How did Pakistan's economy perform during Imran Khan's era?

[TalentSpotterPk]

From 3.2 % Inflation in March 2018 now within 1 year it’s 9.4 %

 

[Bewal Express]

Please let me know the steps have been taken that can be termed as transplants? Question was what different step has PTI taken so far that wasn't done by their predecessors?

1. IMF Loan
2. Indirect taxes
3. Hiking the price of petrol, gas and electricity
4. Amnesty Scheme

If they are same like the previous government then why should not blame PTI. And if we don't blame PTI then why do we blame the last 2 governments? The yardstick should be the same. Don't you agree?

On economic front, Is there any game plan presented by the government or is it just word play?

Or do you want us to wait for another 20-25 years so IK can learn the art of goverance and then hope that he will deliver just like he did some more than 2 decades to learn about politics?

Why don't you accept the inexperience (read: incompetence) of PTI that is the reason for the disappointing show!

The PTI have never been in power, the other 2 have been in power for nearly 3 decades bar the Mush years and if you talk economic growth or all other indicators they were actually the best. These 2 parties have been setup to steal, they are not political parties in the western sense, they are family businesses who have quite looted billions. Yesterday you asked me for proof on their billions and in Sindhs case trillions stolen and i gave you a link to BB`s to the Rockingham Mansion and then i never saw your reply. The PTI did not create the crisis, its trying to manage decades of looting. It will take decades to repair the damage but as long as they are honest, IA we will succeed.

 

[Bewal Express]

From 3.2 % Inflation in March 2018 now within 1 year it’s 9.4 %

Why is that? Can you explain why the currency had to be devalued?

 

[Kriketer]

It will. Transparency and corruption is all what Imran needs to focus on. Funny how whiners are blaming Imran for inflation. He doesn't control dollar fluctuations and petrol market.

 

[TalentSpotterPk]

As per Asian Development Bank Pakistan GDP growth is to decelerate further to 3.9 % this year. The lowest in the region.


This was the state in 2018 :

 

[Bewal Express]

As per Asian Development Bank Pakistan GDP growth is to decelerate further to 3.9 % this year. The lowest in the region.


This was the state in 2018 :

Why dont explain why? Who bankrupted the country, where did the money go?

 

[Technics 1210]

As per Asian Development Bank Pakistan GDP growth is to decelerate further to 3.9 % this year. The lowest in the region.


This was the state in 2018 :

I would take lowest in the region if it still means being ahead of US, UK, Germany et al!

 

[Bewal Express]

I would take lowest in the region if it still means being ahead of US, UK, Germany et al!

A sustainable non growth of 3% is better than a debt fuelled 5%, which considering how much they borrowed was very poor. NS borrowed as much in 5 years as we did in the 1st 61 years.

 

[Bewal Express]

A sustainable non growth of 3% is better than a debt fuelled 5%, which considering how much they borrowed was very poor. NS borrowed as much in 5 years as we did in the 1st 61 years.

edit
It should say a sustainable growth rate of 3% is better than a debt fuelled 5 %

 

[sensible-indian-fan]

I would take lowest in the region if it still means being ahead of US, UK, Germany et al!

Did you just compare Pakistan's GDP growth rate with US?

Like if its growth rate is ahead of USA, that's ok?

Like seriously?

 

[Technics 1210]

edit
It should say a sustainable growth rate of 3% is better than a debt fuelled 5 %

100% agree.

 

[Technics 1210]

Did you just compare Pakistan's GDP growth rate with US?

Like if its growth rate is ahead of USA, that's ok?

Like seriously?

No I didn't, the data cited did. Look up.

Saying this, growth rate is very important.

If you you think not, then spare a thought for Indians who keep repeating India is one of the fastest growing economies in the world. Based on what exactly? That's right, growth rate.

You are however confusing growth rate with nominal GDP.

And yes, economies in the East should aim for a higher growth rate that in the West, I will give you a clue, interest rates in Western economies are minimal compared to Eastern economies, which is why, presto, growth rates are higher in the East.

 

[natkhat-shahzada]

The PTI have never been in power, the other 2 have been in power for nearly 3 decades bar the Mush years and if you talk economic growth or all other indicators they were actually the best. These 2 parties have been setup to steal, they are not political parties in the western sense, they are family businesses who have quite looted billions. Yesterday you asked me for proof on their billions and in Sindhs case trillions stolen and i gave you a link to BB`s to the Rockingham Mansion and then i never saw your reply. The PTI did not create the crisis, its trying to manage decades of looting. It will take decades to repair the damage but as long as they are honest, IA we will succeed.

Bhai, I will respond to the BBC link later.

Coming to your message, I agree that PTI is not be blamed for all the faults. No debate on this.

But my question/concern is something else: I am trying to highlight my concerns that the PTI govt is not doing different from its predecessors so how can I expect different results? In your own words, you have called other parties as corrupt or not political parties as they were only interested in minting money because of the result of the same policies that are being currently executed by this PTI govt.

So, I would like to be corrected in knowing how are PTI govt economic policies different than the previous government.

 

[natkhat-shahzada]

The PTI have never been in power, the other 2 have been in power for nearly 3 decades bar the Mush years and if you talk economic growth or all other indicators they were actually the best. These 2 parties have been setup to steal, they are not political parties in the western sense, they are family businesses who have quite looted billions. Yesterday you asked me for proof on their billions and in Sindhs case trillions stolen and i gave you a link to BB`s to the Rockingham Mansion and then i never saw your reply. The PTI did not create the crisis, its trying to manage decades of looting. It will take decades to repair the damage but as long as they are honest, IA we will succeed.

I am not sure if you meant that Mush one decade rule was better than 2 other govts. But if you meant that then you have to consider an important factor that Pakistan received Billion of aids due to war in terror and it helped in growth of the government.

 

[Bewal Express]

I am not sure if you meant that Mush one decade rule was better than 2 other govts. But if you meant that then you have to consider an important factor that Pakistan received Billion of aids due to war in terror and it helped in growth of the government.

Mush made mistakes including the disastrous NRO but there is no doubt he left the country in a decent economic state- Just look at the basic facts, in our entire history we had only borrowed $37bn, just look at the end of the 10 years of the crooks? Where did the money go, yes London, Dubai, Aus etc. BTW i am still waiting for explanation on Rockingham

 

[Bewal Express]

Bhai, I will respond to the BBC link later.

Coming to your message, I agree that PTI is not be blamed for all the faults. No debate on this.

But my question/concern is something else: I am trying to highlight my concerns that the PTI govt is not doing different from its predecessors so how can I expect different results? In your own words, you have called other parties as corrupt or not political parties as they were only interested in minting money because of the result of the same policies that are being currently executed by this PTI govt.

So, I would like to be corrected in knowing how are PTI govt economic policies different than the previous government.

The PTI is not in fault for any of these, it didnt take the loans, it didnt steal the billions and it didnt destroy the state institutions, just look at every state institution and look at the losses and thefts.

 

[Bewal Express]

Bhai, I will respond to the BBC link later.

Coming to your message, I agree that PTI is not be blamed for all the faults. No debate on this.

But my question/concern is something else: I am trying to highlight my concerns that the PTI govt is not doing different from its predecessors so how can I expect different results? In your own words, you have called other parties as corrupt or not political parties as they were only interested in minting money because of the result of the same policies that are being currently executed by this PTI govt.

So, I would like to be corrected in knowing how are PTI govt economic policies different than the previous government.

For a start the PTI has tried not to go to the IMF but looking at how much the country has to pay back it may not have much choice. It needs to cut expenditure and increase taxes, neither of which will go down well to struggling country and i dont they will do it on the scale needed. This is the legacy of 10 years of theft and plunder.

 

[natkhat-shahzada]

Mush made mistakes including the disastrous NRO but there is no doubt he left the country in a decent economic state- Just look at the basic facts, in our entire history we had only borrowed $37bn, just look at the end of the 10 years of the crooks? Where did the money go, yes London, Dubai, Aus etc. BTW i am still waiting for explanation on Rockingham

FYI: You have missed the point again. I mentioned about the billions of dollars that Mush received due to war on terror. Mush was the one under whose rule the vicious cirlce of circle debt started which led to loadshedding on mass scale. He didn't raise the petrol price when the international oil price jumped from 50 to 80 because there an election coming in a year.

 

[natkhat-shahzada]

For a start the PTI has tried not to go to the IMF but looking at how much the country has to pay back it may not have much choice. It needs to cut expenditure and increase taxes, neither of which will go down well to struggling country and i dont they will do it on the scale needed. This is the legacy of 10 years of theft and plunder.

Question is again: How is PTI's policy different than the government who were theives (in your words). If it is not different then how come PTI's govt is not thief?

 

[Bewal Express]

Question is again: How is PTI's policy different than the government who were theives (in your words). If it is not different then how come PTI's govt is not thief?

The reason I call both the family businesses​ thieves is because they are, their whole raison detre was to use public funds so that they stay in power. As far as the PTI is concerned, it has been slow to reform because these crooks have created what is commonly called a client state so for example anyone arrested will be given bail like AZ and his sister, so for example the LHC reinstates Police suspended for Corruption.

 

[sensible-indian-fan]

No I didn't, the data cited did. Look up.

Saying this, growth rate is very important.

If you you think not, then spare a thought for Indians who keep repeating India is one of the fastest growing economies in the world. Based on what exactly? That's right, growth rate.

You are however confusing growth rate with nominal GDP.

And yes, economies in the East should aim for a higher growth rate that in the West, I will give you a clue, interest rates in Western economies are minimal compared to Eastern economies, which is why, presto, growth rates are higher in the East.

Looks like you misinterpreted my post.

You can't compare growth rates with USA.

You should aim for much much higher because of your low GDP.

Thats why Pak, India, etc are called developing nations.

You mentioned you are fine with low growth rate as long as it is higher than USA, Germany, etc.

Thats only ok if your GDP is comparable to them which its not.

Now as for the merits of debt fuelled growth, that I cant comment on.

What I do know is that debt is not bad per se. As long as its in the serviceable range, debts are recommended.

