerns India’s membership of the anti-China Quad. However, with the subsequent formation of AUKUS between the old Anglo-Saxon allies of Australia, US and the UK, the Quad has become a B team in America’s anti-China talent hunt. In any case, Modi’s centrality to Washington’s need for an anti-Beijing anchor in India may no longer be the unchallenged proposition it was.

Rahul Gandhi has positioned the opposition to supplant him. A repeated theme in Gandhi’s long march to unite India focused on China. The topic has little political traction at home but should be finding keen eavesdroppers abroad. Rahul’s fulminations usually covered a gamut of issues from communal harmony to big corruption. But one of his favourite targets of attack was Prime Minister Modi and his alleged vulnerability against China. “The media will ask me personal questions all the time, but would they ever want to know what we think of Mr Modi’s handling of the Chinese moves on our borders?” The question posed by Rahul at whistle-stop media briefings masks a messaging.

By going hard on the China border issue, Gandhi was indicating a strengthened continuity in a foreign policy stance favoured by the West vis-à-vis China. In a way, it cancels his late father’s televised handshake with Deng Xiaoping in 1988, now an unspoken impediment to the post-Cold War pro-West Congress position. Rahul’s hard line on China clearly outpaces Modi’s. On human dignity, on doing business fairly, without cronyism, and in diplomatic finesse, Rahul Gandhi and the Congress are preparing the opposition to take charge. The wind looks rather favourable too.

The writer is Dawn’s correspondent in Delhi.

jawednaqvi@gmail.com
Published in Dawn, January 31st, 2023

Tanks & memories

Mahir Ali

Published February 1, 2023 

GERMAN tanks on the borders of Russia. Why does that ring a distant bell, in fact, an alarm bell? The last time that happened may have been 80 years ago, but the so-called Great Patriotic War still resonates loudly in the collective Russian consciousness, partly as a consequence of relentless state propaganda, but also because for some survivors it’s still a living memory.

It’s likely the German government’s reluctance to supply Ukraine with Leopard 2 tanks was in part an oblique acknowledgement of that horrible history. Germany invaded Russia twice in the 20th century; it’s understandable why it might not wish to be seen as the driving force behind a third attempt in the 21st century.

The government of Chancellor Olaf Scholz, which has already been supplying plenty of military aid to Ukraine, much of it surreptitiously, finally caved in last week after relentless bullying by its Nato allies. It also does not want to be singled out as a stumbling block in Western assistance for Kyiv’s resistance. Last week, it agreed to supply 14 of its coveted Leopards, in “lockstep” with allies such as Poland, the UK and US.

America’s M1 Abrams tanks were high on Volodymyr Zelensky’s Christmas wish list when the Ukrainian president visited Washington in December. Santa was happy to bounce young Volodya on his knee, but prepared to provide him only the smaller war toys — armoured vehicles, missile launchers and defence systems, and the like. Joe Biden relented last week: 31 Abrams tanks will wind their way to the war zone at some point. It could take months, if not years, The New York Times quoted military sources as saying.

Can more Western weapons ‘save’ Ukraine?

The Leopards could reach Ukraine much quicker, certainly in time for the commemoration of the 80th anniversary of the Battle of Kursk in western Russia in July-August 1943, which effectively turned the tide against the Soviet Union’s Nazi invaders. It is remembered as the largest tank battle in history: 6,000 tanks, 4,000 aircraft and 2,000,000 troops were involved, according to Encyclopaedia Britannica.

The difference this time around is that Russia is the invader. Notwithstanding serial Nato provocations over the previous three decades, the hostilities launched this month last year were Vladimir Putin’s choice. It would have qualified as an extraordinarily dumb choice even if his initial assumptions of a cakewalk to Kyiv had proved to be realistic.

They turned out instead to be absurdly inflated. Russian military adventurism has come a cropper on almost every front, and frequent changes of command have not helped. Raw recruits thrust onto front lines with little training can hardly be blamed for their poor performance, and too many of them will not live to tell their tales. Both sides are estimated to have lost more than 100,000 military personnel each. And for what? The Ukrainians can at least credibly claim to be defending their homeland. The Russians lack a viable excuse for their enforced sacrifice.

