DAWN Editorials - 21th January 2025

[faheemustad]

Trump 2.0

DONALD J. Trump is back in the White House. A hard-fought re-election campaign culminated yesterday in him becoming only the second US president in history to secure non-consecutive terms at the White House.

His inauguration, watched by millions worldwide, marked a stark reversal of fortunes from just four years ago, when a high-profile defeat to Joe Biden had dropped curtains on a first term that featured much turmoil and controversy.


However, the trajectory and force of his political comeback have since demonstrated just how strongly his policies, distilled into slogans like ‘America First’, continued to resonate with ordinary American voters, who in 2024 handed him for the first time not just the majority of electoral votes but also the popular vote. He made it clear in his inaugural speech yesterday that he intends to deliver on those promises, even if doing so comes at the cost of antagonising the rest of the world.

Few have forgotten how disruptive Mr Trump could be as president. So far, there has been little indication that his second term will be any different. As his first order of business, Mr Trump yesterday vowed to start arresting and deporting illegal immigrants and put a stop to what he has described as the “invasion” of America, which is likely to have far-reaching implications for minority communities in the country. He also spoke about “taking back” the Panama Canal to protect American trade. He announced that he would reverse various environmental policies, especially those that incentivised electric vehicles, and bring back fossil fuels like never before.

On the plus side, he acknowledged that his ultimatum to Israel and Palestine seems to have enforced a long-elusive ceasefire, with both sides quickly suspending their hostilities and exchanging prisoners before he took office. Ukraine may now be on the top of his agenda, and we may soon see an abrupt drawdown of the Ukraine-Russia conflict.

Mr Trump yesterday said that he wants to be known globally as a peacemaker, does not want to get involved in conflicts and wars, and made it clear that his number one priority is his own people. That is a worthy position for a president to take.


However, the presence of high-profile xenophobes in his team will remain a concern. Paranoid and unapologetic about their views on race relations, these individuals have already openly supported the far right in Europe and the UK. Their insistence on describing their views as ‘freedom of speech’ raises fears that xenophobia and bigotry may become normalised and more commonplace. Such narrow worldviews may even dictate the Trump administration’s foreign policy.

This is why, though his speech yesterday was almost statesmanlike in some respects, many will continue watching Mr Trump to see whether he has really changed.

Published in Dawn, January 21st, 2025


GB’s status

THE demand raised by the people of Gilgit-Baltistan for constitutional clarity and provisional provincial status is not new. The region’s political parties and civil society groups often remind the Pakistani state that they want constitutional reform — as they did at an event in Islamabad last week. At the meeting, representatives of political and religious parties as well as activists pledged to launch a movement to secure constitutional status for the northern region. They called upon the state to implement the recommendations of the Sartaj Aziz committee and other official bodies regarding GB. The GB Legislative Assembly in 2021 had also passed a resolution demanding that the centre grant the region provisional provincial status. The people of GB want greater self-government, representation in Pakistan’s constitutional bodies and key institutions, and a working local government system. Because their demands have not been met, and the regional administration has failed to deliver on promises of good governance, the people have often taken to the streets to press their demands.

Since independence, reforms have been incremental in GB. Major milestones include changes in the Bhutto era, during Gen Musharraf’s regime, and under the post-2008 PPP government, as well as in 2018 under the PML-N’s watch. Yet all these measures, though significant, have failed to meet the people’s demands. One key issue is the fact that if Pakistan were to accept GB as a province, it would negatively affect the Kashmir question. One way to grant GB its demands, and not compromise Pakistan’s principled stand on the Kashmir dispute, is to give GB an AJK-like set-up, or full autonomy short of provincial status. The Sartaj Aziz-led body had recommended de facto integration of GB, giving the region representation in the NFC, Irsa, etc, ensuring the GB Assembly has full devolved powers, and ‘special representation’ in Pakistan’s parliament. It is not known when the Kashmir question will be resolved, and chances of a plebiscite in the occupied territory are slim. Therefore, till the day that dispute is resolved, Pakistan should consider giving GB greater representation under a provisional framework. Meanwhile, it is crucial for the elected local leadership to do a much better job of delivering services to the people while GB waits to secure greater political and economic rights.

Published in Dawn, January 21st, 2025


Panda bond

ISLAMABAD’S plans to raise $200m from China’s capital markets through the inaugural issue of a Panda bond this year to boost its finances and diversify funding sources will be a major test of investor sentiment. Finance Minister Muhammad Aurangzeb has on multiple occasions reiterated plans to enhance Pakistan’s presence in China’s capital markets through the yuan-denominated Panda bond. Though it may not be difficult for the country to raise these funds, it will not be a walk in the park either as Chinese investors seem wary of Pakistan’s heavy dependence on continuous Chinese debt rollovers and its request for rescheduling of energy loans of nearly $15bn due to a liquidity crunch. A recent media report suggests that China’s Exim Bank is not too enthused about giving “concessional loans to Pakistan, citing a limited window and concerns over non-payment or delayed payments to Chinese power generation companies”.

The success of the bond will also help determine how quickly Pakistan can return to the international bond markets to raise the planned $2.5bn in Eurobonds. Islamabad has not tapped the global bond markets since 2021, when it sold a debt of $3.5bn in five- 10- and 30-year tenors to international investors, due to a balance-of-payments crisis which had led it to nearly default in 2022 before the IMF came to its rescue. Even though the crisis has been managed and international rating agencies somewhat upgraded the country’s credit ratings, international investors remain concerned over the slow implementation of structural policy reforms amidst stagnant foreign official and private inflows. This is in spite of official optimism that the ratings will further be upgraded from the present junk category to investment grade in the coming months as the IMF-mandated reforms are executed to boost the recent economic stabilisation. The optimism notwithstanding, investors, including the Chinese, would want speedy and tangible progress on reforms before they bet their money on us.

Published in Dawn, January 21st, 2025