 

[natkhat-shahzada]

The reason I call both the family businesses​ thieves is because they are, their whole raison detre was to use public funds so that they stay in power. As far as the PTI is concerned, it has been slow to reform because these crooks have created what is commonly called a client state so for example anyone arrested will be given bail like AZ and his sister, so for example the LHC reinstates Police suspended for Corruption.

Shall I consider that PTI have given no policy in about 10 months of their rule and they are just doing what the previous governments are doing? I was expecting more from Asad Umar and thought he had a plan ready which he will execute as soon he takes the charge of Finance Minister.

I will end the discussion on this here as we are moving in circles as you keep repeating the same thing and I keep asking the same thing.

Nice talking to you. Always help in knowing the other persceptive. Would respond to your BBC link too!

 

[cricketjoshila]

[MENTION=142162]Napa[/MENTION]

 

[Technics 1210]

Looks like you misinterpreted my post.

You can't compare growth rates with USA.

You should aim for much much higher because of your low GDP.

Thats why Pak, India, etc are called developing nations.

You mentioned you are fine with low growth rate as long as it is higher than USA, Germany, etc.

Thats only ok if your GDP is comparable to them which its not.

Now as for the merits of debt fuelled growth, that I cant comment on.

What I do know is that debt is not bad per se. As long as its in the serviceable range, debts are recommended.

You are making the same mistake, you are comparing growth rate with nominal GDP value. Yes 1% of a Trillion is more than 3% of a Billion, but if you have £100000 in BANK A at a rate of 1%, and £100000 in Bank B at a rate of 3%, which bank will return £MILLION first? Rates are everything when it comes to growth.

Why can’t I compare growth rates with other economies? You seem to be singling out my comparison with the US, I also mentioned UK and Germany.

When you say aim for much much higher, higher what GDP? This is only possible if growth rates are higher. I also disagree that Pakistan, China, and India are developing nations, these economies are emerging markets. The potential is immense.

Though interest rates typically reflect growth rates which is why if I bank £1000 in the USA, and £1000 in Pakistan, £1000 in India, and a £1000 in China, by the end of the year, the later 3 will return more than the US, UK, and Germany based on rates alone. However if you ask me to choose been steady and stable growth versus fluctuating growth, I would pick stability every time.

In the end the only number that matters is the purchasing power once expenditure is subtracted from income for an individual. This is why GDP, GDP per Capita, GDP to Debt ratio, are meaningless without context, because while the numbers provide an indication the numbers do not provide insight into wealth distribution within an economy which what matter to an individual and moreover how GDP is calculated.

This is where debt per capita comes in, and when you subtract debt per capita from GDP per capita, the result is a negative figure per capita in the top economies, meaning what every citizen owes. Pakistan, China, and Indian citizens are less indebted compared to the Western economies :

https://en.wikipedia.org/wiki/List_of_countries_by_external_debt (Sort column 5)

Is debt good? Not really. Can it be serviced? Short answer no; when you look at the national debts of US, UK, and Japan. If the debts were serviced, the debt would decline, instead the debt is increasing year on year, and if the likes of UK, USA and Japan governments were businesses, they’d be bust by now.

So I rather prefer Pakistan’s growth rate to be stable, non-relying on debt, and have a higher growth rate compared to Western economies because the return and potential on my investment is greater.

 

[sensible-indian-fan]

You are making the same mistake, you are comparing growth rate with nominal GDP value. Yes 1% of a Trillion is more than 3% of a Billion, but if you have £100000 in BANK A at a rate of 1%, and £100000 in Bank B at a rate of 3%, which bank will return £MILLION first? Rates are everything when it comes to growth.

Why can’t I compare growth rates with other economies? You seem to be singling out my comparison with the US, I also mentioned UK and Germany.

When you say aim for much much higher, higher what GDP? This is only possible if growth rates are higher. I also disagree that Pakistan, China, and India are developing nations, these economies are emerging markets. The potential is immense.

Though interest rates typically reflect growth rates which is why if I bank £1000 in the USA, and £1000 in Pakistan, £1000 in India, and a £1000 in China, by the end of the year, the later 3 will return more than the US, UK, and Germany based on rates alone. However if you ask me to choose been steady and stable growth versus fluctuating growth, I would pick stability every time.

In the end the only number that matters is the purchasing power once expenditure is subtracted from income for an individual. This is why GDP, GDP per Capita, GDP to Debt ratio, are meaningless without context, because while the numbers provide an indication the numbers do not provide insight into wealth distribution within an economy which what matter to an individual and moreover how GDP is calculated.

This is where debt per capita comes in, and when you subtract debt per capita from GDP per capita, the result is a negative figure per capita in the top economies, meaning what every citizen owes. Pakistan, China, and Indian citizens are less indebted compared to the Western economies :

https://en.wikipedia.org/wiki/List_of_countries_by_external_debt (Sort column 5)

Is debt good? Not really. Can it be serviced? Short answer no; when you look at the national debts of US, UK, and Japan. If the debts were serviced, the debt would decline, instead the debt is increasing year on year, and if the likes of UK, USA and Japan governments were businesses, they’d be bust by now.

So I rather prefer Pakistan’s growth rate to be stable, non-relying on debt, and have a higher growth rate compared to Western economies because the return and potential on my investment is greater.

1. Nah not singling out USA. I meant the western nations you refered to.

2. I am no economist but debt is not like home loan where you pay it off. As long as you have the ABILITY to pay the debt...debt increasing is not an issue. You are using it to fuel growth, provide more jobs, improve your economy.

3. Now whether USA has gone too far with this is something I don't know. But your premise of having little to no debt seems faulty to me.

4. Your view is certainly quite contrary to the views I see by most people. Slightly higher growth rate compared to Western nations means nothing. Earlier Pakistan used to be 3% right? What exactly did it achieve with this? China on the other hand, lifted a HUGE amount of its population out of poverty.

5. Now I know GDP is not everything. Many people are crowing about our GDP growth but there is a massive massive employment issue in our country (we are experiencing jobless growth). So yeah stats ain't everything but usually they do mean something.

If you are happy with 3% growth (without debts) by comparing it to USA...by all means go ahead. But that's a very unique perspective. Pakistan needs to grow a LOT faster to change the lifestyle of its people.

 

[sshakir411]

Doctor, nurses, engineers and what not..everyone and their mother who doesn’t know anything about economics making big claims. The fact is the economy is already in a better place than it has been in the last 5 years.

 

[Technics 1210]

If you are happy with 3% growth (without debts) by comparing it to USA...by all means go ahead. But that's a very unique perspective. Pakistan needs to grow a LOT faster to change the lifestyle of its people.

Yet even in 2018 with Pakistan's growth above 5%, being higher than the USA, UK, and Germany, you would still have a problem with the comparison. Your initial comment was why I was comparing with USA growth, but it seems you have come round to the point, that growth is very different to nominal GDP.

Not to say anything of the fact that only in Lalaland is debt considered wealth.

 

[jusarrived]

It’s not going to be easy and i don’t think it will happen anytime soon . At this point priority should be to ensure Pak doesn’t get into further mess , get stable and then may be phase of growth in 5 years time . They need to figure out a way to reduce debt and also continue spending on things which can trigger growth . That’s a tough one .

Also unfortunately I think the world economy is showing signs of slowness , may not be recession but we may take a pause for few years . That’s not going to help Pakistan either .

 

[jusarrived]

Yet even in 2018 with Pakistan's growth above 5%, being higher than the USA, UK, and Germany, you would still have a problem with the comparison. Your initial comment was why I was comparing with USA growth, but it seems you have come round to the point, that growth is very different to nominal GDP.

Not to say anything of the fact that only in Lalaland is debt considered wealth.

Pakistan needs to go through a phase of 10-15 years where it grows 8-12% . It makes no sense for Pakistan or India to compare with the west .

 

[Napa]

[MENTION=142162]Napa[/MENTION]

Nah, IK isn't capable. Any country where the Army has so much power and the generals have got so rich, cannot progress economically. A quote that used to describe Prussia "that it was not a country with an army but an army with a country" now fits Pakistan.

Quite simply, if Pakistan is to modernize its economy, it must free its entrepreneurs from the establishment's (the pillar of which is the Army) domination. NS has been the Pakistani leader who has shown the most courage in the attempt of the civilian government to tame the Army, and possibly was succeeding before he was foiled by IK's street protests. In comparison to NS, IK is a puppet, as the New York Times writes "it is the military that ultimately controls foreign and defense policy".

https://www.nytimes.com/2018/09/04/world/asia/pakistan-india-talks.html

To have development, you need a strong and sensible leader, instead you have IK who thinks that being able to borrow money from some of the worst regimes in the world is an achievement and spends his time insulting the leader of his neighbor as a "small man".

Take a look at what has happened since IK became the PM.

1) The Opposition has been decimated by turning the judicial system on them. With the democratic opposition gone, we have a concentration of power. Now, if the power is concentrated in some capable leader who is focussed on economic development, like Lee Kuan Yew of Singapore or more recently Sheik Hasina of Bangladesh, then the country can indeed benefit economically. Unfortunately for Pakistan, via IK the power actually has moved to the military, which has proven to be a disaster for the economy the last 70 years, and shows no signs of changing.

2) It isn't hard, because of its low per cap GDP and reasonably capable people, what Pakistan needs for an economic boom is to provide investors and entrepreneurs security for their investments. The insecurity bred by the terrorists bred by the security establishment to wage a war with India causes India a small amount of damage but the Pakistani economy a huge amount of damage.

The perception in Pakistan that they came out on top in the recent confrontation with India has set back any chance of the economy improving by ten to twenty years, as the military’s prestige among the population has risen.

cric_man wrote one of the more articulate but still essentially detached from reality apologia for the Pakistani Army:

Out of the three sources you quoted, one is Indian with the usual Indian bias so I will not even address that. Aljazeera's article is from 2008 with one source "Ayesha Saddiqa" a known Military critic.

