Business

Conflicting forestry, wildlife management paradigms

Published

2 months ago

September 26, 2023

Admin

ISLAMABAD:

Sustainable forest management is a simple practice that meets the needs of the current generation without compromising those of the future generation.

Sustainability has three important development paradigms, ie, social development, economic development and environmental protection. All three pillars must be inclusive and have to play their role simultaneously without compromising the impacts of others.

Social development means that we must ensure that sustainable forest management takes care of the social and cultural norms of a community or society at large. Economic development means to ensure economic progress of the communities and society at large while environmental protection ensures protection of the environment during the developmental process.

Read Tech-driven conservation of wildlife on the cards

The rural population of Pakistan, mainly the mountain-dwelling communities, primarily depends on forestry and other natural resources as a source of food, feed, shelter and income generation as they don’t have any alternative sources of livelihood.

It is observed that the so-called champions of environmental protection always tend to raise the slogan of not touching the forestry resources even beyond the economical rotation age, although leaving trees beyond the rotation age releases the stored carbon stock into the atmosphere.

Therefore, to control the carbon stock emissions from the decaying wood, it should be harvested at the economical rotation age without waiting for its biological rotation age.

Pakistan is a party to the United Nations Framework Convention on Climate Change (UNFCCC) and has ratified the Paris Climate Agreement. Thus, it is obliged to control the greenhouse gas (GHG) emissions.

Under the Nationally Determined Contribution (NDC) that Pakistan submitted to the UNFCCC Secretariat, it is required to achieve the targets set in it and other such commitments.

All these agreements are in line with the sustainable development paradigm, which must be according to the Sustainable Development Goals (SDGs) adopted by Pakistan.

All these instruments ensure the use of available resources to meet the needs of the current generation without compromising the requirements of future ones. This means we must feed the present generation using the available natural and forestry resources but on a sustainable basis.

Declaring a piece of forest as national park does not mean that the same piece of land cannot be de-notified to ensure the sustainability of resources in order to provide social, economic and environmental services. This way, the natural resources keep on renewing themselves and satisfying the needs of owners and other forest dwellers.

Most of the forests have recently been restored with green vegetation under the billion and 10 billion tree plantation programmes. In addition, they are covered by REDD+ for developing carbon credit projects.

REDD+ studies focus more on the local land owners, communities and rights holders for social and economic benefits. For instance, the REDD+ study for Kaghan Valley in the Hazara Division covers over 60% of private land ownership of the mountain dwelling communities.

Their rights carry a lot of weight and such rights must be encouraged and facilitated aimed at providing goods and services to the local communities.

It is ironic to see conflict of interest in divergent uses and the management of forestry resources in the hilly mountains of K-P. A piece of forest land with local community rights has been declared as a reserve and protected forest, which is further aggravated by giving it the title of national park.

On the other hand, Pakistan has included such pieces of extended forests as REDD+ sites that require social and economic exploitation. All such declarations must be revisited in light of the ground realities and their uses for REDD+ benefitting the local communities more than other stakeholders.

The Kaghan Valley, for instance, has conflicting uses because of the forests being declared as national parks and protected areas whereas other parts come under the active forest management plans. The trophy hunting in G-B and Chitral is, in fact, community-based management of wildlife and the community’s share in each hunt is 80%, leaving 20% of the trophy fee as administrative fee for the G-B forestry and wildlife department.

The secret of success of these interventions lie in the community’s share, which is playing an important role in sustainable management of wildlife resources in G-B and Chitral, just because of the benefits to the local communities.

K-P and other provincial forestry and wildlife departments have failed to introduce innovation in managing resources under the market mechanism and by involving communities. Keeping forests and other ecosystem as conservation reserves by banning the entry and rights of the local community is an orthodox and centuries-old practice without any innovation.

Wildlife policies are totally conservative without considering the sustainability aspects of forests and the ecosystem. They only support the third pillar of sustainability, ie, environmental conservation or protection, and totally ignore the social and economic aspects of sustainability.

