Analysis, South Asia

Pakistan Headlines – 14 Dec 2018


  • The Boom and Bust of Stock Markets is Due to Capitalism’s False Economy
  • Democracy Will Never Look After the Affairs of the Poor, Homeless and Struggling
  • Bajwa-Imran Regime Crosses another Red Line by Inviting Indian role in Afghanistan

The Boom and Bust of Stock Markets is Due to Capitalism’s False Economy

Stocks continued to bleed profusely on 6 December 2018, as investors were haunted by the “uncertainty” over the government’s plans to restore the ailing economy and stem the slowdown in economic growth. The KSE-100 index tanked 1,002.48 points (2.55 per cent) and settled at 38,300.63. Besides tracking losses in regional markets, the market is still feeling the aftershocks of the previous double whammy: the sharp hike in policy rates by 150 basis points together with the erosion of rupee value by 3.8pc the same day. Those episodes stoked destructive flames that are leaping over the stock market for five weeks in a row. Media these days is awash with gloom and doom news on stock market front. In modern day economy so much time, media and general hype surround the workings of the stock market. The capitalist world seems to live and die by the very rise and fall of its primary capital market. The stock markets and the currency and futures markets have grown to such a size and influence that they dwarf the real markets for goods and services.

Stock markets are financial markets where people buy and sell shares of companies. However, these markets are completely different to real markets in which people may sell fruit or clothes. The reason that people buy shares is basically to make money because the shares market goes up and down. So people buy shares when they think prices will go up and sell shares when prices go down. It is all based on confidence in the companies as well as in the overall economic condition of a country. Speculation in today’s false paper economy is built largely upon confidence. As soon as confidence is undermined, whether for expected or unexpected reasons, then the market starts to flounder, and many shareholders rush to sell their shares simultaneously. This is in order to cash in upon what they think they have gained from the rise in the value of the shares, so they all want to sell as soon as possible. Prices therefore start falling and consequently continues with the number of shareholders wanting to sell their stocks. A domino effect starts to form within the market normally resulting in heavy trading losses for all.

The stock markets came into being because of three basic characteristics of the capitalist economic system, 1). -The public limited companies system (and related stock market in which these shares are traded). 2) – The usurious banking system. 3) – The inconvertible paper money standard. These three systems come together to split the capitalist economy further into two distinct forms or into two types of markets, the first represents the real economy where the production, marketing and real services take place, and the second is the financial economy, which some refer to as the parasite economy, where the contriving, buying and selling of various financial papers takes place. This is the reality of the stock markets in the West and in every country that follows and emulates the West within their markets. The stock markets are the breeding ground of the businessmen, for they do not produce any commodity that could be useful for people and there is no other incentive for the investors except a quick and easy profit. Stock markets are little more than casinos and represent a huge gambling hall. They are like webs sown by spiders, which can easily be shaken and torn apart. They represent the symbol of the capitalist greed and the attainment for material and financial benefit.

Hence the only thing which will save the world from the capitalist greed, the public company system, the usurious banking system and the inconvertible paper money standard is the abolishment of this corrupt Capitalist economic system. Inherently it is based on a gambler’s promise and false speculative markets. The use of the usurious banking system and the inconvertible paper money standard must be removed with a subsequent return to the gold and silver monetary standards. This will put an end to the horrific inflation and the usurious bank loans facing the current capitalist nations. It will also put an end to the speculations that have caused these shocks in the money markets. The need for usurious banks will also come to an end, and therefore, the economic situation in the world will be stabilised and the financial crisis will disappear. The pretext for having money markets will also disappear and with it the economic crisis and uncertainly. All this can only be achieved by returning to the Islamic economic system as implemented by the Khilafah (Caliphate) on the Method of Prophethood.


Democracy Will Never Look After the Affairs of the Poor, Homeless and Struggling

During his visit to Karachi on 9 December 2018, Prime Minister, Imran Khan, claimed that no injustice would be done with anyone in the name of the operations against encroachments, even though thousands have lost their livelihood for weeks. He further said that the federal government wanted to provide homes to the homeless and if injustice had been done to anyone during the anti-encroachment drive, it would stand by the victims. However, the Joint Director of Land and Railway, Imtiaz Siddiqui, on 10 December 2018 announced that the anti-encroachment drive to clear the land allocated for the Karachi Circular Railway (KCR) has been delayed by just a single day- yes, just one day. How can people living in encroachments for decades vacate in a single day or even few days? How can any government, federal, provincial or citywide, destroy dwellings and businesses without providing immediate alternate shelter. Is good governance about force or looking after the affairs of the people?

Researchers at the Karachi Urban Lab (KUL) stated that the housing demand in Karachi is estimated at 80,000 new units per year. The formal sector supplies 32,000 housing units and another 32,000 are built in katchi abadis (urban slums). Moreover, 75.5pc of the city’s residents are classified as poor, and as such they constitute the majority of the unmet demand. Even when the abandoned poor find shelter through these encroachments, they are deprived of their dwelling after years of establishing a living. The Sindh government’s own study in 2011 established that 70pc of these residents have been living in these settlements for at least twenty years. Thus instead of arranging housing for the many homeless, the government moves to destroy existing slum homes, much as they are. Relocation and compensation are not after thoughts, but are part of caring for the people, as a foremost consideration. Even the proposed housing is a poverty trap set by private contractors and banks. The poor are supposed to pay Rs. 600,000/- as a down payment and will be indebted with interest based loans, to add to their burdens.