Well, here is one from “The Economist”:
“Pakistan’s army is to blame for the poverty of the country’s 208m citizens”
https://www.economist.com/leaders/2...for-the-poverty-of-the-countrys-208m-citizens

Another one from Washington Post:
Pakistani military dominates the country getting the best of everything.
http://www.washingtonpost.com/wp-dyn...062601826.html

These foundation do have an advantage that they get land essentially for free and can utlize expertise (in case of Shaheen airlines Pilots/Engineers from PAF on deputation) but in no way do they impede private enterprises.

Private sector firms cannot compete with government firms simply because the government can subsidize its own firms and can also apply “pressure” to beat the competition whenever necessary.

I mean, look at the state of the economies of India and Pakistan. India exports to the US:

Pharmaceuticals ($6.1 billion), mineral fuels ($2.7 billion), machinery ($2.5 billion) and $28.1 billion of services (telecommunications, computer, and information services, research and development, and travel sectors). Note to [MENTION=102121]hafeezrocks[/MENTION]: Space programs are a part of technological advancement that enables India to export every year to the world 1,000X the $75 million it cost to send Mangalyaan to Mars.

Pakistan exports to the US:

Miscellaneous textile articles ($1.3 billion), knit apparel ($725 million), woven apparel ($572 million), leather products ($111 million), and cotton ($104 million).

U.S. foreign direct investment (FDI) in India (stock) was $44.5 billion in 2017, and U.S. foreign direct investment (FDI) in Pakistan (stock) was $0.5 billion in 2017.

https://ustr.gov/countries-regions/south-central-asia/india
https://ustr.gov/countries-regions/south-central-asia/pakistan

In one sentence, over the last 25 years India has developed modern industries and Pakistan has not.

Either this is due to the difference in the systems of the 2 countries, or Pakistanis are not as capable as Indians. Given that ethnically there doesn’t seem to be a whole lot of difference between Pakistani Punjabis and Indian Punjabis, the difference must be in the systems. I see many good Pakistani doctors and professors in the US. There are many posters in this forum who see the obvious like [MENTION=138016]natkhat-shahzada[/MENTION], [MENTION=138980]TalentSpotterPk[/MENTION], [MENTION=142317]Loralai[/MENTION] etc.

Pakistanis may keep fooling themselves and fantasizing that IK will change the country, but it won’t happen.

3) Much has been said about corruption that existed in previous governments. Anyone who believes that the current regime doesn’t have the same actors only needs to see the pic posted by [MENTION=131701]Mamoon[/MENTION] about the 2008 and 2018 governments.

The out of control judicial system is now being used to shake down entrepreneurs. Pakistan’s most successful entrepreneur Malik Riaz Hussain was recently shaken down for $3 billion by the Supreme Court.

https://fp.brecorder.com/2019/03/20190327458747/

Is Hussain corrupt? Yes, of course. It is impossible to build anything without paying off the system. But the $3 billion seems to be a money grab by the establishment. It leaves the entrepreneur with nothing to invest.

Dirubhai Ambani was corrupt, but he and his elder son created enough industries which created wealth of hundreds of billions of dollars. It would be nice to have entrepreneurs who are not corrupt, but corrupt entrepreneurs and politicians are better than stagnation and having an economy stuck producing textiles and soccer balls.

I am posting to this forum after almost two weeks, and mainly because my friend Cricketjoshila mentioned me. I am probably not going to respond to the usual suspects unless I see something intelligent. I am a bit tired of repeating myself. The bottom line is that Pakistan is the country of Pakistanis. You can lead a horse to the water but you can’t make him drink.
[MENTION=134809]sensible-indian-fan[/MENTION] [MENTION=149096]JBFire[/MENTION] [MENTION=136588]CricketCartoons[/MENTION] [MENTION=138254]Syed1[/MENTION] [MENTION=141520]troodon[/MENTION] [MENTION=142322]oneindia[/MENTION]

 

[Gharib Aadmi]

Yes, with Imran Khan Pakistan has a once in a generation leader with enough political clout to make the tough decisions necessary to improve the economy. The last leader Pakistan had with this much clout was Bhutto who unfortunately took Pakistan toward Socialism.

So far the govt has cut subsidies on gas, hajj, metro bus, etc.
They have let the rupee depreciate, instead of inflating it like the previous administration did.
Imran Khan has talked about wealth creation, how that is the what is ultimately necessary to have a prosperous country. Also he has mentioned the need to ease the cost of doing business.

What will be difficult to do will be to privatize the state run firms which lose billions of dollars per yer, with the biggest culprits being PIA, the Steel Mill, and the Railways.

The next 2 to 3 years will be tough for Pakistan, but if PTI does the necessary reforms Pakistan will be in a good position going forward.

 

[SensiblePakFan]

Yes, with Imran Khan Pakistan has a once in a generation leader with enough political clout to make the tough decisions necessary to improve the economy. The last leader Pakistan had with this much clout was Bhutto who unfortunately took Pakistan toward Socialism.

So far the govt has cut subsidies on gas, hajj, metro bus, etc.
They have let the rupee depreciate, instead of inflating it like the previous administration did.
Imran Khan has talked about wealth creation, how that is the what is ultimately necessary to have a prosperous country. Also he has mentioned the need to ease the cost of doing business.

What will be difficult to do will be to privatize the state run firms which lose billions of dollars per yer, with the biggest culprits being PIA, the Steel Mill, and the Railways.

The next 2 to 3 years will be tough for Pakistan, but if PTI does the necessary reforms Pakistan will be in a good position going forward.

Yup, these reforms will eventually bring good benefits.

 

[Gharib Aadmi]

[MENTION=142162]Napa[/MENTION]

Nah, IK isn't capable. Any country where the Army has so much power and the generals have got so rich, cannot progress economically. A quote that used to describe Prussia "that it was not a country with an army but an army with a country" now fits Pakistan.

Pakistan Army comes from Pakistan, not Switzerland, or Mars, or Westeros. Its a reflection of the society, and Pakistan is a corrupt country, whether its the bureaucracy, politicians, judiciary, or even the common man, so it shouldn't be a surprise that the Army is also corrupt.

Quite simply, if Pakistan is to modernize its economy, it must free its entrepreneurs from the establishment's (the pillar of which is the Army) domination. NS has been the Pakistani leader who has shown the most courage in the attempt of the civilian government to tame the Army, and possibly was succeeding before he was foiled by IK's street protests. In comparison to NS, IK is a puppet, as the New York Times writes "it is the military that ultimately controls foreign and defense policy".https://www.nytimes.com/2018/09/04/world/asia/pakistan-india-talks.html

The army controlled the foreign policy and defense in NS time also, the same with the PPP government. By not challenging the army on a battle he cant win right now, he has positioned himself to use his political capital on making tough economic decisions, such as ending subsidies, raising taxes, privatizing state run firms. Had he challenged the Army they would have simply used another political party to get rid of him. Speaking of courage, if NS had any he would have admitted that he came through the Amy in the first place.

To have development, you need a strong and sensible leader, instead you have IK who thinks that being able to borrow money from some of the worst regimes in the world is an achievement and spends his time insulting the leader of his neighbor as a "small man".

The country is not in a position to turn down investments from the worst regimes in the world. Beggars cant be choosers. And as for as insulting Modi, sushma swarj insulted him first if i remember correctly, and at least he was a gentleman and did not insult her back. He could have used the same insult that PML N defense minister did for Shireen Mazari.

2) It isn't hard, because of its low per cap GDP and reasonably capable people, what Pakistan needs for an economic boom is to provide investors and entrepreneurs security for their investments. The insecurity bred by the terrorists bred by the security establishment to wage a war with India causes India a small amount of damage but the Pakistani economy a huge amount of damage.

They have realized their mistakes in arming those groups, and they have taken action. Pakistan is alot safer now. thousands of soldiers are dead, they have one of the highest officer to soldier death ratio in the world. The upcoming generation of officers is very much anti militant groups, as they have been fighting them for the last 15 years.

Private sector firms cannot compete with government firms simply because the government can subsidize its own firms and can also apply “pressure” to beat the competition whenever necessary.

Yes, this is true, but the biggest culprits of state owned firms that are hurting the country are run by civilans. They are PIA, the railways, and the Steel Mill. Its hard to get rid of them as there are powerful unions involved. If Imran Khan, or any other civilian, is able to privatize them, then he can be in a position to privatize the military run ones.

In one sentence, over the last 25 years India has developed modern industries and Pakistan has not.Either this is due to the difference in the systems of the 2 countries, or Pakistanis are not as capable as Indians. Given that ethnically there doesn’t seem to be a whole lot of difference between Pakistani Punjabis and Indian Punjabis, the difference must be in the systems. I see many good Pakistani doctors and professors in the US. There are many posters in this forum who see the obvious like [MENTION=138016]natkhat-shahzada[/MENTION], [MENTION=138980]TalentSpotterPk[/MENTION], [MENTION=142317]Loralai[/MENTION] etc.

A better comparison would be by caste among Indian Punjabis and baradari among Pakistani ones. For ex does a Indian Punjabi who is Brahmin have the same economic success as a Punjabi dalit? The same way some baradari might have more success than other ones. Also the Pakistani in US who came are not reflective of the common man in Pakistan. Same goes for Indians who are here.

Pakistanis may keep fooling themselves and fantasizing that IK will change the country, but it won’t happen.3) Much has been said about corruption that existed in previous governments. Anyone who believes that the current regime doesn’t have the same actors only needs to see the pic posted by [MENTION=131701]Mamoon[/MENTION] about the 2008 and 2018 governments.

Every new government that comes blames the prior ones for corruption. Why should Imran Khan be any different ?

The out of control judicial system is now being used to shake down entrepreneurs. Pakistan’s most successful entrepreneur Malik Riaz Hussain was recently shaken down for $3 billion by the Supreme Court.https://fp.brecorder.com/2019/03/20190327458747/Is Hussain corrupt? Yes, of course. It is impossible to build anything without paying off the system. But the $3 billion seems to be a money grab by the establishment. It leaves the entrepreneur with nothing to invest.

My family, along with many others who live abroad had their land looted by the land mafia. My parents saved money for years, making sacrifices so they could have some land back home, only to see someone else leech it it from them. If it happens to you or your family, then you might feel different about thieves.