This is against the principles of sustainable development that is in vogue throughout the world.

The writer holds Masters and PhD in Forest Management and has served in provincial forestry, national and international environmental organisations

Published in The Express Tribune, September 25^th, 2023.

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Business

‘Domestic debt restructuring will be painful’

Published

39 mins ago

November 28, 2023

Admin

ISLAMABAD:

As the government maintains silence about its next move after declaring its debt “unsustainable,” former central bank governor Shahid Kardar stated on Monday that Pakistan would need to be in the International Monetary Fund (IMF) to qualify for debt restructuring, and the process would be very painful.

Banks may need to take a hit on their principal loans, the central bank may need to relax prudent regulations to lower capital requirements, and high taxes might have to be imposed on cash withdrawals to prevent a run on the banks, according to Kardar.

He delivered a presentation on the prospects of debt relief during the third Pakistan Prosperity Forum organised by the Policy Research Institute of Market Economy (PRIME).

“Pakistan would have to be in the IMF programme to qualify for the debt restructuring,” said Kardar in response to a question.

The Ministry of Finance’s spokesperson did not respond to questions even after three days regarding whether the government has approached commercial banks for debt restructuring.

The servicing of external and domestic debts appears increasingly unsustainable, with Pakistan’s gross public debt now equal to 667% of revenues compared to the average of 214% for more than 20 comparators, according to Kardar. Kardar also pointed out that wasteful expenditures on low-priority and poorly designed projects have made the debt unsustainable. Prospects for recovery depend on progress in restoring debts to manageable levels.

“Debt restructuring is complex, there are no short-cut solutions, and the government would also face issues like foreign currency swap arrangements, deposits with the SBP, bonds with a large number of holders and covered by New York Laws,” said Kardar.

The former governor said that Pakistan may also not qualify for the G-20 Common Framework for Debt Treatment, meant only for heavily indebted countries. Kardar stated that being lower-middle-income, Pakistan may also not get relief under the G-20 framework. He mentioned that bilateral creditors seem reluctant to suspend debt servicing payments due to difficult financial conditions, fearing credit rating downgrades leading to a loss of access to capital markets.

Domestic debt restructuring

Although the Ministry of Finance has not responded to a question on the future course of action, Kardar highlighted the prospects and challenges of domestic debt restructuring.

The former governor said that if Pakistan seeks the write-down of external debt, foreign lenders would also ask in return for similar adjustments in domestic debt. He predicted that banks, being the largest lenders to a bankrupt borrower, will have to bear the burden of some pain.

Read: FM warns of unsustainable debt

Pakistan’s total public debt has already increased to Rs75 trillion or equal to three-fourths of its economy, with interest payments consuming the entire net federal income.

Kardar said that the “reduction or liquidation of domestic debt will require a gradual approach, involving a combination of significantly negative real interest rates, a moratorium and suspension of interest payments for some years, longer maturities, and some write-down of its face value.”

He said that a substantial reduction in the face value of the banks’ lending to the government would hit the capital base of banks, requiring loans to them at concessional rates. A short-term relaxation of the SBP’s prudential regulations on capital adequacy might be needed for domestic debt restructuring. The former governor suggested that, to prevent large cash withdrawals and a run on banks by depositors, the government might have to impose a hefty withholding tax. This would need to be supplemented by the government guaranteeing all deposits for a two to three-year period.

He said that one option could be a higher tax rate on bank incomes, but he stated that it was not a preferred option. Kardar also mentioned that there was not much space for external debt restructuring, as 48% of the debt is owed to multilaterals and is mostly at highly concessional rates. He added that China, which holds 31% of bilateral debt, was already rolling over repayments of $8 billion but was reluctant to accept losses on its lending portfolio.

The former central bank governor found many similarities between Pakistan and Sri Lanka, another country facing a severe debt crisis.

