Another milestone: Dar credits PDF for dollar depreciation

“A friendly Muslim country has confidence in Pakistan and its leadership and deposited $1.5 billion in the PDF,” states the Finance minister. PHOTO: ZAFAR ASLAM/EXPRESS

ISLAMABAD: 

In a rare acknowledgement, Finance Minister Ishaq Dar on Wednesday said that a friendly Muslim nation gave $1.5 billion for Pakistan Development Fund (PDF) but refrained from disclosing the lender’s name.

“A friendly Muslim country has confidence in Pakistan and its leadership and deposited $1.5 billion in the PDF,” he said.

Speaking at a press conference, an unusually upbeat Dar claimed PDF contributions, actions against exporters who were withholding export receipts abroad and warnings to exchange market speculators – helped recoup the depleted foreign currency reserves to $9.52 billion.

Dar said better foreign currency reserves position strengthened the value of rupee against the US dollar bringing it to a record low of Rs97.90 on Wednesday. “The dollar’s current rate is realistic”, he added.

Highlighting details, Dar said the benefits of a stronger rupee are such that the country’s dollar-denominated external debt has reduced by Rs800 billion ($8.2 billion). This will also translate into reducing prices of electricity and petroleum products that will lower inflation, he added.

Wading through question on PDF, the finance minister said that the fund will be channeled through the State Bank of Pakistan (SBP) to finance mega energy and infrastructure projects initiated by the prime minister.

“The difficult period of getting external inflows is over and the government has added net $2 billion in reserves in last one month”, he announced.

A buoyant Dar also said he was confident that the reserves will cross $10 billion by the end of this month and $16 billion by end of current fiscal year.

With a ring of cautious optimism, the finance minister vowed that in three years the reserves level will be taken up to $20 billion, adding that the present rupee-dollar parity was sustainable as long as the reserves position remained stronger.

Quashing reports, the finance minister maintained that the government did not dump dollars in the market to artificially strengthen the rupee.

People should have confidence on what the government says and it has proven what it said so far, said the finance minister trumpeting his administration’s record.

Taking a swipe at those who criticized the government for its failure to control prices of essential items, Dar said the price of onions, tomatoes and dollars has been brought down to the level when Prime Minister Nawaz Sharif took oath.

During the press conference, Dar also said he would not pursue anyone to resign after the rupee-dollar parity has been brought back to Rs98 a dollar. But it’s the media that was holding him (Sheikh Rashid) accountable for his claim, he added.

In response to Dar’s claim to bring dollar rate below Rs100, Awami Muslim League (AML) chief Sheikh Rashid, had challenged the finance minister and said he would resign, if Dar succeeded in lowering the value of US dollar.

On negotiations with Taliban, the finance minister said that in case talks collapsed, government will provide all financial resources necessary to launch military operation.

Responding to a question, Dar said the United States was bearing the direct cost of war against terrorism through Coalition Support Fund (CSF). But the indirect cost in shape of loss of employment, foreign investment was very difficult to calculate.

“One cannot put a price tag to the cost of war on terrorism but according to one estimate Pakistan has so far sustained $80 billion losses, both direct and indirect”.

He said $1.6 billion CSF dues were outstanding and Washington was expected to release another tranche of $400 million by early April this year.

Power supply: Tajikistan to offer Pakistan another 1,000MW

Experts have picked a safe route for the construction of power lines in Afghanistan, given the situation prevailing there at that time. PHOTO: FILE

ISLAMABAD: In a significant development, Tajikistan is planning to offer 1,000 megawatts of electricity to Pakistan, in addition to CASA-1,000 power supply project, in an effort to put its surplus energy to use and help Islamabad ease the energy crisis.

Pakistan is already working on Central Asia South Asia 1,000 (CASA-1,000) power import project with Tajikistan and now plans for supply of an additional 1,000MW are being studied for which transmission lines will be laid from Tajikistan to Chitral in northern areas.