 

[Napa]

Pakistan Army comes from Pakistan, not Switzerland, or Mars, or Westeros. Its a reflection of the society, and Pakistan is a corrupt country, whether its the bureaucracy, politicians, judiciary, or even the common man, so it shouldn't be a surprise that the Army is also corrupt.

Thanks for your reply. I mostly agree with your comments.

Corruption was/is also widespread in India. However, after liberalization was introduced in the early 1990s and the government was gradually taken out of the economy it has led to modern industries.

The army controlled the foreign policy and defense in NS time also, the same with the PPP government. By not challenging the army on a battle he cant win right now, he has positioned himself to use his political capital on making tough economic decisions, such as ending subsidies, raising taxes, privatizing state run firms. Had he challenged the Army they would have simply used another political party to get rid of him. Speaking of courage, if NS had any he would have admitted that he came through the Amy in the first place.

The ending of subsidies is also being pushed by the IMF which is not going to lend Pakistan money unless it reduces its government deficits. It is not that IMF is intrinsically bad, it simply wants to have a reasonable chance of getting repaid if it lends money.

The country is not in a position to turn down investments from the worst regimes in the world. Beggars cant be choosers. And as for as insulting Modi, sushma swarj insulted him first if i remember correctly, and at least he was a gentleman and did not insult her back. He could have used the same insult that PML N defense minister did for Shireen Mazari.

Fortunately for India, Swaraj is not the PM!

They have realized their mistakes in arming those groups, and they have taken action. Pakistan is alot safer now. thousands of soldiers are dead, they have one of the highest officer to soldier death ratio in the world. The upcoming generation of officers is very much anti militant groups, as they have been fighting them for the last 15 years.

If the support for the terrorists goes down then it will show up as fewer terrorists incidents, both in Pakistan and India. Let's hope that is the direction in which we are headed.

Yes, this is true, but the biggest culprits of state owned firms that are hurting the country are run by civilans. They are PIA, the railways, and the Steel Mill. Its hard to get rid of them as there are powerful unions involved. If Imran Khan, or any other civilian, is able to privatize them, then he can be in a position to privatize the military run ones.

The government needs to reduce its footprint in the economy, whether it be government bureaucrats or army generals.

A better comparison would be by caste among Indian Punjabis and baradari among Pakistani ones. For ex does a Indian Punjabi who is Brahmin have the same economic success as a Punjabi dalit? The same way some baradari might have more success than other ones. Also the Pakistani in US who came are not reflective of the common man in Pakistan. Same goes for Indians who are here.

True, "Punjabis" are not homogenous.

Every new government that comes blames the prior ones for corruption. Why should Imran Khan be any different ?

Unfortunately there is no good reason for IK to be different.

My family, along with many others who live abroad had their land looted by the land mafia. My parents saved money for years, making sacrifices so they could have some land back home, only to see someone else leech it it from them. If it happens to you or your family, then you might feel different about thieves.

Yes, being personally victimized gives people a different perspective. I was not trying to defend corrupt businessmen, only making the point that government in the economy is absolutely crushing as it produces little but grabs as much as it can.

 

[Pete Rose]

[MENTION=142162]Napa[/MENTION]

Nah, IK isn't capable. Any country where the Army has so much power and the generals have got so rich, cannot progress economically. A quote that used to describe Prussia "that it was not a country with an army but an army with a country" now fits Pakistan.

Pakistan Army comes from Pakistan, not Switzerland, or Mars, or Westeros. Its a reflection of the society, and Pakistan is a corrupt country, whether its the bureaucracy, politicians, judiciary, or even the common man, so it shouldn't be a surprise that the Army is also corrupt.

Quite simply, if Pakistan is to modernize its economy, it must free its entrepreneurs from the establishment's (the pillar of which is the Army) domination. NS has been the Pakistani leader who has shown the most courage in the attempt of the civilian government to tame the Army, and possibly was succeeding before he was foiled by IK's street protests. In comparison to NS, IK is a puppet, as the New York Times writes "it is the military that ultimately controls foreign and defense policy".https://www.nytimes.com/2018/09/04/world/asia/pakistan-india-talks.html

The army controlled the foreign policy and defense in NS time also, the same with the PPP government. By not challenging the army on a battle he cant win right now, he has positioned himself to use his political capital on making tough economic decisions, such as ending subsidies, raising taxes, privatizing state run firms. Had he challenged the Army they would have simply used another political party to get rid of him. Speaking of courage, if NS had any he would have admitted that he came through the Amy in the first place.

To have development, you need a strong and sensible leader, instead you have IK who thinks that being able to borrow money from some of the worst regimes in the world is an achievement and spends his time insulting the leader of his neighbor as a "small man".

The country is not in a position to turn down investments from the worst regimes in the world. Beggars cant be choosers. And as for as insulting Modi, sushma swarj insulted him first if i remember correctly, and at least he was a gentleman and did not insult her back. He could have used the same insult that PML N defense minister did for Shireen Mazari.

2) It isn't hard, because of its low per cap GDP and reasonably capable people, what Pakistan needs for an economic boom is to provide investors and entrepreneurs security for their investments. The insecurity bred by the terrorists bred by the security establishment to wage a war with India causes India a small amount of damage but the Pakistani economy a huge amount of damage.

They have realized their mistakes in arming those groups, and they have taken action. Pakistan is alot safer now. thousands of soldiers are dead, they have one of the highest officer to soldier death ratio in the world. The upcoming generation of officers is very much anti militant groups, as they have been fighting them for the last 15 years.

Private sector firms cannot compete with government firms simply because the government can subsidize its own firms and can also apply “pressure” to beat the competition whenever necessary.

Yes, this is true, but the biggest culprits of state owned firms that are hurting the country are run by civilans. They are PIA, the railways, and the Steel Mill. Its hard to get rid of them as there are powerful unions involved. If Imran Khan, or any other civilian, is able to privatize them, then he can be in a position to privatize the military run ones.

In one sentence, over the last 25 years India has developed modern industries and Pakistan has not.Either this is due to the difference in the systems of the 2 countries, or Pakistanis are not as capable as Indians. Given that ethnically there doesn’t seem to be a whole lot of difference between Pakistani Punjabis and Indian Punjabis, the difference must be in the systems. I see many good Pakistani doctors and professors in the US. There are many posters in this forum who see the obvious like [MENTION=138016]natkhat-shahzada[/MENTION], [MENTION=138980]TalentSpotterPk[/MENTION], [MENTION=142317]Loralai[/MENTION] etc.

A better comparison would be by caste among Indian Punjabis and baradari among Pakistani ones. For ex does a Indian Punjabi who is Brahmin have the same economic success as a Punjabi dalit? The same way some baradari might have more success than other ones. Also the Pakistani in US who came are not reflective of the common man in Pakistan. Same goes for Indians who are here.

Pakistanis may keep fooling themselves and fantasizing that IK will change the country, but it won’t happen.3) Much has been said about corruption that existed in previous governments. Anyone who believes that the current regime doesn’t have the same actors only needs to see the pic posted by [MENTION=131701]Mamoon[/MENTION] about the 2008 and 2018 governments.

Every new government that comes blames the prior ones for corruption. Why should Imran Khan be any different ?

The out of control judicial system is now being used to shake down entrepreneurs. Pakistan’s most successful entrepreneur Malik Riaz Hussain was recently shaken down for $3 billion by the Supreme Court.https://fp.brecorder.com/2019/03/20190327458747/Is Hussain corrupt? Yes, of course. It is impossible to build anything without paying off the system. But the $3 billion seems to be a money grab by the establishment. It leaves the entrepreneur with nothing to invest.

My family, along with many others who live abroad had their land looted by the land mafia. My parents saved money for years, making sacrifices so they could have some land back home, only to see someone else leech it it from them. If it happens to you or your family, then you might feel different about thieves.

This post seems to indicate that the writer has woken up from coma after 15 years.

 

[TalentSpotterPk]

[MENTION=142162]Napa[/MENTION]

Nah, IK isn't capable. Any country where the Army has so much power and the generals have got so rich, cannot progress economically. A quote that used to describe Prussia "that it was not a country with an army but an army with a country" now fits Pakistan.

Pakistan Army comes from Pakistan, not Switzerland, or Mars, or Westeros. Its a reflection of the society, and Pakistan is a corrupt country, whether its the bureaucracy, politicians, judiciary, or even the common man, so it shouldn't be a surprise that the Army is also corrupt.

Quite simply, if Pakistan is to modernize its economy, it must free its entrepreneurs from the establishment's (the pillar of which is the Army) domination. NS has been the Pakistani leader who has shown the most courage in the attempt of the civilian government to tame the Army, and possibly was succeeding before he was foiled by IK's street protests. In comparison to NS, IK is a puppet, as the New York Times writes "it is the military that ultimately controls foreign and defense policy".https://www.nytimes.com/2018/09/04/world/asia/pakistan-india-talks.html

The army controlled the foreign policy and defense in NS time also, the same with the PPP government. By not challenging the army on a battle he cant win right now, he has positioned himself to use his political capital on making tough economic decisions, such as ending subsidies, raising taxes, privatizing state run firms. Had he challenged the Army they would have simply used another political party to get rid of him. Speaking of courage, if NS had any he would have admitted that he came through the Amy in the first place.

To have development, you need a strong and sensible leader, instead you have IK who thinks that being able to borrow money from some of the worst regimes in the world is an achievement and spends his time insulting the leader of his neighbor as a "small man".

The country is not in a position to turn down investments from the worst regimes in the world. Beggars cant be choosers. And as for as insulting Modi, sushma swarj insulted him first if i remember correctly, and at least he was a gentleman and did not insult her back. He could have used the same insult that PML N defense minister did for Shireen Mazari.

2) It isn't hard, because of its low per cap GDP and reasonably capable people, what Pakistan needs for an economic boom is to provide investors and entrepreneurs security for their investments. The insecurity bred by the terrorists bred by the security establishment to wage a war with India causes India a small amount of damage but the Pakistani economy a huge amount of damage.

