Huge Interest Based Government Borrowing Will Further Break the Backs of the People
The government plans to borrow Rs1.35 trillion through the banking system in the first quarter (July-Sept) of this fiscal year, continuing the trend it followed during the previous year. The State Bank of Pakistan (SBP) reported on 3 July that the government has slashed the selling of Pakistan Investment Bonds (PIBs) by limiting them to Rs200 billion during the quarter. The SBP’s auction calendar shows that the government will raise Rs100bn in the mid of this month and Rs50bn each in the next two months through PIBs. The government will borrow Rs1.15tr through the sale of Market Treasury Bills during the quarter.
Persistent borrowing by the government to bridge budget deficit has resulted in inflation. Moreover the borrowing is on interest, so Pakistan’s debt obligations have crossed all sustainable levels. According to the SBP country’s debt and liabilities have soared to over two thirds of the total size of the economy. A government domestically borrows on interest either from its public, bank and non-bank, or from its central bank. The Raheel-Nawaz has resorted to heavy borrowing from the central bank, which is called “monetizing” the deficit. Because this method always leads to the growth of monetary base and of money supply and ultimately inflation, it is often referred to as just “printing money.” When banks acquire the government debt, government borrowing puts additional pressure on banks’ reserves and banks may demand more liquidity from the central bank. When such an extra demand from banks is accommodated and the central bank supplies banks with additional reserves, then in fact monetary base increases, thereby causing a rise in money supply through deposit multiplication, further fuelling inflation.
The Bayt al-Mal in the coming Khilafah will be a financial institution to support the growth of the real economy, including agricultural and industrial development. It is not a parasite that bleeds wealth from the economy through Riba (Interest), as the current private banks have become, creating the need for constantly expanding monetary supply, loss in value in the currency and the resultant increase in the prices. Its sole focus will be to develop a vibrant and powerful economy, by using loans to stimulate the local agricultural and industrial sectors. As Hizb ut-Tahrir has adopted in its Introduction to the Constitution, Article 169, “It is completely prohibited to open banks, and the only one permitted will be the State bank, and there are no transactions upon interest. This will be dealt with by a particular department of the Bayt al-Mal.”
Call to Reduce Air Conditioning Amidst Hot, Humid Days Whilst Fasting is Oppression
Even as the Met Office predicted at least two more dry and hot days across the country, the Ministry of Water and Power, issued a statement on 5 July advising consumers across the country to save electricity by minimising the use of air conditioners so as “to avoid forced loadshedding”. The statement noted that “excessive use of air conditioners can raise the demand for electricity, especially at the time of Iftar, Taraveeh and Sehri”.
Fasting Muslims are already suffering through heat exhaustion, with people dying of dehydration, and now the regime is asking for them to reduce the use of means of cooling themselves. This cruel demand is even though the total installed capacity of 22,797 MW is far greater than the peak demand during the year. The government itself is responsible for the crisis. Asides from neglecting the transmission capacity, it is surging ahead with the IMF demand of privatization of the power sector, which is leading to underproduction of electricity. Private owners are forced to operate on a profit basis only. Facing a government that withholds payments and expensive fossil fuel costs for thermal generation, the total power production is mostly half of the total installed capacity during the year.
The return of the Khilafah to Pakistan alone will end the power crisis. The power sector will become a public property as Islam has mandated and can neither be privatized or nationalised. The benefit is for the Ummah, allowing the state to supervise the production of electricity consistently and at affordable prices for its consumers.
Privatization of Power Sector is Crushing the People
While Karachi Electric profits continue to increase – There is more bad news for the citizens of Karachi as they brave the deadly heatwave that has struck the city. After the Sindh High Court vacated a stay order on power tariff, the National Electric Power Regulatory Authority increased power tariffs by between 20 to 80 percent for all Karachi consumers using over 300 units per unit. The increase in tariff ranges between Rs2 and Rs4 per unit.” KE has also been accused of making Rs361 billion without sharing the benefits with consumers… With consumers facing a greater burden, do the increased tariffs guarantee uninterrupted supply of electricity? The reality is that the tariff increase does not offer a solution to the country’s power woes, whose seriousness has once again been confirmed by the Karachi heatwave.
The government is responsible for Pakistan’s electricity crisis. The present capitalist system ensures that through privatization a few private owners, foreign and local, fully benefit from electricity resources whilst the public faces hardship. Privatization raises electricity prices so that the private owners can profit in their business.
The Khilafah State will end the capitalist economy and establish an Islamic one. As a system Islam ensures the distribution of wealth and one of its mechanisms is the public ownership of electricity resources as well as coal, oil and gas. As such these resources are neither owned by the state nor individuals. Instead, the state administers this resource to ensure that its benefit is used for all the citizens, regardless of race, color, school of thought and religion. The Khilafah will abolish taxes upon power and fuel which have further greatly inflated their prices. Islam’s electricity policy will contribute to a massive industrialization of Pakistan, supervised by the Khilafah.
On the Anniversary of Badr, Muslims fight Muslims for sake of Crusaders
According to ISPR, the armed forces public relations body, twelve tribal fighter and four soldiers were killed in a clash near Dattakhel in North Waziristan on 5 July. A spokesman for the banned Tehreek-i-Taliban Pakistan said in a statement that an improvised explosive device planted in the area had hit a vehicle of security forces, killing nine personnel, including an officer. As Muslims around the world remembered the Battle of Badr, 17 Ramadhan, the Muslims of Pakistan are counting their dead in a war of Fitnah where Muslims fight Muslims, whilst the Crusader occupiers of Afghanistan breathe sighs of relief.
To prevent the natural unification of the Muslim military, intelligence and tribal people as one force against its occupation, America is using its tried and tested formula, that it uses all over the world, to divide and rule over other peoples. Today, American intelligence and private military are working day and night to launch “false flag” attacks in the name of the tribal Muslims, a viscous bombings and assassination campaigns, against the civilian and military, to create Fitnah and turn Muslims against Muslims. And as the Muslims count their dead from military officers, soldiers, police, ulema, doctors, lawyers and general masses, the traitorous Raheel-Nawaz regime raises its voice for operations in North Waziristan, which was once the anvil upon which the Soviet Russian occupation was demolished.
Muslims must raise their voices against these criminal operations whose sole purpose is to secure the American dominance of the region. Muslims must work to abolish this traitorous regime and establish the Khilafah. Only then will the Muslims be led by a Khaleefah Rashid, who will conduct the operation that is actually required, the obliteration of the poisonous American presence within Pakistan and Afghanistan. RasulAllah ﷺ,
«إِنَّمَا الْإِمَامُ جُنَّةٌ يُقَاتَلُ مِنْ وَرَائِهِ وَيُتَّقَى بِهِ»
“Indeed the Imam is a shield, you fight under him and you are protected by him.”