“We have the capacity to export an additional 1,000MW of electricity to Pakistan through Chitral route that will help our brotherly country overcome the energy crisis,” Sherali Jononov, the Ambassador of Tajikistan to Pakistan, told The Express Tribune.

“Under this project, transmission lines will pass through a small border area of Afghanistan and reach Chitral, which is 15 km away from Tajikistan border,” a source said.

The project, named “Rogun-Khorog-Vakhan-Chitral” and developed in the early 1990s, had drawn interest from some countries and international financial institutions, which were keen to become part of it, diplomatic sources said.

While working on the project, experts picked a safe route for the construction of power lines in Afghanistan, given the situation prevailing there at that time.

The length of the transmission lines of 765 kilovolts will be 650 km. With their construction, it will be possible to export more than 4 billion kilowatts per hour to Afghanistan and Pakistan.

The project is estimated to cost around $240.5 million covering the transmission lines to the border between Afghanistan and Pakistan.

“Representatives of some interested companies are set to visit Tajikistan to discuss the new proposed transmission lines for power export to Pakistan,” the source said.

The CASA-1,000 project involves construction of transmission lines from Kyrgyzstan and Tajikistan passing through central regions of Afghanistan, including Kabul, to Pakistan. According to preliminary data, the transmission lines will be spread over 970 km.

The surplus electricity in winter will be delivered to a single grid through the transmission line, construction of which will begin in the near future.

Reavealed: It was Saudi Arabia that loaned Pakistan $1.5 billion to shore up reserves

Prime Minister Nawaz Sharif meets Saudi Arabian Crown Prince Salman Bin Abdul Aziz at PM House, Islamabad on February 17, 2014. PHOTO: PID/FILE

ISLAMABAD: The “friendly Muslim country” that a beaming Ishaq Dar had referred to during his press conference on Wednesday, was revealed to be Saudi Arabia on Thursday, having loaned cash-strapped Pakistan $1.5 billion this week to shore up its reserves.

Pakistan had last month sought Riyadh’s help to shore up its foreign exchange reserves and meet debt-service obligations and undertake large energy and infrastructure projects, Pakistani officials have told Reuters.

The cash injection boosted reserve figures and helped the rupee rise to a nine-month high against the greenback of Rs97.40 from 105.40 against the dollar between March 4 and 12. This is the strongest rally of the rupee in 30 years.

“On a personal guarantee of the prime minister, Saudi Arabia has given $1.5 billion, which has helped bail out the rupee,” one senior Pakistani government official close to the deal told Reuters, requesting anonymity as he was not authorized to disclose the source and purpose of the funding.

The governor of the Saudi central bank declined to comment, and officials gave no details of the loan terms.

Another top official who is based in Lahore said the money went into an account known as the Pakistan Development Fund set up to channel money from “friendly countries” like Saudi Arabia and the United Arab Emirates.

“We have a promise of a total $3 billion, of which $1.5 billion has been received so far,” the second official said. “Most recently, we got $750 million from the Saudis.”

Prime Minister Nawaz Sharif has long enjoyed close relations with the Saudi royal family. After his second term as prime minister was ended by a military coup in 1999, he was sent into exile in Saudi Arabia.

Prince Alwaleed bin Talal, the Saudi financier and member of the ruling House of Saud, had dubbed Nawaz as “Saudi Arabia’s man in Pakistan”.

Pakistani Finance Minister Ishaq Dar confirmed on Wednesday that $1.5 billion was received under the development fund but declined to comment on the source.

“Why do you want to expose our friends?” he told reporters. “The countries who have helped us don’t want us to disclose the source.”

New fund

Dar announced the creation of the new fund on February 18, the same day Saudi crown prince and deputy prime minister Salman Bin Abdulaziz Al Saud concluded a three-day-visit to Pakistan.

Pakistan’s new army chief, General Raheel Sharif, also met King Abdullah and top Saudi military commanders during a trip to the kingdom two weeks before the new account was set up.

