Challenges and achievements during 2014

Trials on all fronts

Like the previous years, 2014 continued to be marred by acts of terrorism consuming human lives, with all its devastating repercussions for the society and the economy. It witnessed 368 episodes relating to terrorists attacks and counter terrorism responses by the security establishment and law enforcing agencies, which resulted in deaths of 851 civilian, 320 security forces and 2,647 terrorists, beside injuries to more than two thousand persons. Some the major acts of terrorism included assault on a local court in Islamabad on March 3 ;cross-border attack by militants on May 31; attack on Jinnah International terminal of Karachi airport on June 8; attack on Quetta air base on August 15; capturing of Pakistan Navy frigate PNS Zulfiqar on September 17 in an attempt to attack the US fleet with on-board missiles which was thwarted by the forces; suicide attack on Wagah border on November 2 and attack on Army Public School on December 16, killing 141 persons including 132 school children.

Although the Pakistan Air Force had been hitting TTP hideouts and other targets in North Waziristan and other areas as and when required, yet it was the terrorist attack on Karachi airport which led to the initiation of Zarb-e-Azb in Waziristan on June 15, causing displacement of more than a million people called the IDPs. It may be pertinent to mention that the PML-N government, through a consensus among all political parties, also initiated a process of dialogue with the TTP, but the talks broke down due to the continuation of terrorist attacks during the parleys and their non-serious attitude.

Prior to the Peshawar episode General Raheel visited US and gave a new direction to the relations and cooperation between the two military establishments by successfully removing misgivings about Operation Zarb-e-Azb

Operation Zarb-e-Azb and Khyber have achieved tremendous success and nearly 90 percent of the area has been cleared of terrorists and the government was contemplating to start repatriation of the IDPs to their homes when the terrorists struck at the Army Public School in Peshawar. This tragedy acted as a catalyst in bringing the whole nation together. The civilian and military leadership responded well and quickly to this development. Prime Minister Nawaz Sharif, like in the past, convened a meeting of the leaders of all parliamentary parties to draw up an appropriate response. The PM spoke to the Afghan President and the COAS flew to Kabul to meet him and the ISAF commander with the evidence of the Peshawar attack having been directed from Afghan soil. Both of them expressed solidarity with Pakistan and vowed to eliminate TTP terrorists based on Afghan soil. There were drone attacks and ground offensives in Kunar province, killing 21 terrorists.

Prior to the Peshawar episode General Raheel visited US and gave a new direction to the relations and cooperation between the two military establishments by successfully removing misgivings about Operation Zarb-e-Azb. The new narrative firmed up by the PML-N government regarding relations with Afghanistan with the backing and support of the military leadership sat well with the new Afghan leaders. Afghan President visited Pakistan and both countries agreed to fight against terrorism collectively, enhance trade relations and to join hands in realising the objective of regional connectivity, which forms the pivot of Pakistan’s economic strategy. The ISAF commander and Afghan Army Chief also visited Islamabad on December 23 to discuss and evolve a joint strategy for dealing with terrorism and monitoring the border between the two countries. With Afghan and US cooperation, chances of success of Zarb-e-Azb have increased tremendously. Meanwhile, the government, military and political leaders have agreed on an action plan to deal with the terrorists and made a solemn pledge to eliminate the scourge of terrorism.

During the year, the country also had to wade through a political crisis as a result of the agitation and sit-ins at Islamabad by PTI and PAT. Although PAT wound up its sit-in after two months, PTI continued the dharna and even organised public rallies in different cities to put pressure on the government. During the four months of the political turmoil, the country sustained enormous economic losses and also had to endure the biggest ever diplomatic embarrassment due to the cancellation of the visit of the Chinese President. The government showed remarkable restraint during the provocative campaign. A rare development was that for the first time in the history of Pakistan all the parties represented in the parliament, judiciary, media and the military establishment expressed their unqualified support for defending democracy and the democratic system in view of the threat posed by the sit-ins and the agitation. But in view of the Peshawar tragedy, Imran Khan in a show of solidarity with nation and the government has not only wound up the sit-in but has also thrown his weight behind the action plan to deal with the terrorists.