The Western attitude towards the conflagration of which it is incontrovertibly a part is broadly divided between those who consider the steadily increasing weaponisation of Ukraine to be a means of pushing Putin to the negotiating table, and an increasing number of others who envisage a decisive Russian defeat. But what exactly does a Russian defeat look like? Would driving Russian forces out of the territories occupied since last February suffice, or would it involve a reversion to the pre-2014 status quo ante? Both aims could be justified, the latter on the basis of the 1991 agreement between Russia, Ukraine and Belarus that demolished the Soviet Union.

There could be ambitions beyond that, though, which could feed into Putin’s claims of threats to the Russian Federation’s integrity. Ultimately, though, Putin himself is the biggest threat to Russia. Putin must go, and the impetus for that needs to come from within Russia, not from Washington, Brussels or Berlin. His reign since the turn of the century has been disastrous in many respects, but the February 2022 invasion of Ukraine takes the (poison) cake.

A Kremlin without Putin could potentially benefit both Russia and Ukraine. But there is no clear indication that such a development is imminent, and it is far from clear who will take over if, by hook or by crook, he departs. Among the possible successors is Yevgeny Prigozhin, whose brutal Wagner group of mercenaries has militarily been more effective than the regular Russian army. That would truly be disastrous, but the alternatives too provide little cause for hope.

Russia’s disastrous performance in World War I triggered the revolutions of 1917. It could do with a repeat. But the lethal arming of Ukraine — and broader Western hyperbole, such as The Guardian’s headline ‘Terror on New Year’s Eve: huge Russian missile attack kills one in Ukraine’ — doesn’t really help.

mahir.dawn@gmail.com
Published in Dawn, February 1st, 2023

Our Latin American slide

Sakib Sherani 

Published January 29, 2023

After a CIA- and MI6-orchestrated campaign of mass killing and ‘purges’ in Indonesia in the 1960s that left an estimated upward of one million Indonesians dead, the attention of the US turned to ‘fighting communism’ in South America.

In Chile, a bloody coup was engineered that ousted the popular and democratically elected, left-leaning government of president Salvador Allende on Sept 11, 1973, by Gen Augusto Pinochet. What followed was a dark chapter in Chile’s history, filled with brutal repression, enforced disappearances, illegal detentions and torture, and mass killings by the military regime and its secret police.

This period was characterised by the unleashing of state terrorism, the suppression of fundamental rights, and the complete evaporation of the rule of law and accountability of the army and security services. Over 40,000 Chileans are officially recognised as having been subjected to human rights abuses by the military and intelligence agencies over this period, including an estimated 3,200 subjected to extrajudicial killing.

Argentina’s dark period with regard to human rights abuses and political repression began with the military coup of 1976, the umpteenth time in the country’s history, that deposed president Isabel Perón and brought a junta into power. Led by army chief Gen Jorge Rafael Videla, the junta began an unprecedentedly violent campaign against political opponents and leftists, that it itself branded as “the dirty war”. Thousands of Argentinians were summarily picked up by security agencies, brutally tortured, killed and thrown into unmarked mass graves, ‘disappeared’ forever, or murdered by right-wing death squads.

Human rights abuses and debt-induced economic instability could be the new norm.

As the US’s ‘covert’ war against the spread of socialism and communism in the western hemisphere, dubbed Operation Condor, metastasized through South America, the same pattern of human rights abuses and killings on industrial scale by military regimes or proxies propped up by the US and actively supported by American military advisers and CIA operatives was replicated in Guatemala, Nicaragua, Ecuador and Honduras.

All told, an estimated several hundred thousand people across Central and South America died during this period in the “dirty wars” conducted by imposed military juntas.

Another feature of this period in Latin America’s history was that the military coups almost invariably provided beachheads for US corporations and the ‘Chicago Boys’ — technocrats inspired by, and working under, Milton Friedman and promoting the idea of an unfettered free market. Along with US involvement, poor economic management and protracted reliance on foreign loans, leading to unsustainable debt burdens, was another feature of Latin America that may resonate with Pakistanis.

Fast forward in time. In 2013, in yet another military coup against a popular and elected government taking place with the full backing of the US, president Mohamed Morsi of the Muslim Brotherhood party, Egypt’s first democratically-elected president, was ousted by the army chief, Gen Abdul Fatah al-Sisi. Thousands of Muslim Brotherhood supporters and other pro-democracy activists were gunned down or imprisoned without trial. The human rights abuses unleashed by the Sisi military dictatorship have been described as the worst since the Mubarak years.

