By Cherian Thomas 

May 29 (Bloomberg) — Indian Prime Minister Manmohan Singh came to power pledging to improve the lives of common people. Soaring fuel and food prices are jeopardizing that goal, and his political future, as his term enters its final year.     Singh’s Indian National Congress party lost elections this week in the southern state of Karnataka, its ninth failure to take or hold power in the 11 provincial polls held since January 2007. A third of  India’s 691 million voters live in the nine provinces where the party was defeated. Read more »

By Aya Takada

      May 27 (Bloomberg) — Wheat prices, at their lowest in almost nine months, may fall further as farmers start to bring in a forecast record crop, U.S. Wheat Associates Inc. Vice President Vincent Peterson said.     In the next 90 days harvesting will be in “full swing” in the U.S., Canada, Europe and China, making wheat more available and affordable, Peterson said in an interview in Tokyo yesterday. He declined to give a specific forecast for prices, which have tumbled 44 percent from a Feb. 27 record of $13.495 a bushel. Read more »

An abrupt and belated move

From DAWN of May 26, 2008 

By Yousuf Nazar

Last Thursday, the State Bank appeared to have woken up to the fact that the country was facing high inflation and increased the benchmark rate by a record 150 basis points. This followed the earlier four hikes of 50 basis points each in April 2005, July 2006, July 2007, and January 2008. These abrupt and harsh measures could undermine the credibility of the bank. The State Bank Governor’s statement contained many contradictions that need careful examination but the knee-jerk nature of the measures points to a major shortcoming: the bank failed to anticipate the rapid deterioration in inflation, growth and other key macro indicators. For example, its January 2007 monetary policy statement had noted, “while inflation is likely to ease-off further it may remain above the target 6.5 per cent target for unless come additional administrative measures are taken to reduce food inflation.” 

A core function of a central bank is to anticipate inflation and growth trends and conduct its monetary policy accordingly because it can take around 18 months or so before the impact of its tightening or otherwise is felt on inflation. Read more »

A fighter and a financier
By Syed Saleem Shahzad

Part 1: Ducking and diving under B-52s

KUNAR VALLEY, Afghanistan - Afghanistan’s troubled recent history, which spans the Soviet occupation in the 1980s, the vicious post-Soviet civil war and then Taliban rule, has thrown up a number of men who have obtained “legendary” status - whether through their tribal followings or from connections with Pakistan’s Inter-Services Intelligence (ISI) .

Read more

 From DAWN of May 19, 2008 

By Yousuf Nazar  

On March 17, 2008, fourteen days before the new federal government was formed, I wrote on these pages:“Pakistan faces grim economic prospects in the next 12 months and the situation calls for emergency measures to control one of the highest rates of inflation in the world and a probable drop in the currency value due to the widening current account deficit and dwindling foreign exchange reserves. Pervez Musharraf’s regime has allowed the crisis to develop to a degree where the new government may not have any option but to take tough decisions if it wants to control the situation within 12-18 months because it would take at least that long for the measures to take effect. It is disappointing that the political parties, who won the elections, have not come out with any major policy statement about their plans to address the immediate economic issues.”    

    Two months later, it seems the two largest parties were not ready to assume power and face an unusually tough economic situation. There are no signs that the government has a comprehensive strategy and it took about 45 days to come up with just some administrative measures for energy conservation. Finance Minister Ishaq Dar has departed from the scene after spending much time blaming the previous government and doing little to come up with solutions. In the meantime, the rupee value has dropped by over 7 per cent, inflation has jumped to 17 from 14 per cent and the foreign exchange reserves have fallen by more than a billion dollars while the oil price has spiked by 19 per cent setting new records. Last Thursday, the Standard and Poor’s cut Pakistan’s credit rating by one notch to B with a negative outlook. Read more »

By Pamela Constable and Robin Wright
Washington Post

Sunday, May 18, 2008; A16

ISLAMABAD, Pakistan — Bereft of his uniform, crucified in parliamentary elections and derided in graffiti as America’s pet dog, President Pervez Musharraf has virtually vanished from public life in the past three months, reportedly nursing his wounds and coming to terms with his diminished role in a government headed by politicians he had once banished from the country. Read more »

From DAWN of May 17, 2008 

By Anwar Iqbal

WASHINGTON, May 16: As much as 30 per cent of the US aid for Afghanistan and Pakistan is siphoned off as overhead expenses before it reaches the region, US lawmakers have been told. Read more »

Saturday May 17, 2008 

The refusal yesterday of the head of Pakistan’s ruling coalition to accept the resignations of nine ministers of Nawaz Sharif’s party is a sign of the gravity of the situation facing the winners of Pakistan’s recent elections. The issue dividing Asif Ali Zardari, the widower of the assassinated Benazir Bhutto, and Mr Sharif is, at face value, a technical one. Read more »

By JANE PERLEZ of New York Times

	Mohammad Sajjad/Associated Press Residents of Damadola, Pakistan, on Thursday checked the rubble of a building hit by a missile.

PESHAWAR, Pakistan — Pakistani officials are making it increasingly clear that they have no interest in stopping cross-border attacks by militants into Afghanistan, prompting a new level of frustration from Americans who see the infiltration as a crucial strategic priority in the war in Afghanistan.

Read more »

WASHINGTON (AFP) — The United States has poured nearly 40 billion dollars in aid to South Asia since the September 11 attacks but the terror threat from the region remains a top problem, a congressional hearing was told Wednesday.

“South Asia is arguably the place from which America faces the greatest terrorist threat,” said Gary Ackerman, the head of the House of Representatives panel on issues relating to the region that includes Pakistan and Afghanistan. Read more »

By Alison Fitzgerald, Jason Gale and Helen Murphy

     May 14 (Bloomberg) — Fidencio Alvarez abandoned his bean and corn farm in southern Honduras because of the rising cost of seeds, fuel and food. After months of one meal a day, he hiked with his wife and six children to find work in the city.
     “We would wake up with empty stomachs and go to bed with empty stomachs,” said Alvarez, 37, who sought help from the Mission Lazarus aid group in Choluteca in January. “We couldn’t afford the seeds to plant food or the bus fare to buy the food.” Read more »

from the May 12, 2008 edition

Washington - The Bush administration’s focus on military solutions against extremists in Pakistan has analysts concerned that the US is persisting in a failed policy with a critical ally at a time when changing circumstances in the region – including a newly elected government in Pakistan and heightened conflict in Afghanistan – demand a strategy shift. Read more »

By Gideon Rachman

Chief foreign affairs columnist, the Financial Times

Published: May 13 2008

With the oil price heading upwards and President George W. Bush heading for Saudi Arabia, as part of a Middle Eastern tour, it is time to accept the truth. The pursuit of oil is fundamental to US foreign policy. Read more »

By Declan Walsh of Guardian in Islamabad

Pakistan’s fragile coalition government suffered a bruising blow today when Nawaz Sharif, leader of the second largest party, pulled his ministers from the six-week-old cabinet.

Read more »