They have realized their mistakes in arming those groups, and they have taken action. Pakistan is alot safer now. thousands of soldiers are dead, they have one of the highest officer to soldier death ratio in the world. The upcoming generation of officers is very much anti militant groups, as they have been fighting them for the last 15 years.

Private sector firms cannot compete with government firms simply because the government can subsidize its own firms and can also apply “pressure” to beat the competition whenever necessary.

Yes, this is true, but the biggest culprits of state owned firms that are hurting the country are run by civilans. They are PIA, the railways, and the Steel Mill. Its hard to get rid of them as there are powerful unions involved. If Imran Khan, or any other civilian, is able to privatize them, then he can be in a position to privatize the military run ones.

In one sentence, over the last 25 years India has developed modern industries and Pakistan has not.Either this is due to the difference in the systems of the 2 countries, or Pakistanis are not as capable as Indians. Given that ethnically there doesn’t seem to be a whole lot of difference between Pakistani Punjabis and Indian Punjabis, the difference must be in the systems. I see many good Pakistani doctors and professors in the US. There are many posters in this forum who see the obvious like [MENTION=138016]natkhat-shahzada[/MENTION], [MENTION=138980]TalentSpotterPk[/MENTION], [MENTION=142317]Loralai[/MENTION] etc.

A better comparison would be by caste among Indian Punjabis and baradari among Pakistani ones. For ex does a Indian Punjabi who is Brahmin have the same economic success as a Punjabi dalit? The same way some baradari might have more success than other ones. Also the Pakistani in US who came are not reflective of the common man in Pakistan. Same goes for Indians who are here.

Pakistanis may keep fooling themselves and fantasizing that IK will change the country, but it won’t happen.3) Much has been said about corruption that existed in previous governments. Anyone who believes that the current regime doesn’t have the same actors only needs to see the pic posted by [MENTION=131701]Mamoon[/MENTION] about the 2008 and 2018 governments.

Every new government that comes blames the prior ones for corruption. Why should Imran Khan be any different ?

The out of control judicial system is now being used to shake down entrepreneurs. Pakistan’s most successful entrepreneur Malik Riaz Hussain was recently shaken down for $3 billion by the Supreme Court.https://fp.brecorder.com/2019/03/20190327458747/Is Hussain corrupt? Yes, of course. It is impossible to build anything without paying off the system. But the $3 billion seems to be a money grab by the establishment. It leaves the entrepreneur with nothing to invest.

My family, along with many others who live abroad had their land looted by the land mafia. My parents saved money for years, making sacrifices so they could have some land back home, only to see someone else leech it it from them. If it happens to you or your family, then you might feel different about thieves.

Quality Post.

 

[Savak]

Asad Umar’s economic shock therapy — crazy or genius?

By M Bilal Lakhani

Published: April 7, 2019

Chemotherapy makes a cancer patient feel even more sick and miserable, before it defeats cancer. Nausea, vomiting and eventually losing hair is a painful cost of the treatment, not the disease. Similarly, Asad Umar is giving chemotherapy to a sick Pakistani economy today. And the side effects of the chemotherapy — inflation, depreciation of the rupee, slowing growth — is the painful part and parcel of the treatment. Should the Pakistani people protest the disease or the medicine?

Miftah Ismail delivered the Pakistani economy on a stretcher to Asad Umar, with the economy gasping for breath in the emergency room. Like any doctor, Asad’s first job was to stabilise the patient and make sure he survives, regardless of how painful the treatment may be. This is the shock therapy we are experiencing today the side effects of which are expressing themselves as inflation, depreciation of the rupee and slowed-down growth. Is there a method to the madness in the PTI’s economic policies or are they just incompetent? In this column, I’ll unpack depreciation of the rupee, inflation and the rise in energy prices to understand whether Asad Umar is overprescribing medicine or if we need to give him more time.

Let’s take depreciation first. The PTI inherited a $19 billion current account deficit per year. This means we owe the world $19 billion in imported goods and debt liabilities every year, which we don’t have the money to pay for.


Why did this happen? Much has been said about Ishaq Dar’s fetish for keeping the dollar-rupee rate stable but the real game was subsidising elite and non-elite consumption. Here’s how this works: suppose we imported a chocolate for $1. This was sold in stores for 100 rupees last year, versus the 140 rupees at real exchange rate. The difference was subsidised by our foreign exchange reserves being used to keep the rupee artificially high, which we now have to borrow more dollars to repay. Essentially, the previous government was subsidising private consumption, with money they didn’t have!

The first sour medicine Asad Umar administered was devaluing the rupee — or bringing it closer to its real price. This helps eliminate subsidies on elite consumption like the import of cars, Swiss chocolate and pet food (yes, the PML-N government was indirectly subsidising these!). This hurts all of us because some of the goods we need like food and medicine are also imported. But the medication is working. We are learning to live within our means and imports are beginning to come down sharply (current account deficit was down to 72% in February).

Now, let’s talk about inflation, being fuelled primarily by devaluation/depreciation, which I explained above, plus the rise in energy prices. Let’s take gas as an example. Previous governments were selling gas at subsidised rates and now the PTI is removing these subsidies. Suppose gas costs 100 rupees per unit but the government was selling it at 60 rupees. Who was paying for those 40 rupees? The Pakistani taxpayer who takes on more government debt to pay for these subsidies.

Now, the PTI government is moving towards a more sustainable financial path — selling gas, petrol and electricity for their actual prices and reducing wasteful consumption. No politician wants to be the one raising prices but the pain is a sign that the medication is working. The PTI is putting the interests of the country — financial stabilisation — ahead of its own interests, which would be to keep prices artificially low and stay popular.

Even if it means they’re going to die, there’s a reason why some cancer patients choose not to get treated for cancer. The treatment is so debilitating that they prefer spending their last few weeks travelling or spending time with family. The good news is that Pakistan is a young patient and our prognosis is strong.

Once the initial shock and side effects of the chemotherapy wear off, Pakistan has a very bright future ahead. We have a young, dynamic population of 200 million and our close friend happens to be the world’s next superpower. All we have to do today is to be patient and channel our energy into fighting the disease, not the medication!

Published in The Express Tribune, April 7th, 2019.

Link: https://tribune.com.pk/story/1945004/6-asad-umars-economic-shock-therapy-crazy-genius/

Comments: I would challenge the economist on PP to suggest alternative ideas that the PTI can implement to drastically turn around the economy, so far the usual suspects have mostly been behaving like the PML-N, PPP, Billoo where they run their mouths and have no track record of performance

 

[Haroon786]

Looks like you misinterpreted my post.

You can't compare growth rates with USA.

You should aim for much much higher because of your low GDP.

Thats why Pak, India, etc are called developing nations.

You mentioned you are fine with low growth rate as long as it is higher than USA, Germany, etc.

Thats only ok if your GDP is comparable to them which its not.

Now as for the merits of debt fuelled growth, that I cant comment on.

What I do know is that debt is not bad per se. As long as its in the serviceable range, debts are recommended.

Economic convergence.

 

[Bewal Express]

Asad Umar’s economic shock therapy — crazy or genius?

By M Bilal Lakhani

Published: April 7, 2019

Chemotherapy makes a cancer patient feel even more sick and miserable, before it defeats cancer. Nausea, vomiting and eventually losing hair is a painful cost of the treatment, not the disease. Similarly, Asad Umar is giving chemotherapy to a sick Pakistani economy today. And the side effects of the chemotherapy — inflation, depreciation of the rupee, slowing growth — is the painful part and parcel of the treatment. Should the Pakistani people protest the disease or the medicine?

Miftah Ismail delivered the Pakistani economy on a stretcher to Asad Umar, with the economy gasping for breath in the emergency room. Like any doctor, Asad’s first job was to stabilise the patient and make sure he survives, regardless of how painful the treatment may be. This is the shock therapy we are experiencing today the side effects of which are expressing themselves as inflation, depreciation of the rupee and slowed-down growth. Is there a method to the madness in the PTI’s economic policies or are they just incompetent? In this column, I’ll unpack depreciation of the rupee, inflation and the rise in energy prices to understand whether Asad Umar is overprescribing medicine or if we need to give him more time.

Let’s take depreciation first. The PTI inherited a $19 billion current account deficit per year. This means we owe the world $19 billion in imported goods and debt liabilities every year, which we don’t have the money to pay for.


Why did this happen? Much has been said about Ishaq Dar’s fetish for keeping the dollar-rupee rate stable but the real game was subsidising elite and non-elite consumption. Here’s how this works: suppose we imported a chocolate for $1. This was sold in stores for 100 rupees last year, versus the 140 rupees at real exchange rate. The difference was subsidised by our foreign exchange reserves being used to keep the rupee artificially high, which we now have to borrow more dollars to repay. Essentially, the previous government was subsidising private consumption, with money they didn’t have!

The first sour medicine Asad Umar administered was devaluing the rupee — or bringing it closer to its real price. This helps eliminate subsidies on elite consumption like the import of cars, Swiss chocolate and pet food (yes, the PML-N government was indirectly subsidising these!). This hurts all of us because some of the goods we need like food and medicine are also imported. But the medication is working. We are learning to live within our means and imports are beginning to come down sharply (current account deficit was down to 72% in February).

Now, let’s talk about inflation, being fuelled primarily by devaluation/depreciation, which I explained above, plus the rise in energy prices. Let’s take gas as an example. Previous governments were selling gas at subsidised rates and now the PTI is removing these subsidies. Suppose gas costs 100 rupees per unit but the government was selling it at 60 rupees. Who was paying for those 40 rupees? The Pakistani taxpayer who takes on more government debt to pay for these subsidies.

Now, the PTI government is moving towards a more sustainable financial path — selling gas, petrol and electricity for their actual prices and reducing wasteful consumption. No politician wants to be the one raising prices but the pain is a sign that the medication is working. The PTI is putting the interests of the country — financial stabilisation — ahead of its own interests, which would be to keep prices artificially low and stay popular.

