Tag Archives: Crisis

Pakistan Seeks Potential Solution to Political Protests

ISB-protest

For the past several weeks, Pakistan has faced a set of dual protests that have sparked a political crisis. One protest, led by former cricket star turned politician Imran Khan, head of the PTI party, draws on Khan’s allegation of widespread rigging in the landmark 2013 elections. Khan’s demands include electoral reforms, a redo of the election, and, controversially, the resignation of Prime Minister Nawaz Sharif of the PML-N party.

The other protest, led by Sufi cleric Muhammad Tahir-ul-Qadri, who heads the PAT party, seeks justice for followers killed and injured in a June incident at his headquarters. Qadri has demanded a full investigation, and also seeks the resignation of Punjab Chief Minister Shahbaz Sharif, the Prime Minister’s brother. After marching to Islamabad and holding daily rallies, the protests eventually turned violent. While the violence subsided, and the army has mediated talks among the government, Khan and Qadri, the situation has not yet abated.

These crises come at a difficult time for Pakistan. The country is dealing with massive floods after heavy monsoon rains. Furthermore, because of the protests, the center of Islamabad has been shut down for more than month, freezing legislative and ministerial activity in the capital. As a result, the government has been unable to make any progress on meeting an extensive set of conditions to keep badly-needed funds flowing under an IMF loan facility. Moreover, the much-awaited visit of Chinese President Xi Jinping has been postponed.

Over the past year, as shown by CIPE’s partner PRIME, an Islamabad-based think tank, the government has made only limited progress toward implementing an ambitious economic reform agenda, thus engendering widespread frustration. Against this backdrop, many observers worried that the military could seize power again, as it has done in the past, or at least seek greater influence. Citing a report from the US Congressional Research Service, there was fear that this could cause the US to withdraw crucially needed support.

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A guaranteed happy ending to financial crisis

Good economic news is hard to find nowadays. When the president of one major U.S. business organization addressed his staff, he remarked that he stayed up till early in the morning trying to think of a bright side to all the gloom of recent months. It came to him, finally: “At least we can expect some of our good people to [hold off on retirement] for a few more years. Or decades.”

For more good news to happen, somebody has to go out and become the story; somebody has to take advantage of uncertainty in world financial markets by demonstrating a commitment to a higher degree of certainty for investors. Businesses of every size, in every country, have the opportunity to take on the challenge of corporate governance as a pillar of development, and in the process provide shaky investors a firmer ground on which to land. It will be a long story to tell in the end, but it’s a guaranteed happy ending.

Dr. Jesus EstanislaoIn this CIPE Development Institute presentation (free registration to view), Jesus Estanislao tells that story in the context of the Philippines as it emerged from the Asian Financial Crisis in the late 1990s. As chairperson of the Institute for Solidarity in Asia and the Institute of Corporate Directors, Estanislao oversaw the implementation of corporate governance in the Phillipines as a strategy for emerging from the crisis. Business environment in the Phillipines is notorious for bribes and cronyism, which means that businesses can stand out even more by going beyond compliance and improving performance through corporate governance – and in the process, affect systemic change beyond their balance sheets.

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And the ground shook

While the house of cards that global finance built over the past decade continues to whither and fall, there are also communities around the world who recently saw their actual houses crumble to the ground. The May 12 Sichuan earthquake wasn’t meant to be a foreshadow for the global economy, but maybe it could be – and in so doing provides some light at the end of the tunnel, based on this May 21st story from NPR’s All Things Considered:

A month before the massive temblor, one woman and her family who live in the countryside a couple hours southwest of Chengdu in the region of Ya’an were hard at work building a new house.

Yao Suhui, 33, and her husband are peasant farmers. The new house is a symbol of upward mobility in the Chinese countryside….

“What bad luck,” she recalls thinking. “We’ve put everything we have into building this new house, and if it collapses, we have nothing.”

Luckily, just one wall fell down. Yao reports that they were back at work laying bricks the very next day.

Yao is hoping her children’s lives will be easier than hers. She had to leave school after sixth grade.

“I’ll encourage them to stay in school longer, to try their best to avoid our current situation,” she says. “The way things are now, you can only find a good job if you’re educated. People like us — we’re going to be left behind. So we’ll try our best to keep them in school so that they can have a better future. Then, our hard work will have paid off.”

Given an incentives structure like Yao describes rewarding hard work, creativity, education, and other aspects of human development, institutions can be strong enough to weather an earthquake and come out stronger in the end.  If Yao and her family can remain optimistic given her circumstances, maybe the global community can too.