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PAKISTAN’S INFLATION SKYROCKETS TO OVER 11%

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Inflation in Pakistan skyrocketed to over 11 per cent amid a surge in food prices amid the Ministry of Finance’s failure to give a realistic and professional assessment of the increasing prices in its monthly reports.

The Consumer Price Index jumped to 11.1 per cent in April over the same month a year ago. It was the highest rate of inflation in the past 13 months. In February 2020, inflation had jumped to 12.4 per cent, reported The Express Tribune. The inflation rate is significantly higher than 8 to 9.5 per cent projection given by the Ministry of Finance four days ago in its monthly bulletin.

Sources told The Express Tribune that the economic adviser wing of the finance ministry knew about these estimates but it still published an unrealistic figure. The market expectation was that the inflation would remain around 11 per cent due to abnormally high prices of food items in Ramazan.

The electricity rates in Pakistan were 29 per cent higher than a year ago and almost all kitchen items recorded a double-digit rise in prices, including wheat, sugar and wheat flour, according to PBS data.

Chicken prices in April recorded almost 100 per cent growth in prices, followed by 81 per cent increase in prices of tomatoes, 42 per cent eggs and wheat prices were up by 27 per cent over a year.

Reporting a significant increase in inflation in both rural areas and the cities, with food inflation also rising to 15.7 per cent – a jump of over 4.2 per cent within a month, according to the PBS.

The Express Tribune reported that the inflation rate for the housing, water, electricity, gas and fuel group – having one-fourth weight in the basket – increased to 9.7 per cent last month.

Meanwhile, the retail market prices reach to wholesale prices level in four to six months, indicating that the prices will remain high in near term in Pakistan.

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IMRAN KHAN URGES BALOCHISTAN GOVERNOR TO RESIGN

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Prime Minister Imran Khan has threatened Balochistan Governor retired Justice Amanullah Khan Yasinzai to resign from his post, saying he intends to appoint a new governor in view of the “transformed political challenges” facing Pakistan.

In a letter to Yasinzai, Khan said that it had been ‘a pleasure’ to have worked with him, who strived for the creation of a welfare state and especially looking after the problems of people in the province, Dawn reported. “However, given the current political situation, dexterity and deftness is needed at this juncture for a delicate balancing act to simultaneously ensure political inclusion and fulfilment of our commitment towards the people of Pakistan,” he said.

“I intend to appoint a new governor in Balochistan and would, therefore, request you to resign,” the premier added.

Khan stressed that the transformed political challenges faced by Pakistan required a change, adding it does not reflect adversely on Yasinzai’s competence.

Yasinzai was appointed as the governor of Balochistan by President Dr Arif Alvi on the recommendation of Prime Minister Imran in October 2018, reported Dawn.

Imran Khan’s request to the Balochistan Governor comes after his one-day visit to Quetta, where he said his government was keen to bring about a revolution in Balochistan through projects of infrastructure and human development.

The Balochistan Governor served as He served as the chief justice of the Balochistan High Court (BHC) from 2005 to 2009.

In 2009, references against Yasinzai were sent to the SJC in accordance with the July 31, 2009, judgement of the Supreme Court regarding PCO judges, Dawn reported.

Despite Balochistan being rich in minerals and natural resources, it is Pakistan’s poorest province and regularly ranks at the bottom of the country’s socioeconomic indicators on healthcare, education, and population welfare.

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RISKS OF CHINA’S LOCAL DEBT GROW AS GOVT SCALES BACK COVID-19 STIMULUS

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As China has started scaling back the COVID-19 stimulus worth trillions of yuan launched last year, local government debt and corporate bond defaults are emerging as the prime financial risks for the communist government.

Chinese authorities are currently on high alert for financial problems, particularly in some western and northern regions, whose ability to repay credit is strained amid stimulus tapering and a decline in revenue due to the pandemic and government-mandated tax cuts, South China Morning Post (SCMP) reported. “Local debt issues, which reflect the resource-funded growth model, are problematic,” said Wu Xiaoqiu, a professor of finance at Renmin University of China, said at a seminar last week.

Fears of a debt bubble in China have already put the brakes on new developments, particularly those with high liabilities.

Earlier last month, the provincial government of Shaanxi in western China said it had suspended construction on an intercity high-speed railway network, which is estimated to be worth 50 billion yuan, after “considering fundraising and risk prevention”.

Shaanxi reported outstanding debt of 743.3 billion yuan by the end of 2020, SCMP reported citing China Local Government Bond Market Access, a newly launched government website to track public debt. The figure represents about 28.4 per cent of China’s GDP.

Beijing set a much lower-than-expected growth target of 6 per cent for this year, despite estimates from private economists that expansion could reach 8 per cent.