Other high-profile Saudi visitors to Pakistan this year have included Saudi Foreign Minister Saud Al Faisal and Prince Salman bin Sultan, the country’s deputy defense minister.

According to the finance ministry, gross official reserves – including the latest injection of $1.5 billion – stood at $9.52 billion on March 11. A third loan tranche of $550 million from the International Monetary Fund, expected before the end of March, will push reserves close to $10 billion.

Pakistan is expected to receive $150 million from the Islamic Development Bank in March, as well as $150-200 million under the Coalition Support Fund, reimbursements for assistance in the US-led coalition’s Afghanistan war effort.

Pakistan has delayed its launch of Eurobonds worth $500 million to May and plans to raise billions of dollars in privatisation revenue by June.

The government also expects to raise over $1 billion through the auction of spectrum licences.

An increase in foreign investment and remittances by overseas Pakistanis has also helped lift the rupee. Remittances increased by 11 per cent to $10.2 billion during the first eight months of this fiscal year.

The finance ministry has also attributed the currency’s recovery to punitive action against exporters withholding export receipts abroad and warnings to foreign exchange speculators

OECD suspends Russia accession talks while Moscow vows ‘symmetrical’ sanctions

The OECD has postponed activities related to the accession process for the Russian Federation at the request of its 34 member countries, the Organization for Economic Cooperation and Development (OECD) announced on its website on Thursday.

Moreover, OECD members have agreed to respond positively to Ukraine's request to further strengthen existing OECD-Ukraine cooperation, the group said in a short statement.

OECD - which comprises the world's most advanced economies - also said Ukraine's Western-backed government should be enabled to take advantage of the organization's expertise to address the public policy challenges it was facing.

OECD membership is largely symbolic, but involves a series of examinations on OECD standards in areas such as democratic freedoms, tax and environment laws, as well as accounting and statistics rules.

The suspension of accession talks with Moscow came amid mounting international pressure on Russia over its role in the Ukraine crisis, which is set to escalate at the weekend when pro-Russian forces in Crimea hold a referendum aimed at seceding from Ukraine.

The United States and the EU have vowed to impose sanctions against Russia if the country annexed Crimea.

On Thursday,Moscow said it would impose 'symmetrical' sanctions if the US and the EU resorted to such action.

'We are ready for any eventuality. We will mirror any action,' Russia's Deputy Economic Minister Alexei Likhachev said.

Likhachev also said he hoped any sanctions would be political. not economic.

'One would like to wish that sanctions taken especially by the European Union would not restrain business cooperation,' he said.

Most economies in Europe are closely interlinked with the Russian economy as they depend hugely on Russian gas and oil deliveries.

German central bank posts biggest profit since 2008

Following a couple of meager years, German Finance Minister Wolfgang Schäuble will be able to boost the federal budget with higher-than-expected profits made by the country's central bank.

The Bundesbank announced Thursday its net earnings for 2013 came in at 4.6 billion euros ($6.42 billion), 2.6 billion euros more than had been penciled in by the government in Berlin. The figure for last year compared with only 664 million euros a year earlier and marked the largest profit since 2008.

Bundesbank chief Jens Weidmann (pictured) said 2013 earnings were largely due to over seven billion euros in yields on capital accrued despite record-low interest rates.

Optimistic outlook

Weidmann said no more risk provisions had to be built up last year after signs of a nascent pickup in eurozone economies.

'The necessary alignment measures in the wake of the debt dilemma have come a long way in the nations hit hardest by the crisis, and confidence among market players is returning slowly, but surely,' the central bank chief said in a statement.