One of the most egregious abuses occurred in August 2013, when the army and security forces attacked a peaceful protest by Morsi supporters, killing an estimated 1,000 unarmed demonstrators. Human Rights Watch described it as “one of the largest killings of demonstrators in a single day in recent history”. Hundreds of alleged supporters of the Muslim Brotherhood were also sentenced to death in a single mass trial.

In 2019, Mr Morsi died in detention in what UN experts ruled could amount to a “state sanctioned arbitrary killing”. There has been a deafening silence from the self-anointed global champions of human rights since the illegal coup and subsequent abuses of Gen Sisi’s dictatorship.

Since the regime change in April 2022, the Pakistani establishment seems to be dangerously tilting towards adopting the ‘politicide’ undertaken by Sisi’s Egypt (and previously by a host of anti-democratic regimes in Latin America and other places). While human rights abuses have a long history in Pakistan, they have generally taken place in the context of armed conflict against the state. Journalists have been killed, beaten and intimidated in the past, including some high-profile ones, but the assassination in Kenya of the country’s most prominent investigative journalist Arshad Sharif is a new and sorry low. Others have received death threats and been forced into exile. Adoption of inhuman torture tactics, including alleged sexual abuse, against political opponents is also an ominous new chapter.

As an aside, while the US involvement in Latin American military coups and subsequent human rights abuses had a clear strategic rationale, as well as commercial objectives (such as for the Iraq war), the motives for regime change in Egypt or Pakistan may be immediately less obvious. In Egypt’s case, keeping a client state within its sphere of influence is an obvious candidate — while keeping ‘Islamist’ influences at bay, no matter how democratic and peaceful. (France’s reaction to the Islamic Salvation Front (FIS) win in Algeria in 1992 and its involvement in sparking another “dirty war” in its former colony is another case in point).

In Pakistan’s case, US motivation in promoting regime change appear two-fold. Reinstating the discredited and crooked old guard ensures continuation of a pliant political system in which the military and corrupt domestic ruling elite operate hand in hand in furthering US interests. The other is to contain China’s influence after the launch of CPEC and cut off its potential access to Gwadar. Limiting China’s access to Afghanistan’s mineral riches also appears to be a strategic goal.

Regime change. Abductions. Wrongful confinement. Torture. Assassination. Attempted assassination. Enforced disappearance. False cases. Exile. Silencing of critics. Repositioning as a US client state. We appear to be ticking all the boxes.

While human rights abuses in Pakistan are not new, they have taken a dangerous turn in their scale as well as brazenness in the post-regime change scenario. Whether Pakistan is going to ‘walk like an Egyptian’ or slide like Latin America, either way it is a dangerous and ominous development that can only be the precursor to several very difficult years ahead.

The writer was a member of the economic advisory council under the former prime minister.

Published in Dawn, January 29th, 2023

Future of Pakistan

Faisal Siddiqi 

Published January 28, 2023


“For a revolution to break out, it is not enough for the lower classes to refuse to live in the old way; it is necessary also that the upper classes should be unable to live in the old way.” — Lenin

THE recent narratives of imminent collapse and inevitable need for radical change propounded by Miftah Ismail and Shahid Khaqan Abbasi remind me of my recurring conversations with my wife.

I recently again explained to her that if things in Pakistan do not radically change, collapse is imminent. My wife’s response was devastatingly insightful. She reminded me that I had propounded the same analysis of imminent collapse and the inevitable need for radical change for the last two and a half decades, but still Pakistan had neither collapsed nor had the inevitability of radical change emerged.

Neither breakup nor collapse but violent chaos: Anyone who bases his theory, or need, for radical change on the premise that unless radical change occurs, Pakistan will either break up or collapse, will be disappointed.

Firstly, at present, the only secessionist movement in Pakistan is the Baloch insurgency. Despite their unquestionably legitimate complaint of being treated as a colony in their own country, they neither have the military capacity nor will any international power intervene on their behalf to defeat the Pakistani state. They will continue to be a violent problem for the Pakistani state, like the Kurdish separatist movement in Türkiye.

Secondly, as Theda Skocpol in her book States and Social Revolutions explains, external wars and their connected fiscal crises lead to social revolutions.

Although Pakistan is involved in a low-intensity conflict, or cold war, with both India and elements from Afghanistan, there appears to be little possibility of a full scale war with India or that of extremist religious elements like the TTP defeating the Pakistani state. These conflicts will continue to bleed Pakistan, but the country will not collapse because of these conflicts.

Pakistan is imploding, and its future is not breakup or collapse but more violence and chaos.

