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Pakistan bans ethnic Pashtun party PTM; Political insecurity looming

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Imposition of ban on Pushtoon Tahafuz Movement (PTM) has made surprising its stalwarts and activists at the time when they are busy in finalizing of arrangements in connection with three days, Pushtoon Jirga scheduled at Jamrud Khyber from Friday.

The ban imposed/notified by the Federal Government through its interior ministry under Anti-Terrorism law of 1997 law is being opposed and criticized by Human Rights activists and analysts. Pakistan Interior Ministry in a statement said that the PTM has been included on the list of proscribed organizations under the country’s anti-terrorism laws, because of its involvement in “certain activities that are prejudicial to the peace and security of the country.”

Former Interior Secretary Khyber Pakhtunkhwa Syed Akhtar Ali Shah believes it misuse of anti-terror law as, “PTM is purely a political organization, raising voice in favor of its concerns through political and non violent ways.” On the other hand, he said, “government organs are silent and helpless towards those hardliner religious groups, which are publicly following violent ways. In this respect, he diverted attention towards TLP, which since 2016-2017 involved violent means by issuing murder edicts of former Prime Minister Mian Muhammad Nawaz Sharif and ex-Interior Minister Rana Sana Ullah. On such grounds, TLP also banned a couple of years but the federal government had withdrawn the decision on Punjab request. Instead of banning PTM, the government must address its demands, which may be helpful.  

Pakistani forces fired tear gas, beaten and arrested PTM activists

On the other hand, the volunteers and supporters of PTM from all over Khyber Pakhtunkhwa, especially from terrorism and violence hit regions of Waziristan, Swat, Khyber, Bajaur and Bannu regions are pouring in to help in arrangements. 

Recently, the activists and volunteers of PTM had organized their tent on the site, whereas a three days Pakhtoon Quami Jirga will be commenced from October 11 next. 

However, the camp was destroyed by the Pakistani police personnel. In the wake of the situation, police action included firing tear gas shells, beating and arresting the activists throughout. Moreover, heavy contingents of police force had deployed earlier on main Pak-Afghan Highway, continuing firing of tear gas shells against them. PTM activists resisted the move with pellet-blows and succeeded in maintaining occupation of the site, where they resumed installation of tents and other arrangements. 

But the police resorted to firing of tear gas shells against the PTM organizing camp in accordance with directives from the Interior Ministry of the Federal Government. Soon after, Chief Minister through a brief social media disowned police action but later on Khyber Pakhtunkhwa Home and Tribal Affairs through a notification directed police force for action against the PTM activists on the grounds of what it called “found involved in patronizing and assisting incitement of hatred and contempt against the state and its institutions, while exploiting sectarian and ethnic sentiments and also use of literature, print and electronic and other materials for the purpose.” 

Supporters and activists of Pashtun Tahaffuz Movement take part in a protest against the military in Khyber Pakhtunkhwa province [File: (AFP]

The leader of PTM, Manzoor Pashteen through a video message has directed all workers and supporters to reach in Jamrud for maintaining occupation of the site and ensuring holding of peaceful gathering scheduled on October 11 next.           

At the same time, Pakistan security forces also engaged in direct clashes with the supporters of Imran Khan, the former jailed Prime Minister of Pakistan. Khan is also leader of PTI political party.

Pakistan forces also arrested and beaten PTI members

At the moment there is a complete deadlock between federal and Khyber Pakhtunkhwa Government after arrest of Chief Minister Ali Amin Gandhapur and takeover of Khyber Pakhtunkhwa house Islamabad by armed forces. Islamabad police has confirmed registration of FIR against leading PTI leaders. However, names of nominees nominated in FIR yet to be made public.

The situation is turning worse after the expiry of an injured policeman who succumbed in Islamabad hospital and summoning of Khyber Pakhtunkhwa Assembly for discussing the situation erupted with arrest of Chief Minister and several others.

Though the PTI leaders are accusing the federal government for the arrest of deposed Prime Minister Imran Khan and other top PTI leaders, the matter in fact rests between the PTI and powerful military establishment. At the moment, the effective and powerful military establishment is not willing either to forgive deposed Prime Minister Imran Khan or to make him free. But in a bid to get the release of Imran Khan and his spouse, the PTI leadership is building pressure and criticism against the PML(N) led federal government.