Even if it means they’re going to die, there’s a reason why some cancer patients choose not to get treated for cancer. The treatment is so debilitating that they prefer spending their last few weeks travelling or spending time with family. The good news is that Pakistan is a young patient and our prognosis is strong.

Once the initial shock and side effects of the chemotherapy wear off, Pakistan has a very bright future ahead. We have a young, dynamic population of 200 million and our close friend happens to be the world’s next superpower. All we have to do today is to be patient and channel our energy into fighting the disease, not the medication!

Published in The Express Tribune, April 7th, 2019.

Link: https://tribune.com.pk/story/1945004/6-asad-umars-economic-shock-therapy-crazy-genius/

Comments: I would challenge the economist on PP to suggest alternative ideas that the PTI can implement to drastically turn around the economy, so far the usual suspects have mostly been behaving like the PML-N, PPP, Billoo where they run their mouths and have no track record of performance

None have any idea, they go Geo and Noora twitter accounts and find some craap and then repeat it. [MENTION=131701]Mamoon[/MENTION] [MENTION=138980]TalentSpotterPk[/MENTION]

 

[TalentSpotterPk]

World Bank has projected Pakistan's GDP to be 3.4 % in 2019 and 2.7 % in 2020.


GDP in 2013 was 3.7 % and it was lifted to 5.8 % in 5 years.


Once again Pakistan's Economy has taken Reverse Gear :-(

 

[TalentSpotterPk]

Much worse to come

S. AKBAR ZAIDI

ALL those who had hoped that Pakistan’s economy may have finally hit rock-bottom and may just have turned a corner, and that the wreck created by the finance minister and his team might have stabilised, are in for a rude shock. We are still at the beginning of the huge damage relentlessly being done to Pakistan’s economy by an irresponsible and incompetent management and leadership which has destroyed the economy over the last eight months.

It certainly did not add to anyone’s confidence when the finance minister himself was recently reported to have said that “Pakistan may be going through an economic crisis”, or that we are “near bankruptcy”, a view shared by the adviser to the prime minister on commerce, textile, industry and production and investment who also said that the economy was in a “bad shape”. The governor of the State Bank, agreed, adding his sombre and dire statement about where we are today, warning about dismal prospects in the future, politely saying that growth will ‘moderate significantly”. However, be warned, things are about to get much worse.

Two things need to be pointed out. One, that while the current government did certainly inherit an economy which was desperately seeking reform, after eight months it can’t blame previous governments and has to take responsibility for its own mishandling. After two failed mini-budgets, some introspection is necessary. Second, a look at a few key indicators will only emphasise the point of how bad things have become.


With inflation at its highest in five-and-a-half years, we are only seeing the beginnings of a period of double-digit inflation. The rupee is losing value every other day, adding to this inflation, and will depreciate a great deal more, whether, or especially when, the government gives in to yet another IMF programme.

The rupee is losing value every other day, adding to inflation, and will depreciate a great deal more.

The fiscal deficit is about to hit more than six per cent of GDP, and even a cut in development expenditure will not stop this rot, as defence spending and interest payments continue to rise. Our exports, despite the 35pc devaluation, have barely budged, the circular debt continues to increase, interest rates are also going up making the cost of business even more uncompetitive. One can go on and show a vast array of statistics which unambiguously show that this government has ruined the economy. With the State Bank lowering GDP growth to an eight-year low of around 3.5pc, those begging for money (most of which has already been spent in one way or another) from the four friends we have left, need to think of better alternatives. And tax amnesty schemes are certainly no solution.

There is nothing which represents the complete disarray and disconnect in understanding and thinking about Pakistan’s social and economic issues by this government, and their attempted solution than the two announcements made recently. The first was made by the prime minister of Pakistan on March 28, followed by one made by his finance minister reported the next day.

Prime Minister Imran Khan announced “the biggest and the boldest” poverty alleviation programme of Pakistan called Ehsas, with a number of measures supposedly to address many of the country’s persistent economic problems. This, at a time, when poverty numbers have fallen and poverty has ceased to be Pakistan’s biggest problem, now replaced by huge and visible disparities in income and wealth.

The apparent determination and importance of these measures to the government, were emphasised by the prime minister’s announcement, that he would ask for a constitutional amendment to move Article 38(d) from the ‘Principles of Policy” section into the ‘Fundamental Rights’ section, making the “provision of food, clothing, housing, education and medical relief for citizens who cannot earn a livelihood due to infirmity, sickness or unemployment, a state responsibility”.

Undoubtedly, these are admirable intentions and a part of his Riasat-i-Madina project. But where the money for such grandiose schemes will come from, given the state of the economy, is a complete mystery. A far more robust taxation policy, taxing the very rich and transferring this money to those who deserve it, would address Pakistan’s growing inequality, and might allow social welfare spending as well, but the government fails at such structural measures of reform.

The very next day after the prime minister’s announcement, it was reported that the finance minister had stated that Pakistan was finally about to secure a bailout package from the IMF of between $6 billion and $12bn in late April or early May. These two statements represent a huge disconnect between what the prime minister envisages and how his finance minister thinks the economy ought to be managed.

There is a basic contradiction here between both these aims and positions, and both have diametrically opposite consequences. This should be fairly obvious to anyone, no matter how well intentioned, if they have even a miniscule understanding of how a country’s social and economic policy is managed, and what the consequences of an IMF programme will entail.

The anticipated IMF programme, which is almost a certainty now, is going to make things far worse for all Pakistanis, and especially for the working people already dealing with prospects of a marked economic slowdown and far higher prices. The IMF will further cut the miniscule development expenditure we have left, although defence spending will remain a matter of ‘national security’, hence, not to be touched.

The IMF brings about austerity, stabilisation and cuts the growth rate, it insists on devaluation, and will cause greater inflation by raising utility prices. The fundamental rights in the Constitution, regarding the “provision of food, clothing, housing, education and medical relief for citizens”, are inconsistent with any IMF programme. In fact, at the end of the anticipated IMF programme, we will add many more to the ranks of those who “cannot earn a livelihood due to infirmity, sickness or unemployment”. Perhaps it is best to remind ourselves, there was no IMF in the state of Madina.

 

[TalentSpotterPk]

https://www.dawn.com/news/amp/1474662?

 

[Junaid_ahmed]

Nah, IK isn't capable. Any country where the Army has so much power and the generals have got so rich, cannot progress economically. A quote that used to describe Prussia "that it was not a country with an army but an army with a country" now fits Pakistan.

Quite simply, if Pakistan is to modernize its economy, it must free its entrepreneurs from the establishment's (the pillar of which is the Army) domination. NS has been the Pakistani leader who has shown the most courage in the attempt of the civilian government to tame the Army, and possibly was succeeding before he was foiled by IK's street protests. In comparison to NS, IK is a puppet, as the New York Times writes "it is the military that ultimately controls foreign and defense policy".

https://www.nytimes.com/2018/09/04/world/asia/pakistan-india-talks.html

To have development, you need a strong and sensible leader, instead you have IK who thinks that being able to borrow money from some of the worst regimes in the world is an achievement and spends his time insulting the leader of his neighbor as a "small man".

Take a look at what has happened since IK became the PM.

1) The Opposition has been decimated by turning the judicial system on them. With the democratic opposition gone, we have a concentration of power. Now, if the power is concentrated in some capable leader who is focussed on economic development, like Lee Kuan Yew of Singapore or more recently Sheik Hasina of Bangladesh, then the country can indeed benefit economically. Unfortunately for Pakistan, via IK the power actually has moved to the military, which has proven to be a disaster for the economy the last 70 years, and shows no signs of changing.

2) It isn't hard, because of its low per cap GDP and reasonably capable people, what Pakistan needs for an economic boom is to provide investors and entrepreneurs security for their investments. The insecurity bred by the terrorists bred by the security establishment to wage a war with India causes India a small amount of damage but the Pakistani economy a huge amount of damage.

The perception in Pakistan that they came out on top in the recent confrontation with India has set back any chance of the economy improving by ten to twenty years, as the military’s prestige among the population has risen.

cric_man wrote one of the more articulate but still essentially detached from reality apologia for the Pakistani Army:



Well, here is one from “The Economist”:
“Pakistan’s army is to blame for the poverty of the country’s 208m citizens”
https://www.economist.com/leaders/2...for-the-poverty-of-the-countrys-208m-citizens

Another one from Washington Post:
Pakistani military dominates the country getting the best of everything.
http://www.washingtonpost.com/wp-dyn...062601826.html



Private sector firms cannot compete with government firms simply because the government can subsidize its own firms and can also apply “pressure” to beat the competition whenever necessary.

I mean, look at the state of the economies of India and Pakistan. India exports to the US:

Pharmaceuticals ($6.1 billion), mineral fuels ($2.7 billion), machinery ($2.5 billion) and $28.1 billion of services (telecommunications, computer, and information services, research and development, and travel sectors). Note to [MENTION=102121]hafeezrocks[/MENTION]: Space programs are a part of technological advancement that enables India to export every year to the world 1,000X the $75 million it cost to send Mangalyaan to Mars.

Pakistan exports to the US:

Miscellaneous textile articles ($1.3 billion), knit apparel ($725 million), woven apparel ($572 million), leather products ($111 million), and cotton ($104 million).

U.S. foreign direct investment (FDI) in India (stock) was $44.5 billion in 2017, and U.S. foreign direct investment (FDI) in Pakistan (stock) was $0.5 billion in 2017.

https://ustr.gov/countries-regions/south-central-asia/india
https://ustr.gov/countries-regions/south-central-asia/pakistan

In one sentence, over the last 25 years India has developed modern industries and Pakistan has not.

Either this is due to the difference in the systems of the 2 countries, or Pakistanis are not as capable as Indians. Given that ethnically there doesn’t seem to be a whole lot of difference between Pakistani Punjabis and Indian Punjabis, the difference must be in the systems. I see many good Pakistani doctors and professors in the US. There are many posters in this forum who see the obvious like [MENTION=138016]natkhat-shahzada[/MENTION], [MENTION=138980]TalentSpotterPk[/MENTION], [MENTION=142317]Loralai[/MENTION] etc.