Many economists and policy advisers have warned that increasing debt in China could weigh on the recoveries of some financially vulnerable regions.

However, the United States and some European countries have also loosened their financial conditions to fight the economic effects of the virus, SCMP reported.

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UN warns Myanmar is on the brink of economic disaster due to coup, Covid-19

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The United Nations on Thursday warned Myanmar that it is on the brink of economic disaster due to the double shock of the military coup and COVID-19 pandemic.

Citing a new UN Development Program (UNDP) report, CNN reported that almost half of Myanmar’s population could be forced into poverty by the end of this year. As per the report, if the security and economic situation does not stabilize soon, up to 25 million people, 48 per cent of Myanmar’s population, could be living in poverty by 2022.

Rising food costs, significant losses of income and wages, the crumbling of basic services such as banking and health care, and an inadequate social safety net is likely to push millions of already vulnerable people below the poverty line of USD 1.10 a day — with women and children among the hardest hit.

Myanmar was hit with the double shock of the coronavirus pandemic and Myanmar’s military coup.

Lockdowns and containment measures disrupted supply chains, so businesses — especially in retail, manufacturing and exports, as well as smaller businesses, market sellers, hairdressers and tailors — suffered. By December last year, more than 420,000 migrant workers had returned home.

Urban poverty is expected to triple as the towns and cities have been hardest hit by COVID-19 and remain the focus of the most severe military crackdowns, reported CNN.

According to the study, women and children will bear the heaviest brunt. Myanmar already has high child poverty rates and the combined crises are “putting an entire generation in peril”, the UN Children’s Fund (UNICEF) said.

Moreover, a humanitarian crisis is unfolding as a result. The UN World Food Program last week warned “hunger and desperation” are rising in Myanmar and predicted that up to 3.4 million people will be suffering across the country in the next six months.

“Overall, Myanmar is on the brink of economic collapse and risks becoming Asia’s next failed state,” the UNDP report said.

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Biden angers Turkey over Armenian genocide remarks

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US President Joe Biden last month made good of his campaign pledge to formally recognize as genocide the deportation and mass killing of approximately 1,500,000 Armenians by the Ottoman Empire during World War I. Reacting, Turkey rejected Biden’s decision to formally recognize the Armenian genocide and accused the United States of trying to rewrite history. Turkey’s Foreign Ministry summoned the US Ambassador to Turkey to express displeasure, pointing out that Biden’s decision “caused a wound in relations between the two countries that is difficult to repair.” Foreign Minister Mevlut Cavusoglu defiantly said: “We will not take lessons from anyone on our history.”

Except Ronald Regan, back in 1981, all US Presidents have carefully avoided the Armenian genocide issue because they feared the damage that it would do to relations between the US and Turkey, as over the years Ankara has doggedly rejected accusations about the Armenian genocide. Ankara admits that about 300,000 Armenians died at that time, but insists that although during World War I many Turks and Armenians died, there was no deliberate genocide policy. It should be noted that about 30 countries officially recognize the Armenian genocide.

Armenian Prime Minister Nikol Pashinyan in a letter to Biden said that recognition of the genocide “is important not only in terms of respecting the memory of 1.5 million innocent victims, but also in preventing the repetition of such crimes.”

It is remarkable that Joe Biden, who had avoided since his inauguration three months ago to make a telephone call to Turkish President Tayyip Erdogan, did that on Friday, giving him advance warning of his decision to recognize the Armenian genocide the following day. Biden also stressed his desire to improve the relationship between the two countries and to find “effective management of disagreements.” The two men agreed to meet next June on the sidelines of a NATO summit.

In the past, the Turkish government viewed references to the Armenian genocide as “an insult to Turkishness” and people faced charges and were sent to jail. The Turkish Foreign Ministry rejected Biden’s statement, saying it distorts the historical facts and stressed that “it will never be accepted in the conscience of the Turkish people, and will open a deep wound that undermines our mutual trust and friendship.”

The usual practice followed by Ankara when a country acknowledged the genocide was to recall its diplomats from that country, e.g. its ambassadors to Germany and the Vatican. It is highly unlikely, however, that it will do this with the Turkish Ambassador to the United States.

But why Biden took the bold decision to proclaim the mass deportation and killing of hundreds of thousand Armenians “a genocide”, and decided it is high time to call a spade a spade, although he knew very well that it would cause the wrath of Turkey’s autocratic President and anger the majority of ordinary Turks?

Jenny White of the Institute for Turkish Studies, Stockholm University, explains: “President Biden has made democracy and human rights a central tenet of his administration. At this point, the Biden administration has nothing to lose by acknowledging Turkey’s failure in these respects. What could nudge Turkey to change? Turkey needs the U.S. more than the U.S. needs Turkey right now.”