According to an FIR registered by Islamabad police around 105 top persons including PTI leaders have been arrested, over 40 vehicles including Khyber Pakhtunkhwa government controlled RESCUE 1122 vehicles and ambulances were also impounded by Islamabad and Punjab Police. The top Executive officer Chief Secretary Khyber Pakhtunkhwa (nominated and posted by Federal Government) has also directed Secretary Relief for submitting detailed reports of RESCUE resources (vehicles and personnel) used in PTI agitations/protests against the federal government.

Some of top PTI leaders are publicly reaffirming support and loyalty to Imran Khan and Ali Amin Gandhapur but the internal situation is different whereas some of them have stock of reservation over the confrontation-focused policies against military establishment and federal government. Just for filling the blanks or signing enrolment, provincial ministers, MP’s and other office holders are witnessed in selfies but later they disappear during firing of tear gas shells and lathi charges.

Politico-turmoil in Pakistan is detrimental to the safety of region aimed Middle East tension

Despite Khyber Pakhtunkhwa Governor’s frequent appeals for intervention, the federal government is playing the role of silent spectator. This mysterious role on the part of the federal government is also generating stock of questions and confusions. No one can deny the fact that Chief Minister Ali Amin Gandhapur is helpless before Imran Khan and reluctant to settle the issues through table talks with the federal government but it is also a fact that unlike of past, the federal government had failed in playing its due role in settling the issues or ensuring smooth working relations with Khyber Pakhtunkhwa.

Politico-turmoil in Pakistan, especially allowing fueling an anarchy like situation in Khyber at the time when war clouds from the Middle East are hitting the rest of Asian Regions, relations between Kabul and Islamabad are  deteriorating day by day. Almost all powers and authorities have been monopolized by the powerful military establishment and no one amongst the political squad is capable of playing the role as mediator for reconciliation on all internal and external fronts. Almost all people from all over the country are uncertain and disappointed. Worries of common men are intensifying with each passing day, which is harmful for the very future of the country and its people.

ASIA

How will Trump’s potential tariffs affect Southeast Asia?

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Southeast Asia is worried about Donald Trump’s threat of universal tariffs and a new trade war with China. Five of the region’s six largest economies run a trade surplus with the United States.

But experts say the situation may not be so bad. The region, which tries to remain geopolitically neutral, saw an increase in gross trade with both China and the U.S. between 2017 and 2020 during Trump’s first presidency. Vietnam, Indonesia, Malaysia, and Thailand have benefited as companies from China, Japan, South Korea, Taiwan, and the U.S. have expanded their production bases in Southeast Asia to avoid U.S. tariffs.

Experts say exports and economic growth will take a hit in the short term, but the region could benefit from trade diversion and substitution.

What is Trump’s tariff threat?

The goal of Trump’s trade policy is to bring manufacturing jobs back to the U.S. and decouple supply chains from China. Trump and his advisers claim that China’s trade advantage is due to “currency manipulation, intellectual property theft and forced technology transfer”.

During his first term, Trump used executive powers to impose tariffs of up to 25% on $250bn of electronics, machinery and consumer goods imported from China. Beijing retaliated with similar measures on U.S. agricultural, automotive and technology exports.

Now Trump has proposed a 60 per cent tariff on all Chinese goods entering the U.S. and tariffs of up to 20 per cent on imports from everywhere else.

How bad could it be for Southeast Asia?

According to Oxford Economics, about 40 per cent of Cambodia’s exports go to the U.S., making it the largest exporter in Asean as a percentage of total exports, followed by Vietnam with 27.4 per cent and Thailand with 17 per cent. Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce, said the Thai economy could take a 160.5 billion baht ($4.6 billion) hit if Trump fulfils his promises.

Vietnam has the world’s fourth-largest trade surplus with the United States. This imbalance has been growing rapidly as Chinese, Taiwanese and South Korean companies have used Vietnam to avoid Trump-era tariffs. Vietnam’s fortunes could change just as quickly, especially if the U.S. continues to classify Vietnam as a ‘non-market economy’, which requires higher tariffs.

Uncertainty over Trump’s tariffs could cause companies to pause or halt investment plans in Southeast Asia. U.S. companies accounted for about half of Singapore’s $9.5 billion in fixed-asset investment last year, according to the city-state’s Economic Development Board. In his congratulatory letter to Trump, Prime Minister Lawrence Wong was quick to remind him that the United States enjoys a “consistent trade surplus” with Singapore.

Any blow to the Chinese economy will have repercussions for Asean countries that depend on Chinese consumption, export demand and tourism. A reduced appetite for Chinese goods will also affect Southeast Asian suppliers of inputs to Chinese producers. Indonesia, Southeast Asia’s largest economy, will suffer the most because it exports 24.2 per cent of its goods to China, mainly commodities.