Pakistanis may keep fooling themselves and fantasizing that IK will change the country, but it won’t happen.

3) Much has been said about corruption that existed in previous governments. Anyone who believes that the current regime doesn’t have the same actors only needs to see the pic posted by [MENTION=131701]Mamoon[/MENTION] about the 2008 and 2018 governments.

The out of control judicial system is now being used to shake down entrepreneurs. Pakistan’s most successful entrepreneur Malik Riaz Hussain was recently shaken down for $3 billion by the Supreme Court.

https://fp.brecorder.com/2019/03/20190327458747/

Is Hussain corrupt? Yes, of course. It is impossible to build anything without paying off the system. But the $3 billion seems to be a money grab by the establishment. It leaves the entrepreneur with nothing to invest.

Dirubhai Ambani was corrupt, but he and his elder son created enough industries which created wealth of hundreds of billions of dollars. It would be nice to have entrepreneurs who are not corrupt, but corrupt entrepreneurs and politicians are better than stagnation and having an economy stuck producing textiles and soccer balls.

I am posting to this forum after almost two weeks, and mainly because my friend Cricketjoshila mentioned me. I am probably not going to respond to the usual suspects unless I see something intelligent. I am a bit tired of repeating myself. The bottom line is that Pakistan is the country of Pakistanis. You can lead a horse to the water but you can’t make him drink.
[MENTION=134809]sensible-indian-fan[/MENTION] [MENTION=149096]JBFire[/MENTION] [MENTION=136588]CricketCartoons[/MENTION] [MENTION=138254]Syed1[/MENTION] [MENTION=141520]troodon[/MENTION] [MENTION=142322]oneindia[/MENTION]

The way that Mr joshila mentioned you I thought you would have good command over economics but sadly your 1000 words essay was the same what 1.4 billion peoples used to parroting on anything related to Pakistan.

 

[sjahmed23]

It will get alot worse before it gets better. Pakistan is far far behind in a race that include China, India and Bangladesh and other emerging countries all vying for the same export markets for the same goods Pakistan sells. Those blaming PTI should be ashamed of themselves. The 'experienced' governments of PMLN and PPP have left Pakistan high and dry.

 

[Technics 1210]

The way that Mr joshila mentioned you I thought you would have good command over economics but sadly your 1000 words essay was the same what 1.4 billion peoples used to parroting on anything related to Pakistan.

They are not essays, they are verbatim pieces from the internet, or simply plagiarized cut and paste pieces. There is no intelligence involved what so ever. I can assure you that. When you have posters tagging their mates, they are looking for approval from their mates, not the masses - demonstrating how weak their argument is.

 

[Bewal Express]

Much worse to come

S. AKBAR ZAIDI

ALL those who had hoped that Pakistan’s economy may have finally hit rock-bottom and may just have turned a corner, and that the wreck created by the finance minister and his team might have stabilised, are in for a rude shock. We are still at the beginning of the huge damage relentlessly being done to Pakistan’s economy by an irresponsible and incompetent management and leadership which has destroyed the economy over the last eight months.

It certainly did not add to anyone’s confidence when the finance minister himself was recently reported to have said that “Pakistan may be going through an economic crisis”, or that we are “near bankruptcy”, a view shared by the adviser to the prime minister on commerce, textile, industry and production and investment who also said that the economy was in a “bad shape”. The governor of the State Bank, agreed, adding his sombre and dire statement about where we are today, warning about dismal prospects in the future, politely saying that growth will ‘moderate significantly”. However, be warned, things are about to get much worse.

Two things need to be pointed out. One, that while the current government did certainly inherit an economy which was desperately seeking reform, after eight months it can’t blame previous governments and has to take responsibility for its own mishandling. After two failed mini-budgets, some introspection is necessary. Second, a look at a few key indicators will only emphasise the point of how bad things have become.


With inflation at its highest in five-and-a-half years, we are only seeing the beginnings of a period of double-digit inflation. The rupee is losing value every other day, adding to this inflation, and will depreciate a great deal more, whether, or especially when, the government gives in to yet another IMF programme.

The rupee is losing value every other day, adding to inflation, and will depreciate a great deal more.

The fiscal deficit is about to hit more than six per cent of GDP, and even a cut in development expenditure will not stop this rot, as defence spending and interest payments continue to rise. Our exports, despite the 35pc devaluation, have barely budged, the circular debt continues to increase, interest rates are also going up making the cost of business even more uncompetitive. One can go on and show a vast array of statistics which unambiguously show that this government has ruined the economy. With the State Bank lowering GDP growth to an eight-year low of around 3.5pc, those begging for money (most of which has already been spent in one way or another) from the four friends we have left, need to think of better alternatives. And tax amnesty schemes are certainly no solution.

There is nothing which represents the complete disarray and disconnect in understanding and thinking about Pakistan’s social and economic issues by this government, and their attempted solution than the two announcements made recently. The first was made by the prime minister of Pakistan on March 28, followed by one made by his finance minister reported the next day.

Prime Minister Imran Khan announced “the biggest and the boldest” poverty alleviation programme of Pakistan called Ehsas, with a number of measures supposedly to address many of the country’s persistent economic problems. This, at a time, when poverty numbers have fallen and poverty has ceased to be Pakistan’s biggest problem, now replaced by huge and visible disparities in income and wealth.

The apparent determination and importance of these measures to the government, were emphasised by the prime minister’s announcement, that he would ask for a constitutional amendment to move Article 38(d) from the ‘Principles of Policy” section into the ‘Fundamental Rights’ section, making the “provision of food, clothing, housing, education and medical relief for citizens who cannot earn a livelihood due to infirmity, sickness or unemployment, a state responsibility”.

Undoubtedly, these are admirable intentions and a part of his Riasat-i-Madina project. But where the money for such grandiose schemes will come from, given the state of the economy, is a complete mystery. A far more robust taxation policy, taxing the very rich and transferring this money to those who deserve it, would address Pakistan’s growing inequality, and might allow social welfare spending as well, but the government fails at such structural measures of reform.

The very next day after the prime minister’s announcement, it was reported that the finance minister had stated that Pakistan was finally about to secure a bailout package from the IMF of between $6 billion and $12bn in late April or early May. These two statements represent a huge disconnect between what the prime minister envisages and how his finance minister thinks the economy ought to be managed.

There is a basic contradiction here between both these aims and positions, and both have diametrically opposite consequences. This should be fairly obvious to anyone, no matter how well intentioned, if they have even a miniscule understanding of how a country’s social and economic policy is managed, and what the consequences of an IMF programme will entail.

The anticipated IMF programme, which is almost a certainty now, is going to make things far worse for all Pakistanis, and especially for the working people already dealing with prospects of a marked economic slowdown and far higher prices. The IMF will further cut the miniscule development expenditure we have left, although defence spending will remain a matter of ‘national security’, hence, not to be touched.

The IMF brings about austerity, stabilisation and cuts the growth rate, it insists on devaluation, and will cause greater inflation by raising utility prices. The fundamental rights in the Constitution, regarding the “provision of food, clothing, housing, education and medical relief for citizens”, are inconsistent with any IMF programme. In fact, at the end of the anticipated IMF programme, we will add many more to the ranks of those who “cannot earn a livelihood due to infirmity, sickness or unemployment”. Perhaps it is best to remind ourselves, there was no IMF in the state of Madina.

Why don't you explain the disaster the guys that offer carrots have left. This is the result of years of Corruption and know IK has to sort out the mess. IA he will do it because Allah is the best of planners and your desperation for will never come to fruition.

 

[cricketjoshila]

The way that Mr joshila mentioned you I thought you would have good command over economics but sadly your 1000 words essay was the same what 1.4 billion peoples used to parroting on anything related to Pakistan.

Can you point out which of the sources that are posted is Indian?And what is wrong with them?

Pakistan's currency is 140 to a dollar.

Gdp growth rate less than 4%

A big current account deficit.

Imran Khan is looking for a IMF bailout.

Right now IK has taken doles from Saudi,UAE and China.

Inflation is close to 9%

These are being said on PP by Pakistanis not Indians.

 

[Dios]

1. Nah not singling out USA. I meant the western nations you refered to.

2. I am no economist but debt is not like home loan where you pay it off. As long as you have the ABILITY to pay the debt...debt increasing is not an issue. You are using it to fuel growth, provide more jobs, improve your economy.

3. Now whether USA has gone too far with this is something I don't know. But your premise of having little to no debt seems faulty to me.

4. Your view is certainly quite contrary to the views I see by most people. Slightly higher growth rate compared to Western nations means nothing. Earlier Pakistan used to be 3% right? What exactly did it achieve with this? China on the other hand, lifted a HUGE amount of its population out of poverty.

5. Now I know GDP is not everything. Many people are crowing about our GDP growth but there is a massive massive employment issue in our country (we are experiencing jobless growth). So yeah stats ain't everything but usually they do mean something.

If you are happy with 3% growth (without debts) by comparing it to USA...by all means go ahead. But that's a very unique perspective. Pakistan needs to grow a LOT faster to change the lifestyle of its people.

All your points are valid and correct. The poster you are replying to is simply confused and conflating different issues.

 

[Junaid_ahmed]

Can you point out which of the sources that are posted is Indian?And what is wrong with them?

Pakistan's currency is 140 to a dollar.

Gdp growth rate less than 4%

A big current account deficit.

Imran Khan is looking for a IMF bailout.

Right now IK has taken doles from Saudi,UAE and China.

Inflation is close to 9%

These are being said on PP by Pakistanis not Indians.

I suggest you should read his comment again. He started with pak army burden on economy & ended with India pak comparison on economy, the typical Indian way to talk on anything related to Pakistan.

