DAWN Editorials - 21th february2025

[faheemustad]

Ukraine initiative

THOUGH Donald Trump has not been able to fulfil his promise of ending the Ukraine conflict “24 hours” after taking office, the American president is clearly not interested in pumping more US funds into this war. Moreover, his overtures to Russia — and use of scathing language to target the Ukrainian president — have sent shockwaves through Kyiv and European capitals.

Mr Trump is not a man known to indulge in diplomatic niceties, but the language he has used for the Ukrainian president has been unforgiving. He has termed Volodymyr Zelensky a “dictator” and a “moderately successful comedian” intent on keeping the American “gravy train” going. This is as clear a signal as any that the flow of American funds and weapons to Kyiv is coming to an end.


In fact, the Russian foreign minister and his American counterpart met in Riyadh on Tuesday to restart bilateral engagement, which had practically come to a stop under the Biden administration. All this signals that US involvement in the Ukraine conflict will be considerably reduced, if not ended altogether.

In a few days, it will be three years since the Russians invaded Ukraine, with the conflict upending the international order, and reviving the ghosts of the Cold War. It is high time that the war ended, but in a just and equitable manner.

Mr Trump was clearly wrong when he accused Ukraine of starting the war, as it was Moscow that invaded its western neighbour. But relations between the West and Russia had been deteriorating since before the invasion, with Moscow fearing that Nato was getting closer and closer to its borders. The Ukraine conflict has, in fact, turned into a proxy war pitting Nato against Russia; there have been perilous moments where both sides have come close to a direct conflagration. The American president is a major Nato sceptic, which would explain his urgency to wrap up this war.


Reacting to the meeting between Russia and America’s top diplomats in Riyadh, President Vladimir Putin said he is ready to return to the peace process. This resolve should be backed by confidence-building measures. For a start, both sides should commit to an immediate ceasefire, while Moscow needs to recognise Ukraine’s territorial sovereignty; the Soviet Union is now a part of history, and Russia should respect the independence of the ex-Soviet states.

On the other hand, the Nato states cannot afford to treat Russia like a bogeyman and must engage with Moscow in a spirit of mutual respect, working for collective security. It is difficult to say whether Mr Trump’s Ukraine peace initiative will succeed, but it will be very difficult for Kyiv and its European backers to face the Russian military machine without America’s big guns and endless supply of dollars.

Published in Dawn, February 21st, 2025


High cost of SOEs

THERE are losses and then some. The finance ministry’s latest overview of the federally owned state enterprises shows that most SOEs keep haemorrhaging at the expense of taxpayers, the economic infrastructure, and crucial public services such as healthcare, education, clean water supply and sanitation. The report reveals that the aggregate losses of several SOEs, particularly those operating in the power and infrastructure sectors, rose to Rs851bn in FY24, with their total debt surging to Rs9.2tr, nearly equalling the tax revenues collected by the FBR for that year. The losses include government assistance of Rs782bn in subsidies and Rs367bn in grants added to their revenues. Some like the Pakistan Steel Mills are incurring losses, while waiting to be sold or liquidated for the past many years. Others such as the Railways and the national carrier are bleeding just to remain operational. The SOEs’ accumulated losses stand at a colossal Rs5.75tr. Most losses have accrued in the past 10 years alone. Not all SOEs are suffering losses. Some, like those in the business of oil and gas, insurance and power generation made a cumulative profit of Rs820bn.

The statement that the loss-making state enterprises have become a big burden on the budget and a major risk to fiscal stability does not even begin to capture the full threat that these SOEs pose to an already teetering economy. The government subsidies, grants, loans, and equity injections totalling Rs1.59tr — equal to 13pc of the federal budget receipts and significantly greater than the federal development programme — are enough to show the monsters they have become. Multiple half-hearted, botched attempts in the past to restructure essential and sell off non-essential SOEs underline the lack of political will to fix or part with them because of the easy, large rents they produce for politicians and bureaucrats. The way the privatisation of PIA was structured last year to keep out serious bidders from the process, and the failed maiden attempt to sell off its majority share reflects the entrenched financial interests of both politicians and the bureaucracy in maintaining the status quo to keep drawing rent out of the SOEs. But for how long? With government resources thinning by the day and pressure by multilateral lenders increasing, we are left with no option but to reconsider our policy on SOEs. It is only a matter of time before these would have to be liquidated, sold, or fixed.

Published in Dawn, February 21st, 2025


Poor impression

RECENT developments in the Senate have provided cause for concern on how parliamentary business is being conducted. On Monday, Deputy Chairman of the Senate Syedal Khan Nasar controversially decided to withhold the results of a vote on a motion after it unexpectedly received the support of several government-allied lawmakers as well. The motion in question had sought the immediate consideration of the State Bank of Pakistan (Amendment) Bill, which seeks to improve the private sector’s access to bank credit in smaller provinces. The government had strongly opposed the bill, arguing that it was a money bill, and therefore its own prerogative, but the opposition persisted, arguing that it had nothing to do with Article 74. Perhaps a bit frazzled by the debate, the acting Senate chair called for a vote, but the motion got more support than he anticipated. Ideally, he should have then announced the result and let the chips fall where they may. Instead, his actions left the impression that the House was siding with the government even against its membership’s wishes.

On Tuesday, as the opposition protested for the return of Senate Chairman Yousuf Raza Gilani, who, it may be recalled, has refused to chair the ongoing session ever since his production orders for a PTI senator were not honoured, the acting chairman suspended three PTI senators for protesting his decision. He also ordered the sergeant-at-arms to expel them from the House. This only added insult to injury. At one point during the ensuing pandemonium, the acting chair remarked that the House could not be run on anyone’s wishes and personal agenda. His actions belied those words. Parliament loses its purpose if it cannot adhere to set rules of the game. If the opposition is to be denied any victory at all costs, then it seems pertinent to ask whether it is a dictatorship that is being served by parliament, or some democratic system of governance.

Published in Dawn, February 21st, 2025