Unable to send their goods to the U.S., Chinese exporters may turn to Southeast Asia, where governments have faced complaints from local producers hurt by dumping in metals, textiles, and consumer goods.

What is Southeast Asia’s advantage?

Southeast Asia’s current manufacturing boom started because of the trade war. Over time, analysts expect trade substitution and diversion to outweigh the hit to growth.

“We think a stronger crackdown on China could lead to more supply chain diversion as Chinese companies trade and invest more in Asia,” said Jayden Vantarakis, head of ASEAN research at Macquarie Capital.

“Electric vehicle factories, which some Southeast Asian governments are aggressively pursuing, could provide an economic buffer. Demand for EVs is also growing outside the U.S., so I think there could be a net benefit for Indonesia. Smaller countries that are trying to be carbon neutral, especially as petrol prices get more expensive, will try to take over the supply and buy more electric cars,” said Sumit Agarwal, a professor at the National University of Singapore’s School of Business.

Trump’s promised tariffs could embolden Asean governments to impose anti-dumping duties on Chinese goods, as Thailand did on rolled steel this year. Stricter U.S. rules of origin could also give governments an opportunity to ensure that more high-value parts are produced and assembled locally.

How will Southeast Asian currencies and markets be affected?

Trump’s tariffs could reduce pressure on Southeast Asian central banks to ease monetary policy further.

“Essentially, Trump’s victory is inflationary for the world because of his planned tariffs, so the global monetary normalization or easing cycle will probably not be as sharp as previously thought, including in the Philippines,” said Miguel Chanco, chief emerging Asia economist at UK-based Pantheon Macroeconomics.

Speaking to Nikkei Asia, Chanco said Southeast Asian currencies will not strengthen as much as previously expected, partly because markets are re-pricing the pace of easing by the U.S. Federal Reserve and thus the dollar will continue to strengthen.

Among Southeast Asia’s six major economies, the Thai baht and Malaysian ringgit have been the worst-performing currencies since Trump’s victory, losing 3.2 per cent and 2.9 per cent respectively against the U.S. dollar through Wednesday.

Thai brokerage InnovestX recommended stocks that would benefit from a strong dollar and weak baht. These include companies with significant export earnings, such as CP Foods and Delta Electronics, or tourism-related companies such as Airports of Thailand, property developers and hoteliers.

Governments are already taking steps to reduce their over-dependence on the U.S. or China by deepening ties with other countries and regions and emphasizing their neutrality.

Southeast Asian economies in particular are also expected to focus on building resilience by strengthening intra-ASEAN trade.

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ASIA

Japan’s exports rise despite global risks, boosted by China

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Japan’s exports rose more than expected in October, driven by strong demand from China and other parts of Asia, despite growing uncertainties in global markets.

Exports increased by 3.1% year-on-year, led by significant growth in shipments of chip-making equipment, particularly to China, according to the Finance Ministry’s report on Wednesday. This marked a rebound following the first drop in 10 months in September. October’s figures exceeded economists’ forecasts of a 1% rise and were also bolstered by increased shipments of medical products to the United States.

Meanwhile, imports edged up by 0.4%, defying expectations of a 1.9% decline. As a result, the trade deficit widened to 461.2 billion yen ($2.98 billion), compared to 294.1 billion yen in the previous month.

This stronger-than-expected export performance has raised optimism about Japan’s economic recovery. Although the country’s gross domestic product (GDP) expanded for the second consecutive quarter through September, the pace of growth has been tempered by the drag from net exports.

“Today’s data raises hopes that external demand will revive in the October-December quarter,” said Hiroshi Miyazaki, Senior Research Fellow at the Itochu Research Institute. “The Chinese government’s stimulus measures have stabilized its economy and reversed the prior decline.”

Exports to China rose by 1.5% last month, rebounding from a 7.3% drop in September, with semiconductor manufacturing equipment exports surging by nearly a third. These gains align with signs that China’s stimulus policies are beginning to yield results, driving growth in certain sectors and boosting consumer spending.

Notably, Japanese exports grew despite the yen’s strengthening against the dollar, averaging 145.87 yen per dollar in October—2% stronger than the previous year, according to ministry data.

The export rebound occurs against a backdrop of heightened concerns about global trade policies. Business leaders are bracing for the potential return of Donald Trump to the White House, with fears that his proposed tariffs—60% on imports from China and 20% on other nations—could disrupt international commerce.

Some regions are already experiencing a slowdown. Shipments to the United States and Europe declined by 6.2% and 11.3%, respectively, in October.