Thirdly, will the fiscal crisis lead to a collapse? Our history shows that Pakistan’s utility as a mercenary state for international forces, especially in this critically important geopolitical region and also as a nuclear power, has always provided a reason to financially bail out Pakistan, as happened under Ayub, Zia, Musharraf and even under the post-2008 democratic regimes.

The most likely scenario is that we are entering a period of continuous severe economic crises and political chaos with unending game-of-thrones battles between the PTI and other political parties, ever-increasing terrorism by Baloch separatist and religiously motivated extremists, international and regional semi-isolation, an extraordinarily corrupt and inefficient state, and collapsing societal institutions in the face of unchecked population explosion and unregulated urbanisation — while our human development indicators get progressively even worse.

Pakistan is imploding, and its future is not breakup or collapse but more violence and chaos.

Lovers of the status quo: This raises the key Leninist question cited above — why are our ruling elites able to survive and flourish by maintaining their old ways/status quo despite the ever-increasing dysfunctionality and crisis of both state and society?

Most analysts think that the Pakistani ruling elites are either too incompetent to comprehend solutions, or selfish (with mala fide intentions), or both. But the answer lies elsewhere: firstly, the current status quo of a corrupt, inefficient, elitist and anti-people Pakistani state is being sustained because it guarantees the political and bureaucratic power of these elites. So why would they change something which benefits them?

Secondly, all ruling elites have mala fide intent or are selfish, or both. But similar elites in other countries have historically reformed themselves in order to remain the ruling elite because the old order was unsustainable. Angels will not descend from the skies to govern us.

Thirdly, these elites have seen it all; namely, fiscal crisis, wars, terrorism, crime, an inefficient state and the worst social indicators; but, despite this, they have still survived and flourished. So why reform?

Agents of change, not solutions: There is always hope for change in countries like Pakistan because such ruling elites have neither the capacity for complete repression of dissent nor the intelligence (in their own self-interest) to initiate at least some reform to legitimise their elitist rule.

Moreover, the answer doesn’t lie in devising new solutions to our old problems, as examples from other developed countries provide a complete roadmap solution to building a democratic and modern state. Rather, the answer lies in identifying the agents of change.

Power within contemporary Pakistan is wiel­d­ed by eight actors and divided into: coercive and surveillance power (military establishm­ent), exe­c­utive and legislative power (politicians and bur­e­aucrats), constitutional and legal power (judiciary), narrative power (media), political mob­ili­sation power (middle class, especially youth and women), economic power (the moneyed elite), fatwa power (old and new religious leaders) and anarchic power (terrorists and secessionists).

Meanwhile, the ruling elite in Pakistan is broadly composed of two cooperating but also conflicting groups: a status quo elite that doesn’t want to change, and a selfish but enlightened elite (within the military, politicians, bureaucracy, judiciary, media, moneyed and old religious elite circles) which realises that this country is becoming unmanageable and unlivable for them and their children.

This latter group also feels ashamed of being viewed as a failed and beggar nation internationally. This selfish enlightened elite needs to rigorously push for radical reform from within the state and should refuse to support this decaying status quo.

In other words, they must expunge this status quo from the power structure. But this selfish enlightened elite will only succeed if the middle classes mobilise themselves against the status quo. The middle classes are the greatest losers in this continuing status quo as they are neither part nor beneficiaries of the ruling elites. The middle classes are the new societal agents of change, as Aasim Sajjad rightly argues in his book The Struggle for Hegemony in Pakistan,and this middle class power is also evident in the rise of the PTI and the successful lawyers’ movement.

Will change happen? The answer really lies within each one of us.

The writer is a lawyer.

Published in Dawn, January 28th, 2023

Pakistan’s corruption perception score falls to worst level in 10 years

Amin Ahmed 

Published February 1, 2023 

ISLAMABAD: Although Pakistan managed to maintain its ranking in Transparency International’s Corru­ption Perceptions Index (CPI) in 2022, its overall score fell to the lowest level since 2012.

According to the report released on Monday, Pakistan ranked 140 out of 180 countries — a position unchanged from 2021. However, its overall CPI score fell to 27 out of 100. Last year, the score was 28 out of 100.

“Pakistan [...]continued its statistically significant downward trend, this year hitting its lowest score since 2012 at just 27 points amidst ongoing political turmoil,” Transparency Inter­national said.

It added that former prime minister Imran Khan came to power on the promise of tackling corruption and undertaking social and economic reforms. “[B]ut little has been accomplished on any of these fronts since he took the reins in 2018.”