He said that, like Pakistan, Sri Lanka also granted generous tax exemptions and booked a primary budget surplus in only three years since 1951. Sri Lanka, like Pakistan, financed its unsustainable fiscal deficits through foreign and domestic borrowings, resulting in its public debt jumping to 128% of GDP and interest payments being 72% of revenues.

For this fiscal year, the IMF has estimated Pakistan’s interest payments cost at 92% of the FBR’s revenues.

Published in The Express Tribune, November 28^th, 2023.

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Business

PSX crosses 60,000 points milestone

Published

2 hours ago

November 28, 2023

Admin

Segregation of client assets is critical as brokers have been penalised for using client money illegally. PHOTO: AFP

KARACHI:

The Pakistan Stock Exchange (PSX) smoothly crossed the psychological barrier of 60,000 points during the early trading hours of Tuesday.

The gains came due to rich individuals and institutional investors making significant new investments in expectation of deep cuts in interest rates and the availability of stocks at low prices.

The PSX benchmark KSE-100 Index hit a new all-time high level of 60,745 points, rising by 1.56% or 934 points before mid-day from Monday’s close at 59,811 points. Penny stocks were the volume leader in the rally including textile, technology, food, bank and steel stocks.

Speaking to The Express Tribune, Arif Habib Limited Head of Research Tahir Abbas said: “The high expectation for a deep 7% cut in the key policy rate (interest rate) by the State Bank of Pakistan over the one-year agreed investors to take new possessions”.

“The central bank is expected to cut its key policy rate to 15% by December 2024 from record high 22% at present…ahead of a potential deceleration in inflation reading next year,” he added

Abbas mentioned that the interest rate cut expectations have made rich individuals and institutional investors relocate their investments to the stock market from fixed-income instruments these days.

Topline Securities CEO Muhammad Sohail said in a comment on X (formerly Twitter) that the PSX is breaking records and the development is “still not surprising.”

The market has gained 50% in only five months to over 60,000 points from 40,000 points. “This is the fastest 50% rise in a few months after 2004,” he wrote.

Read PSX hits fresh record, nears 60k milestone

“When you have an unbelievably low valuation, a price-to-earnings ratio of 3-4%, such recovery is not at all surprising,” Sohail further commented.

Abbas further said the listed companies have booked record high growth in profit of 46% in the first nine months ending September 2023 and added that “accordingly, dividend payments by them rose robustly by 42% in the same period. This is another factor that has attracted new investment at PSX”.

The market is expecting foreign currency inflows worth around $1.5-2 billion from multilateral creditors like the World Bank and Asian Development Bank soon after the IMF executive board approves the release of its second tranche of $700 million to Pakistan in December 2023.

This is another factor for the record-buying spree at PSX.

He anticipated the market reaching 75,000-80,000 points by the end of December 2024 considering all goes well including political stability in the country, economic growth, and global commodity prices remaining stable.

“The next six months seem stable at least”, he maintained.

Business

Completion of key projects increases water storage

Published

3 hours ago

November 28, 2023

Admin

LAHORE:

The completion of eight ongoing water and hydropower projects by Water and Power Development Authority (WAPDA) is set to significantly enhance Pakistan’s water storage capacity and hydel power generation. The carry-over water capacity in the country will increase from 30 to 45 days, with an additional 9.7 MAF water storage.

During a visit to WAPDA House, a delegation from PAF Air War College Karachi, led by Air Commodore Raja Imran Asghar, received a comprehensive briefing. The delegation comprised officers from Pakistan and allied nations.

Read: Water projects presented to Turkish consultants

The delegation learned about the climate change threats and water security challenges faced by Pakistan. WAPDA’s ongoing projects, such as Diamer Basha Dam, Mohmand Dam, and others, were highlighted as crucial for the water, food, and energy security of the country.

Published in The Express Tribune, November 28^th, 2023.

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