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State Bank with positive views about Pakistan economy

Muhammad Arif : Chairman Centre of Advisory Services for Islamic Banking and Finance (CAIF), Former Head of FSCD SBP, Former Head of Research ArifHabib Investments and Member IFSB Task Force for development of Islamic Money Market, Former Member of Access to Justice Fund Supreme Court of Pakistan

Imran Khan the current PM is giving Pakistan many twists and u turns. Very late in 2021 on Kashmir which is the focal point of Pakistan Imran Khan has offered Kashmiris another option to choose themselves tto have their own and sovereign independent state.
The politics of Pakistan takes place within the framework established by the constitution formed in 1973. The country is a federal parliamentary republic in which provincial governments enjoy a high degree of autonomy and residuary powers. Executive power is vested with the national cabinet which is headed by Prime Minister of Pakistan (Imran Khan; 2018-), who works coherently along with the bicameral parliament and the judicature. Stipulations set by the constitution provide a delicate check and balance of sharing powers between executive, legislative, and judicial branches of the government.
The head of state is the president who is elected by the Electoral College for a five-year term. Arif Alvi is currently the president of Pakistan (2018-). The president was a significant authority until the 18th amendment, passed in 2010, stripped the presidency of its major powers. Since then, Pakistan has been shifted from a Semi-presidential system to a purely parliamentary government. Since the amendment, the president’s powers include the grant to pardon, and the ability to suspend or moderate any sentence passed by any court or authority
The Government consists of three branches: executive, legislative and judicial.
Pakistan is a multiparty democracy where several political parties compete for seats in the National and Provincial assemblies. However, as an aftermath of the Fall of Dhaka in 1971, a two-party system was inculcated between the Peoples Party and Muslim League. There has also been a sharp rise in the popularity of centrist parties such that PML-Q and PTI. The Military establishment has played an influential role in the country’s politics. From 1950s to 2000s, several coups were staged that overthrew democratic regimes. However, after the resignation of President Pervez Musharraf in 2008, a sharp line has been drawn between the Military and politics and Pakistan is moving closer to becoming a liberal democracy.
However, critique argue that country is moving towards strict hybrid system, a system in which military and political leaders take collective decisions, thus affecting overall power structure of civilian government. Meanwhile many proponent stands with the change and depicts it as a needed change in the country’s system to bring in more civilian voice in the policy making process. Many praise the efforts and give example of how successful this system has been like National Command and Control Center (NCOC) to track Covid-19 response effectively at the state level, National Locust Control Centre (NLCC) to counter the locust attack and ensures food security in the country
The Economist Intelligence Unit rated Pakistan a “hybrid regime” in 2019.[
The president of Pakistan, in keeping with the constitutional provision that the state religion is Islam, must be a Muslim. Elected for a five-year term by an Electoral College consisting of members of the Senate and National Assembly and members of the provincial assemblies, the president is eligible for re-election. But no individual may hold the office for more than two consecutive terms. The president may resign or be impeached and may be removed from office due to incapacity or gross misconduct by a two-thirds vote of the members of the parliament. The president generally acts on the advice of the prime minister but has important residual powers.
One of the most important of these powers—a legacy of General Muhammad Zia-ul-Haq—is the president’s power to dissolve the National Assembly “in his discretion where, in has arisen in which the Government of the Federation cannot be carried on in accordance with the provisions of the Constitution and an appeal to the electorate is necessary.” This power has twice been granted —by the Eighth Amendment in 1985 and by the Seventeenth Amendment in 2003—and has twice been revoked—by the Thirteenth Amendment in 1997 and by the Eighteenth Amendment in 2010. Despite this most recent power-stripping, the President remains the ex officio chair of the National Security Council, as per the National Security Act 2004.
The prime minister is appointed by the members of the National Assembly through a vote. The prime minister is assisted by the Federal Cabinet, a council of ministers whose members are appointed by the president on the advice of the prime minister. The Federal Cabinet comprises the ministers, ministers of state, and advisers. As of early 1994, there were thirty-three ministerial portfolios: commerce; communications; culture; defense; defense production; education; environment; finance and economic affairs; food and agriculture; foreign affairs; health; housing; information and broadcasting; interior; Kashmiri affairs and Northern Areas; law and justice; local government; minority affairs; narcotics control; parliamentary affairs; petroleum and natural resources production; planning and development; railways; religious affairs; science and technology; social welfare; special education; sports; state and frontier regions; tourism; water and power; women’s development; and youth affairs.
The Federal Shariat Court (FSC) of Pakistan is another court which has the power to examine and determine whether the laws of the country comply with Shari’a law.
At times there have been claims of foreigners getting very close to Pakistani political leaderships and deep state dispensations and have had possible indirect influential roles. Nahid Iskander Mirza (1919-2019), also cousin to Nusarat Bhutto, who was allegedly the wife of a military attaché at the Iranian embassy in Pakistan, married Iskander Mirza, erstwhile president of Pakistan and claimed to have been instrumental in meeting out boundary concessions to Iran. Joanne Herring, an American socialite, is widely believed to have influenced General Zia Ul Haq’s foreign policies. Since the 2010s another American socialite Cynthia D. Ritchie claims her close association with Pakistani establishment.
Like other countries in the region, Pakistan faces main challenge in resolving its economic issues with wider fiscal deficit and people getting more poor and poor. No member of Imran Khan Government has still found any way out to get away from this trend.
However, on 27th July 2021 SBP came up with optimistic views by keeping the main interest rate at 7%..As a result, growth is projected to rise from 3.9 percent in FY21 to 4 – 5 percent this year, and average inflation to moderate to 7 – 9 percent this year from its recent higher out-turns. Current account deficit is in a sustainable range of 2 – 3 percent of GDP in FY22. In FY22, growth is expected to pick up further, supported by measures announced in the budget, portfolio and FDI inflows, Pakistan’s external financing needs of around $20 billion are expected to be more than fully met in FY22The FY22 budget is expected to be broadly inflation-neutral as most tax rates have been left unchanged. The government expects the budget deficit to decline from 7.1 percent of GDP last year to 6.3 percent in FY22, on the back of strong growth in both tax recoveries. Inflation fell from 11.1 percent (y/y) in April to 9.7 percent in June. The recent decline in inflation is consistent with the MPC’s view that recent price pressures are largely supply-driven and transient. Headline inflation should begin to dissipate more visibly in the second half of the year when the February electricity tariff increase drops out of the base, converging to the 5 – 7 percent target range over the medium term. The key risk that could lower inflation is resurgence in the pandemic domestically and globally. Conversely, risks that could raise inflation include higher-than-expected global commodity prices, especially if these are coupled with upward adjustments in the PDL or domestic energy tariffs, as well as fiscal slippages that lead to stronger demand-side pressures through the year


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