Pakistan, during the year, was also hit by the worst ever floods since 1973. According to details given by the government in a briefing of the diplomatic community, development partners and international donor agencies, 23 districts in Punjab, five in GB and 10 in AJK were badly hit by the floods inundating 2.41 acres of land. The government sought multi-billion dollar assistance from multilateral creditors, bilateral donors and friendly countries to rehabilitate the people affected by floods and the IDPs. It was indeed a calamity of enormous proportions but the government, it must be admitted, made strenuous and earnest efforts in shifting the stranded persons to safer places, with army, navy and other agencies extending admirable assistance to sustain these efforts. Financial assistance was also provided to the affected families expeditiously through 78 distribution centres. The devastation wrought by the floods was a big set back to the economy, especially the agriculture sector.

At the beginning of the year, the economy was undoubtedly in complete shambles. The country was reeling under the debilitating impact of a burgeoning energy crisis, which not only lowered the pace of industrial development and further deteriorated employment situation, but also made the lives of the masses miserable. Economic growth trundled along at below three percent, inflation was at double-digit, interest rates were high, budget deficit hovered around 8.8 percent of GDP, investments were on the downward curve, foreign currency reserves were alarmingly depleted and the country faced a default on previous IMF loans. The PML-N government accorded top priority to grappling with the energy crisis and lost no time in retiring the circular debt of Rs500 billion, which was the main cause of below capacity production of electric power. This resulted in addition of 1700 MW electricity to the system and eased the situation to a considerable extent, though the same has re-emerged due to extensive electricity theft and low rate of tariff recovery. The government also took steps to enhance power generating capacity to cater to future needs. Work on Energy Park at Gaddani has already been set rolling where ten coal based electricity units, with a cumulative power generating capacity of 6600 MW, would be set up by attracting foreign investment. China has committed to make an investment of US$6 billion in the power sector during the next five years. Ground breaking ceremony of a nuclear power plant at Karachi with Chinese assistance that would start producing 2200 MW electricity by 2017 has already been carried out. Steps have also been taken to convert the existing oil based power plants to coal based units to curtail the oil bill and also to ensure cheap electricity to the people in the future.

The country was reeling under the debilitating impact of a burgeoning energy crisis, which not only lowered the pace of industrial development and further deteriorated employment situation, but also made the lives of the masses miserable

The government intensely lobbied for achieving GSP Plus status for Pakistan and its efforts in this regard proved successful. It is estimated that the GSP Plus would boost our textile exports to EU countries to the tune of US$2 billion. The government also claims to have restricted inflation to a single digit, having achieved a growth rate of 4.14 percent as compared to three percent last year; exports have increased by 2.73 percent; remittances have gone up by 13.7 percent; decline in the rupee’s value has been arrested, revenue collection has increased to Rs2,226 billion as compared to Rs1,946 billion last year, registering an increase of 16.44 percent; budget deficit has been brought down to 5.7 percent from 8.8 percent last year and trade deficit has decreased by 2.55 percent. These achievements have been endorsed by the IMF and the World Bank. Moody’s has also upgraded Pakistan’s rating.

The government successfully issued Eurobonds worth US$2 billion. The auction of radio spectrum license of 3G and 4G achieved a target of Rs120 billion as against Rs79 billion set by the previous government. International donor agencies like the World Bank and Asian Development Bank resumed their normal business with Pakistan after a gap of seven years, indicating confidence in the economic policies of the government. Prospects of foreign investment are also very encouraging. Negotiations are also in the offing with some US companies for investment in the power sector in Pakistan. Keeping in view the future, the signing of agreements with China for the projects covered by Pak-China Corridor and the power projects with a total investment of US$42 billion, was probably the best deal of the year.

As is evident, the year was full of difficulties on all fronts, but developments in regards to fighting terrorism, revival of the economy and prospects thrown up for settlement of the political disputes are certainly encouraging and might well prove to be the harbinger of a healthy change in the economic profile of the country.