Country maintains 140th spot on Transparency International ranking

Under the PTI government, the ranking of Pakistan gradually slid from 117 out of 180 in 2018 to 140 in 2021.

The Berlin-based organisation said since Mr Khan was ousted through a no-confidence motion in April 2022, the Election Commission of Pakistan (ECP) disqualified him over allegations “he failed to declare gifts and profits he made from selling them during his tenure.”

“While awaiting the verdicts from these two cases, it’s most important that the new government does not allow such political scandals to derail comprehensive anti-corruption efforts,” the organisation said in its review of Pakistan’s performance on the index.

The index ranks 180 countries and territories by their perceived levels of public-sector corruption according to experts and businesspeople. It relies on 13 independent data sources and uses a scale of zero to 100, where zero is highly corrupt and 100 is very clean.

Pakistan is among the 10 nations whose CPI score has significantly declined since 2017. Among the biggest declines are Luxembourg (77), Canada (74), the United Kingdom (73), Austria (71), Malaysia (47), Mongolia (33), Pakistan (27), Honduras (23), Nicaragua (19) and Haiti (17).

Recommendations

However it said that upcoming elections in major countries, including Pakistan, offer some hope for addressing the issue,

“Elections in Bangladesh, Paki­stan, Thailand, Cambodia, Myanmar and more can be important moments... to address corruption concerns that weigh so heavily on many.”

To improve its ranking, TI recommended Pakistan reinforce checks and balances and promote separation of powers; share information and uphold the right to access it; limit private influence by regulating lobbying, promote open access to decision-making; and combat transnational corruption.

Published in Dawn, February 1st, 2023

PAKISTAN
Situationer: Looking for work that isn’t there

Aamir Shafaat Khan Published January 31, 2023 

A SEVEN per cent drop in textile exports during the current fiscal year has brought about thousands of layoffs in the industry, putting daily wagers and contractual workers at risk of starvation. And this is “just the beginning”.

The situation in the auto sector is equally grave, as more than “250,000 people have lost their jobs” due to a dip in the sale of automobiles.

Mazhar Iqbal (not his real name), 32, has been jobless for a month. “I worked as a contractual employee in the quality inspection department of a textile unit in FB Area for six years. But after I proceeded on sick leave, my employer asked me not to come back to work because my ‘job does not exist anymore’,” he told Dawn.

Mr Iqbal and his family depend on his sister, who works as a doctor in the UK, for sustenance. He said that after spending more than six years in the industry, it has become difficult for him to switch professions. But his dilemma is that other mills are not hiring.

Over 400,000 informal workers from textile, auto sectors lost their jobs in first half of FY23; stakeholders urge govt to develop strategy to avert further retrenchments

“I have been trying hard to get the same type of job but officials in other textile mills say that they cannot hire due to lack of work owing to a dip in export orders.”

Sharing his experience of the deplorable working conditions in the textile industry, he said it is a big challenge to survive in textile units. If a person fails to mark their attendance for two consecutive days, then the staff — posted at the gate — would take away their employment card and bar them from entering the premises, he claimed.

Shahbaz Ahmed (name changed to protect his identity), a machine operator who worked as a daily wager, has a similar ordeal to report. He lost his job at an auto parts unit in Korangi Creek almost six months ago, where he was earning Rs20,000 a month coupled with paltry overtime. But after losing his job, he has nowhere to turn. “Two months back, I tried my luck by setting up a cabin of confectionery items at Korangi No.6, but I was robbed twice,” Mr Ahmed disclosed.

According to him, he was taking care of a four-year-old daughter while three of his children have already passed away.

Living in a joint family with four married brothers in an 80 square-yard house in Korangi No. 3, he said, “I cannot explain how I am surviving this economic crunch, especially after the massive jump in prices of food items and utility bills.”

Seven million layoffs?

As if this was not enough, the market is buzzing with claims regarding layoffs of at least seven million workers employed in the textile sector, including the value-added textile exporters.

Value-Added Textile Exporters Patron Jawed Bilwani said the apathy shown by the government towards the flailing textile sector has aggravated the sufferings of millions of employees.

If the situation failed to improve, the industries will be compelled to shut down and sack at least seven million textile workers as 80 to 90 per cent of the workforce in the textile sector is working on daily wages and contracts. All these employments depend on a consistent stream of export orders, he added.