Weidmann mentioned the negative impact of plunging gold prices, with the Bundesbank's reserves now valued at 88.1 billion euros, down a third from a year earlier. The bank is currently in the process of repatriating its bullions stored in New York and Paris. By 2020, half of the country's gold reserves, about 3,400 tons, are to be based in Germany itself

Death of Gezi Park protest victim enrages Turkey

Tens of thousands of people gathered around the Alevi mosque in Istanbul's Okmeydani neighborhood Wednesday (12.04.2013) afternoon. The large crowd flocked to the funeral of 15-year-old Berkin Elvan. The boy had been in a coma for 269 days after he had taken a police bullet to the head last year during the Gezi Park protests.

According to media reports, Elvan wasn't a protester, but had merely left the house to buy bread. When Elvan died Tuesday morning, he only weighed 16 kilogram (35 pounds). He is the eighth person, including one police officer, to die in the protests against Prime Minister Recep Tayyip Erdogan's government.

The boy's mother blamed the prime minister for her son's death. 'It wasn't God who took my son - it was Erdogan,' she told journalists, crying.

President Abdullah Gül offered the family his condolences. In an interview with the Turkish newspaper 'Hürriyet,' he said he would 'do everything in my power so something like this won't happen again.'

Revitalizing the protests

After the funeral, the enraged crowd marched to the center of Istanbul. Among the protesters were students and parents, but also members of a variety of Turkish parties: the pro-Kurdish People's Democratic Party (HDP) and the Kemalist Youth Union of Turkey (TGB), as well as the workers' party and the anarchists. Posters showed photos of the eight victims.

Elvan's death has brought the people back out onto the streets all over the country. Protesters and police clashed in Ankara, Istanbul, Izmir and other cities, with tear gas and water cannons being used.

Berkin Elvan has become a symbol

Protesters have called Erdogan and his government 'murderers' and announced their intention to take further action. 'Ever since Gezi Park, we're all fighting together, here, on the streets,' Emir Kilici from the Taksim Solidarity Platform told DW. 'Berkin's death and the death of all the victims are a symbol for us and our resistance.'

Kilici called his country's leadership a 'fascist government' and said Erdogan was a dictator.

'This dictatorship is spreading across the whole country, without any feeling of shame,' he said. 'After all this corruption, the government doesn't even feel the need to offer an explanation to the country. We will take to the streets again and again to protest the AKP-dictatorship.'

Sinan Birecik from the Youth Union of Turkey was also fuming about the 'fascist behavior of the government' and about the police attacking protesters. He said the protests came from the people and they were going to 'prove that the government has to pay for its actions in the coming elections.'

The protesters' only demand is that the government step down, 25-year-old Efe Özal told DW, adding, 'Until that happens we'll keep going out into the streets.' Supporters of the pro-Kurdish HDP felt the same way, the student said.

Death by teargas

Police had blocked streets during the protest on Wednesday. In the early afternoon, they used water cannons and tear gas to split up the crowd. Protesters reported the officers also fired plastic pellets. The protesters, in return, threw stones and fireworks at the officers. Protesters in Istanbul erected barricades and set fire to piles of garbage.

Many people sought refuge in shopping malls, but those were hit with tear gas as well. 'Hürriyet' reported at night that a police man had died of a heart attack in a cloud of tear gas. Numerous victims had to be treated in hospitals.

Human Rights Watch criticized police violence in Turkey and the lackluster investigation of the Berkin Elvan case: 'Police violence against demonstrators is an endemic problem in Turkey,' the NGO's Emma Sinclair-Webb wrote in a statement on the organization's website. 'A culture of impunity is entrenched. Berkin Elvan, the boy in the coma who never woke up, has become a symbol of Turkey's record of police violence and lack of accountability. Berkin and his family deserve justice.'

Berlin is ‘over,’ but so what?

They've been acclaiming it ever since the fall of the Berlin Wall: the coolest metropolis in the world, with a sassy nightlife and naughty clubs, the city where the only rule is anarchy and the beer accompanying it costs close to nothing. Germany's capital - or, to put it more accurately, the capital of sex, drugs and rock 'n' roll. At least it used to be, according to the press.