The Bank of Japan (BoJ) is closely monitoring these developments. BoJ Governor Kazuo Ueda noted on Monday that while the Federal Reserve’s prospects for a soft landing have improved, risks tied to the U.S. economy and their impact on global markets require careful consideration.

The most pressing concern for Japan’s trade outlook is the impact of potential U.S. tariffs. Historical data from the U.S.-China trade war (2018-2019) suggests that a 1% increase in export prices, including tariffs, led to a 0.35 percentage-point reduction in profit margins for Chinese exporters, according to research from Stanford University’s Centre for Chinese Economics and Institutions. A similar scenario could hurt Japanese firms’ profitability, counteracting gains from the yen’s depreciation.

“We are not yet at a stage where Trump’s tariff policy is clearly impacting export volumes or exporters’ behavior,” Miyazaki told The Japan Times. “However, there remains significant uncertainty, and we must continue to monitor the policy stance of the next Trump administration,” he added.

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IMF reviews Pakistan’s $7bn bailout

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An International Monetary Fund (IMF) team conducted an unscheduled visit to Pakistan last week to assess the country’s progress on the terms of its $7 billion bailout package. The surprise visit, coming less than two months after the loan’s approval, has raised questions about the future of the bailout program. IMF staff are expected to present their findings to the Washington-based executive board for review.

What prompted the IMF’s unexpected visit to Pakistan?

Several officials, speaking to Nikkei Asia on condition of anonymity, highlighted key factors prompting the visit. These included a $685 million shortfall in the government’s tax collection target for the first quarter of the current fiscal year and a $2.5 billion deficit in the external financing required under the bailout terms. Compounding these issues was the failed sale of Pakistan International Airlines (PIA), a key component of the IMF-recommended privatisation drive.

While routine IMF program review visits are standard, the timing of this visit—just seven weeks after board approval—has raised concerns. “This suggests significant difficulties in implementing the program,” said Naafey Sardar, an economics professor at St. Olaf College in the United States, speaking to Nikkei Asia.

Ikram ul Haq, a lawyer specializing in economic and tax policy, added, “The reality is that the government’s promises to the IMF have not been fulfilled.”

What were the key issues discussed?

The IMF raised the issue of the tax gap and urged action to ensure that Pakistan meets its annual tax collection target of $46 billion.

Islamabad was also asked to engage with Saudi Arabia and China, the largest investor, to bridge the external financing gap. Promised energy sector reforms and the repayment of billions of dollars of debt owed to mostly Chinese-backed power plants in Pakistan were also discussed.

Another issue was for the IMF to press provincial governments for more funds, such as the Benazir Income Support Programme, which provides a $2.1 billion annual cash transfer for poverty alleviation, currently paid for by the central government.

How does agricultural income tax fit into this picture?

As part of the loan agreement, Pakistan’s provinces missed an end-October deadline to harmonize their agricultural income tax laws with the federal income tax.

The IMF had previously said that Pakistan’s loan agreement would be in jeopardy if agricultural income remained largely untaxed. During the meetings, provincial government officials told the IMF that they would face significant difficulties in implementing a higher tax.

Economist Aqdas Afzal said such a move would face significant opposition from big landowners, who are disproportionately represented in the federal and provincial assemblies.

“Given the weak mandate of the current government, a higher agricultural income tax is unlikely as it could trigger major social and political unrest,” he added.

What assurances has the government given to the IMF?

Pakistan has assured the IMF that it will increase the provincial agricultural income tax rate by up to 45 percent. It has also pledged to meet annual tax collection targets and to continue reforms in the energy sector and state-owned enterprises.

“This is an ongoing dialogue process and there have been discussions [with the IMF] on energy and SOE reforms, the privatization agenda and public finance,” Pakistan’s Finance and Revenue Minister Muhammad Aurangzeb told local media.

Haq, a tax expert, said the government’s primary focus would be on meeting the six-month revenue collection target set by Pakistan’s Federal Board of Revenue, a government agency that regulates and collects taxes.

What are the challenges ahead for Pakistan’s loan agreement?

Meeting tough tax targets and implementing structural reforms are major hurdles for the government to overcome.

The IMF has previously cancelled other loan programmes when conditions were not met. Payments to Pakistan could be suspended or stopped altogether, which would be a serious blow to a country struggling with a sputtering economy.

The IMF is pressing for cuts in government spending.

“Structural reforms are being resisted by vested interests, making efforts to meet IMF conditions even more difficult,” Haq said.

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