Speaking about the dearth of export orders, he said rising gas and utility charges, non-availability of gas besides a shortage of dollars and raw materials were playing havoc with textile production in the country.

“Foreign buyers prefer lifting low-priced items and that is why Pakistan is lagging behind exports in comparison with its regional competitors,” Mr Bilwani said. He said he was not hopeful about future orders either, as till now they were not up to expectations.

A textile exporter, who asked not to be named, carefully estimated that 150,000-200,000 people have definitely lost their livelihood during the ongoing economic crisis.

Pakistan Institute of Labor Education and Research (PILER) Executive Director Karmat Ali said a large number of people in the industry are fast losing their jobs and urged the government to form a strategy to address the rising unemployment. The textile sector holds a 60pc share of the country’s total job outlook, he added. Mr Karmat said the majority of people working in the textile sector are not on a permanent basis, as most of the jobs have been outsourced by the companies.

Auto sector

Pakistan Association of Automotive Parts & Accessories Manu­facturers Senior Vice Chairman Usman Aslam Malik said at least 250,000-300,000 workers have been laid off due to a persistent drop in sales of vehicles.

Millat Tractors Limited Executive Director Sohail Bashir Rana said around 2,000 workers were affected owing to a decline in the sale of tractors over the last six months. Mashood Ali Khan, who exports auto parts, blamed economic uncertainty and dwindling sales of vehicles for the spike in unemployment. He said there was a need to control overhead expenses and the soaring cost of raw materials to handle the crisis-like scenario.

The only way forward to save the industries and jobs is the establishment of the National Economic Development Plan after developing a consensus among stakeholders, particularly political parties and industrialists. The former president of the Employers Federation of Pakistan (EFP), Ismail Suttur, said the business in the textile sector has gone down by 50pc since June last year.

“This is just the beginning. If this government continues with its policies, I fear the day when these retrenchments will hit the services sector and will prove disastrous for the breadwinners of Pakistan,” Mr Suttur said.

“If we do not act now, every passing week would push Pakistan further down,” he feared.

Published in Dawn, January 31st, 2023

Automakers suspend production

Aamir Shafaat Khan Published February 1, 2023 

KARACHI: Faced with a demand slump and raw material shortages amid unfavourable economic conditions, Indus Motor Company (IMC) on Tuesday annou­nced a fourth production suspension from Feb 1-14.

Also, Agriauto Indus­tries Ltd (AIL), an auto vendor, announced a partial closure this month due to a sharp decline in demand for parts and accessories from major automakers.

The assembler of Toyota vehicles in a stock filing said it would resume production from Feb 15 on a single shift basis until further notice.

IMC said the State Bank of Pakistan (SBP) on Jan 2 advised commercial banks to prioritise/facilitate imports to specified sectors only, which does not include the auto sector. This has disrupted the entire supply chain and the vendors are unable to supply raw materials and components to the company, IMC said.

The company had kept its production operation suspended from Aug 1-13, Sept 1-16 and Dec 20-30, 2022.

Despite production stoppages and a 52pc drop in sales in IHFY23, IMC shocked its customers by raising prices from Rs280,000 to Rs1.2 million on various models in the second week of this month.

Lucky jacks up prices: Kia Lucky Motor Corporation has raised the price by Rs100,000 to Rs1.3m from Feb 1. Till last month, the company has been offering a price lock option to the customers with immediate delivery.

As per the company’s website, the new price of Kia Picanto Manual and Automatic will be Rs3.2m and Rs3.4m, a rise of Rs100,000 and Rs200,000 respectively.

Bike gets costlier: The country’s no.1 bike assembler, Atlas Honda Ltd (AHL), has raised the price of 70cc-150cc bikes by Rs7,400-30,000 from Feb 1. The new rates of CD-70, CD-70 Dream, Pridor, CG-125, CG125S, CB125F, CB150F and CB150F (Silver) are Rs128,900, Rs137,900, Rs170,900, Rs194,900, Rs230,900, Rs305,900, Rs383,900 and Rs387,900.

United Auto Industries, the country’s second-largest bike assembler, has announced a price hike of Rs6,000-10,000 in 70cc-125cc bikes from Feb 1.

Memon Motor Private Ltd, assembler of Super Star Motorcycle, has raised the price of 70cc-125cc bikes by Rs6,000 from Jan 30. NJ Auto Industries, maker of Super Power bikes, has made a price jump of Rs5,000-8,000 in 70cc-200cc bikes from Jan 27.

Published in Dawn, February 1st, 2023