This news was like a knife to the heart for Berliners, who've never had any doubt that their life is all about being out of the box. And now their beloved city is just plain out. For the diehard Berliner, the whole world has obviously gone crazy.

Berlinis dead. Long live Berlin

It all started with a review of Berghain - aka the best club in the world - by Rolling Stone magazine. The underground techno temple, located in a gloomy industrial building in what used to be East Berlin has been described as an almost 'religious experience,' and, with Berlin's post-reunification boom, quickly went from insider's tip to tourist magnet.

Despite the fact that the club's door policy is as rigid as its architecture, the so-called easyJet crowd (revelers who come to Berlin from out of town for the weekend) sheds a whole new light on Berghain's insider philosophy and on Berlin's state of mind in general. If Berghain is over, so is Berlin.

Following the Rolling Stone article, the New York Times, and Germany's Tagesspiegel and Süddeutsche Zeitung, plus a number of social media platforms had their take on the story. All with the same conclusion: Berlin is passé, what now? 

The New York Times quotes a 25-year-old artist from New York who compared Berghain with Brooklyn, saying that they're both creative spaces that have turned into middle- or even upper-middle-class societies.

So how come did the Mecca of cool become redundant seemingly over night? As a Berliner, I've been trying to explain it to myself and to my brothers and sisters in suffering. There are only two possibilities: Either we brought this on ourselves, or we're facing a worldwide conspiracy.

Revolution against evolution

Theory number one: We brought it on ourselves. Who's been frowning on the southern Germans who've moved to the capital in droves and brought with them too many German stereotypes for the Berlin spirit? And what about the international tourists bringing in billions of euros and furthering the hyper-modernization of the city? Who's been ranting about shabby corners becoming too chic?

Berliners have been complaining so loudly that the world overheard us - and now they're holding it against us. And it's not just the complaints - our praise of our beloved capital as the sexiest corner of the world (the author of this article being a repeat offender) equally piqued the attention of people all over the globe. Did we really expect no reaction?

On the other hand, I don't see what's so bad about evolution. I know that my rent has skyrocketed; I know that from my window I now have to look at a modern building made of concrete instead of the former beach bar we used to go to after work. Yes, some clubs have closed down or moved or been renovated. There are more fancy restaurants than there were 10 years ago, and the food is clearly more expensive. Altogether, the anarchy has calmed down a bit.

But so what? I like this constant dynamism. Of course, New York, London or Paris underwent these same changes long ago. But we Berliners don't approve of such comparisons, since we ought to stand out.

Theory number two: the conspiracy. I've read dozens of surveys indicating that Berlin will always get a top rating. Best value for tourists' money, greenest metropolis in Europe, most innovative design, hottest clubs, cheapest fun.

The whole world remembers David Bowie saying that Berlin is the place where he experienced freedom like nowhere else. From that moment on, he became our personal hero. Berlin is the embodiment of freedom and there might be some of you out there who know what I'm talking about.

After so many years of hearing all this about Berlin, the world is probably getting annoyed with us repeating ourselves like a broken record, and like the headlines of glossy magazines emphasizing Angelina Jolie's beauty for the millionth time. Eventually, you get it. As a result, the world may just have set up a conspiracy to belittle ultra-sexy Berlin and steal back the spotlight.

Inside job 

According to my first theory, the world would do many Berliners a huge favor by looking the other way for a while and not booking any easyJet flights. As for myself, I don't mind Berlin being in the spotlight and I couldn't care less if other people from other continents think it's become boring. What I know for sure is that since I set foot in Berlin many years ago and not a day has passed without this city surprising me in a way or another, and this city has plenty more surprises up its second-hand designer-label sleeves. 

Wait a second. A third theory has just occurred to me. What if the Berliners themselves are behind the bad press? If they can scare enough people away, then they can continue enjoying their cheap beer undisturbed in their favorite shabby cafes on graffitied street corners.

If you ask me, though, it won't work, because deep down everyone know that Berlin will never be boring.