Clearly, the attitude of the state is not that of a caring state, but that of a colonialist administrator. As such, the current state is true to its democratic nature, which is a state that cares only for the interests of small, powerful elite that takes turns to rule, whilst being the very means for the hardship and suffering of the masses. In contrast, Islam has declared housing as a basic necessity of humankind. RasulAllah ﷺ said,«لَيْسَ لابْنِ آدَمَ حَقٌّ فِي سِوَى هَذِهِ  الْخِصَالِ: بَيْتٌ يَسْكُنُهُ، وَثَوْبٌ يُوَارِي عَوْرَتَهُ، وَجِلْفُ الْخُبْزِ وَالْمَاءِ» “The son of Adam has no right to anything except these: a house to live in, a clothing to cover his ‘Awrah (parts of body that must be covered in public), some bread, and water.” Thus in the Khilafah state, it is the responsibility of the state to ensure housing for each and every citizen. To keep the cost of housing within the affordable range of the common man, the state will provide basic facilities throughout the country. It will not just concentrate within existing urban centers, which causes massive urbanization and inflation of land prices in urban areas. This inflation in itself is the major cause of encroachments in urban areas, even though more than 60% of Pakistan’s population is dependent upon agriculture for living.

The Khilafah state will abolish the speculative cartels that exist in the real estate business, which have caused the cost of urban land to multiply many fold, even though most of the land is left abandoned. Also, it will abolish the stock share company that enables the dominant private ownership of large scale construction industries. Instead the Khilafah will undertake large scale construction by itself, bringing the cost of construction as low as possible, as it will not profiteer. If some of the citizens of the state are still not able to arrange accommodation for themselves, then it is the state’s responsibility to arrange for such needs through the ample funds it will have at its disposal after implementing the Islamic economic laws.


Bajwa-Imran Regime Crosses another Red Line by Inviting Indian role in Afghanistan

Foreign Minister Shah Mehmood Qureshi has sought cooperation of all regional players, including India, for the ongoing peace and reconciliation process in Afghanistan, saying that the entire responsibility could not be placed on Pakistan alone. “Since Indian presence is there [in Afghanistan], its cooperation is also required,” Mr Qureshi said while responding to a point of order raised by Jamiat Ulema-i-Islam (JUI-F) lawmaker Maulana Abdul Wasay on the opening day of the National Assembly’s sixth session on 10 December 2018. When America opened the doors of Afghanistan for India to exercize economic and political influence, the then political and military leadership made a show of their resentment against this US move. Previous political and military leaderships even officially complained that the US in not considering Pakistan’s genuine security concerns with respect to the Indian presence in Afghanistan. They cited the Indian use of Afghan soil to launch terrorist attacks inside Pakistan.

However, the current regime has abandoned such concerns after US pressure. Imran Khan revealed on 3 December that the US President Trump wrote a letter to him, requesting Pakistan to play a role in the political settlement in Afghanistan. Then on 7 December 2018, Lt Gen Kenneth McKenzie, the incoming chief of the US Central Command (Centcom) said, that he “will make Pakistan a priority engagement.” “At this time, Pakistan does not appear to be using the full extent of its influence to encourage the Taliban to come to the table… We continue to see the Taliban being utilised as a hedge against India rather than as part of a stable, reconciled Afghanistan,” he added. So, Pakistan’s so called ally does not care Pakistan’s security concerns with respect to the Indian presence in Afghanistan. It will not even address these concerns in exchange for Pakistan using its influence to herd the Afghan Taliban into negotiations. Such is the stance of an ungrateful master towards a blindly obedient slave!

Since 9/11, successive political and military leaderships have submitted to US demands on the basis that Pakistan can’t confront the US as it is a superpower. However, to avoid anger from the armed forces, with respect to India, they asserted that they will never accept Indian regional hegemony as it is a red line that can never be crossed. However, agency to the US eventually ensures all red lines are crossed as the Muslims have seen repeatedly since the time of Musharraf. Such rulers secure the US interests, without concern for the interests of the people they given. On what grounds, does the Bajwa-Imran regime justify accepting the Indian presence in Afghanistan? Has India suddenly vacated Occupied Kashmir? Has India stopped building dams to make Pakistan a barren land? Has India closed her more than dozen consulates in Afghanistan? Has India dismantled her Khulbhushan Jadhav Network? Yet, despite unabated Indian aggression against Pakistan and the Muslims of Occupied Kashmir, the Bajwa-Imran regime invites India into Afghanistan.

Like previous regimes, the Bajwa-Imran regimes does not follow the commands of Allah (swt). Allah (swt) said, وَاقۡتُلُوۡهُمۡ حَيۡثُ ثَقِفۡتُمُوۡهُمۡ وَاَخۡرِجُوۡهُمۡ مِّنۡ حَيۡثُ اَخۡرَجُوۡكُمۡ‌ “And kill them wherever you overtake them and expel them from wherever they have expelled you” (Surah al-Baqarah 2:191). Instead the regime follows the commands of its master, US, which wants India to become the regional hegemon so as to counter China and the Muslims of this region. Pakistan needs a leadership which only cares about the commands of Allah (swt) so as to gather the Muslims as an effective force against the US-Indian nexus. That leadership we can only be secured by re-establishing the Khilafah (Caliphate) on the Method of Prophethood.