Certainly, it is too early to know the fallout of Biden’s announcement, but it is clear that relations between the US and Turkey are rather chilly. The US at the end of last year imposed sanctions on Ankara concerning the acquisition of the Russian S-400 air defense system, while Turkey has been removed from the list of “global participants” on the US F-35 joint strike fighter program.

President Tayyip Erdogan has lost a number of allies in recent years, while his popularity especially among young people is decreasing. His critics blame Biden’s recognition of the genocide on Erdogan’s aggressive foreign policy, which has alienated many of Turkey’s traditional allies, including Israel.

The Spokesman for the main opposition Republican Party Faik Oztrak described Biden’s proclamation as “a historical error” but at the same time pointed out that “these hostile statements are an abject example of what Tayyip Erdogan party’s short-sighted foreign policy has brought Turkey.”

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US FORCES HAND OVER KEY BASE TO AFGHAN ARMY

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The U.S. forces in Afghanistan on Sunday handed over a key operating base to Afghan National Army in restive southern Helmand province, reported local media.

“Camp Antonik in Helmand province was officially handed over to the Afghan army’s 215 Maiwand Corps on Sunday,” Tolo News TV reported. With no change in its name, the camp will be used as a base for Afghan Special Operations Forces, the report said.

Helmand province, notorious for poppy growing, is a known Taliban insurgents’ stronghold.

The violence lingers in war-torn Afghanistan as the United States and NATO troops have been leaving the country.

About 3,500 U.S. forces and 7,000 NATO troops will be withdrawn before Sept. 11, the day which is the 20th anniversary of the terrorist attacks that drew the United States into war in Afghanistan.

VOILENCE CONTINUES

As many as 81 Taliban terrorists were killed and 52 others were injured across Afghanistan in the past 24 hours, the Afghan Defence Ministry said on Sunday. The Afghan National Defense and Security Forces (ANDSF) carried out operations in several provinces including Ghazni, Badghis, Kandahar, Helmand, and Takhar.

“81 Taliban were killed and 52 others were wounded in Kunar, Ghazni, Badghis, Balkh, Kandahar, Helmand, Faryab, and Takhar provinces in the reciprocal operation of Afghan National Defense and Security Forces (ANDSF) during 24 past hours. In addition, 19 IEDs were which were placed by the Taliban on public roads were destroyed and defused,” Afghan Defence Ministry tweeted. This recent surge in operation from the Afghan national forces comes as the US troops have formally started their drawdown from the war-torn country.

On Saturday, Afghanistan’s Acting Defense Minister General Yasin Zia had said that the US and the North Atlantic Treaty Organisation (NATO) forces have started their withdrawal from the country – as the May 1 deadline agreed in Doha deal has approached.

“The withdrawal of foreign forces has practically started,” he said. “They will hand over the areas where their logistics issues have been addressed will be handed (to Afghan forces) by the end of this week,” Zia said, as quoted by Tolo news.

The United States has around 2,500 troops in Afghanistan and as per Biden administration’s announcement last month, their number will be zero by September 11.

On Friday, the representatives of the extended “Troika”, comprising the US, Russia, China, and Pakistan met in Doha and discussed ways to support intra-Afghan negotiations and help the parties reach a negotiated settlement, along with a permanent and comprehensive ceasefire.

“We expect the Taliban to fulfill its counter-terrorism commitments, including preventing terrorist groups and individuals from using Afghan soil to threaten the security of any other country; not hosting these groups and preventing them from recruiting, training, and fundraising. We expect the Afghan government to continue counterterrorism cooperation with the international community,” the group of countries said in a joint statement.

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CYCLONIC CIRCULATION LIKELY TO PERSIST OVER EAST INDIA DURING NEXT 4-5 DAYS: IMD

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NEW DELHI: A cyclonic circulation lies over northwest Madhya Pradesh and the trough is likely to persist over east India during the next four to five days, said the India Meteorological Department. “A cyclonic circulation lies over northwest Madhya Pradesh and a trough runs from this circulation to Manipur at lower levels. A trough in westerlies roughly along long 90°E to the north of lat 25°N in mid-levels. The trough is likely to persist over east India during the next four to five days,” said IMD in a tweet. It added, “Isolated heavy rainfall is also likely over Sub Himalayan West Bengal and Sikkim, and Assam and Meghalaya during 2 to 5 May; over Gangetic from 3 to 5 May and over Odisha and Arunachal Pradesh on 4 May.” It also predicted that isolated heavy rainfall is likely over Kerala and Mahe on 4 to 6 May and south interior Karnataka from 4 to 6 May and over coastal Karnataka on 5 May.

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