 

[TalentSpotterPk]

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Exports from <a href="https://twitter.com/hashtag/Pakistan?src=hash&ref_src=twsrc%5Etfw">#Pakistan</a> show 11.13 percent decline in March 2019 over corresponding month of last fiscal year. In 9 months of FY19 a paltry 0.1 percent increase on the back of 36 percent devaluation of rupee. <a href="https://twitter.com/ImranKhanPTI?ref_src=twsrc%5Etfw">@ImranKhanPTI</a> <a href="https://t.co/6Kf2GOoa5g">pic.twitter.com/6Kf2GOoa5g</a></p>— Nadeem Malik (@nadeemmalik) <a href="https://twitter.com/nadeemmalik/status/1116233951033610240?ref_src=twsrc%5Etfw">April 11, 2019</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

 

[TalentSpotterPk]

Despite no growth in exports, trade deficit shrinks 13%

ISLAMABAD: Pakistan’s exports flattened at $17 billion in first nine months of this fiscal year despite 34% currency devaluation in the last over one year, underscoring the need to review a strategy to weaken the currency for gaining export competitiveness.

Where the growth in exports flattened in nine months, it, in fact, dipped over 11% on a year-on-year basis in March.

Despite almost no growth in exports, the trade deficit further contracted to $23.7 billion from July through March on back of steep reduction in imports, reported Pakistan Bureau of Statistics on Wednesday.

Trade deficit that stood at $27.2 billion in July-March period of last fiscal year shrank 13% to $23.7 billion in the corresponding period of the fiscal year 2018-19, the PBS report showed. In absolute terms, there was a reduction of $3.6 billion in the trade deficit and entire reduction came from the import side.

Overall imports during July-March period of this fiscal year dropped 8% to $40.8 billion, indicating that this year imports would not hit the record level achieved in the previous fiscal year. But the improvement was large because of a reduction in machinery imports.

Exports during the first nine months of the current fiscal year amounted to only $17 billion, higher by just 0.1% or $19 million. But the cost that the country paid to get $19 million benefit runs into billions of dollars in addition to the pain that the consumers are passing through due to increase in the cost of almost every utility due to currency depreciation.

This came despite the fact that the central bank, in consultation with the finance ministry, let the currency depreciate by 35% since January last year. The Pakistan Muslim League-Nawaz (PML-N) government had given an Rs180-billion package to the exporters. The Pakistan Tehreek-e-Insaf (PTI) government has also provided over Rs30-billion package in shape of lower gas and electricity prices.

Finance Minister Asad Umar has already announced to link the value of the rupee with the Real Effective Exchange Rate, which will require further adjustments in the months ahead.

There had been strong criticism against former finance minister Ishaq Dar for keeping the exchange rate fixed at Rs105 to a dollar till October 2017 that according to the economists damaged the exports potential. After that both, the former finance minister Miftah Ismail and incumbent Finance Minister Asad Umar advocated devaluing the currency for gaining export competitiveness.

But Umar was of the view that the damage caused by an overvalued rupee was not only limited to exports. It also led to de-industrialization due to the influx of cheaper imports, according to Umar.

The weak rupee helped contain the imports but it also adversely hit the tax collection of Federal Board of Revenue (FBR). The arguments of the International Monetary Fund (IMF) and the finance ministry that currency depreciation would also improve revenue collection by at least Rs100 billion at the import stage have proven wrong.

The quantum of exports in the first nine months was equal to only 63% of the $27 billion annual targets that the PTI government has set for itself.

Pakistan closed the last fiscal year at $37.6 billion of trade deficit, which became the key reason behind the highest-ever current account deficit of $18.9 billion in the year. The PTI government wants to cut the trade deficit close to $26 billion, which seems highly impossible now. The value of exported goods was 240% less than the value of imports, which continuously improved because of the reduction in the import bill.

Despite the contraction in exports, the IMF has predicted a current account deficit of 5.2% of GDP for this fiscal year.

The trade balance in March 2019, as compared to the same month a year ago, improved but only because of the contraction in imports. The trade deficit shrank 28% from $3 billion to $2.2 billion in March this year. In absolute terms, there was a reduction of $849 million in the trade deficit on an annual basis.

In March 2019, the imports in dollar terms declined to $4.2 billion compared to $5.3 billion in the same month last year, which reflected a contraction of over 21%, reported the PBS. But exports also decreased by 11.1% to $1.98 billion in March, a net reduction of $248 million.

On a month-on-month basis, the exports surged 4.8% in March over the preceding month. Exports increased by only $90 million to $1.98 billion. Imports marginally contracted by 0.6% to $4.2 billion last month. Resultantly, the trade deficit contracted 5% to $2.2 billion in March over February.


https://tribune.com.pk/story/1947793/2-despite-no-growth-exports-trade-deficit-shrinks-13/

 

[Pete Rose]

A growing GDP with a widening current account deficit means that the economy is geared towards domestic consumption built on imported products. It is a recipe for disaster.
Success for PTI or any government should be measured as a low GDP growth environment with a shrinking deficit driven by growth in export and decline in exports.
People who trumpet GDP growth or low inflation without looking at the forex position, or export growth do not understand macro or microeconomics

 

[Savak]

A growing GDP with a widening current account deficit means that the economy is geared towards domestic consumption built on imported products. It is a recipe for disaster.
Success for PTI or any government should be measured as a low GDP growth environment with a shrinking deficit driven by growth in export and decline in exports.
People who trumpet GDP growth or low inflation without looking at the forex position, or export growth do not understand macro or microeconomics

My biggest question is where did the $60 billion in IMF loans taken by the PPP and PML-N in the last 10 years go? What do they have to show for it?

 

[Pete Rose]

My biggest question is where did the $60 billion in IMF loans taken by the PPP and PML-N in the last 10 years go? What do they have to show for it?

Well I can’t account for all, but about a quarter went in to inflating the forex rate so that they could mask inflation. And a significant part of it went to pay for things we can’t afford: paying off older debt, oil bills, defense etc.

Think of it like this: let’s say your annual income is 30 and your expenses are 60. So you have two choices:
1 - borrow money to pay for your incremental 30 expense every year
2 - borrow money to pay for incremental 15 expense by bringing down your expenses to 45 in year 2 and keep bring long down your expense and increase your income every year so that you can pay off your loans and no longer need debt
PPP and PML took option 1 because they were afraid that they would be booted from office

 

[Pete Rose]

From 3.2 % Inflation in March 2018 now within 1 year it’s 9.4 %

Sir, the data is available for the last ten years from the SBP website. You won’t be surprised when you look at year 1 of PML and PPP

 

[cricketjoshila]

I suggest you should read his comment again. He started with pak army burden on economy & ended with India pak comparison on economy, the typical Indian way to talk on anything related to Pakistan.

Can you please tell what is the percentGe of gdp of pakistan that the army is taking?

 

[Junaid_ahmed]

Can you please tell what is the percentGe of gdp of pakistan that the army is taking?

It's economy which need to grow rather cut sizing the defense budget. 8b/year is not a very big amount. The strategy of save a penny is earn a penny can be suitable for a household but not for a country. A country is always need to utilize it's maximum resources for the continuous growth in economy. We have an undocumented economy in our country. Tax reforms are necessary. Peoples earn millions without paying a rupee in the name of tax. Unstable political circumstances, corrupt bureaucracy and political interferences are the hurdles in foreign investment.

Now come to your point of defense budget, bhai if my neighbor is jungli bloodthirsty & provoking then I have to purchase a gun to save my family whether I can afford it or not.

 

[Abdullah719]

<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">CDA's biggest plots' auction results in highest ever return for CDA - Rs 11.28 bn. This highlights 2 imp facts: One, it is a vote of confidence in future of Pakistan's economy; two, it reveals how much money has been lost in the past because of non-tranparent, corrupt practices.</p>— Imran Khan (@ImranKhanPTI) <a href="https://twitter.com/ImranKhanPTI/status/1116557064791216129?ref_src=twsrc%5Etfw">April 12, 2019</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

 

[Bewal Express]

Sir, the data is available for the last ten years from the SBP website. You won’t be surprised when you look at year 1 of PML and PPP

Calling this illiterate sir is giving too much respect. He just posts Noora propoganda and the runs. He is angry because his carrot wasn't agreed to by the people of PK.

 

[Bewal Express]

<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">CDA's biggest plots' auction results in highest ever return for CDA - Rs 11.28 bn. This highlights 2 imp facts: One, it is a vote of confidence in future of Pakistan's economy; two, it reveals how much money has been lost in the past because of non-tranparent, corrupt practices.</p>— Imran Khan (@ImranKhanPTI) <a href="https://twitter.com/ImranKhanPTI/status/1116557064791216129?ref_src=twsrc%5Etfw">April 12, 2019</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

That is quite an incredible figure. This is what an honest guy does for a country.

 

[Savak]

Comparison Of First 8 Months Of Economics – PPP Vs PMLN Vs PTI

On Apr 13, 2019

The newly elected PTI Govt faced huge criticism on the economic end. Majority of the mainstream media has been bashing PTI for its economic policies. Opposition parties aligned with the media in bashing the ruling party.

Let’s have a comparative look at the tenure of PPP, PMLN, and PTI [first 8 months ]

The infographic clearly shows the positive indicators of the economy under the PTI Govt.

The decrease:

The imports have been decreased by 6%.

The trade deficit is down by 11 %.

The fiscal deficit has been decreased by 22 %.

And external debts were dropped by 37%.

The increase:

A whopping 17% increase in the foreign direct investment [excluding CPEC ].

Remittances increased by 11.8%

Exports increase by 2%

Foreign exchange reserves: 10.4 Billion USD

Tax returns increase by 1.4 million.

As you can clearly see in the graph, there has been a gigantic 11.8% growth in the remittances in the first 8 months of PTI Government. It shows the trust of overseas Pakistanis in the incumbent Govt.

Talking about loans:

Pakistan has to return 37 Billion dollars in the next 5 years. 9 Billion dollars need to be paid back within 2019. On top of that, 1700 Million dollars to be paid back just in terms of interest.

Guess what? Not a single penny of these loans was taken by the PTI Govt.

Foreign Exchange Reserves:

Talking about the first 8 months of government, PTI had an increase of 270 Million dollars whereas PMLN had a decrease of 3.21 Billion dollars.

The comparison of exchange rate:

Comparing the three governments, it can be clearly seen that the highest increase in the exchange rate was under the era of PPP.

The minister of finance in PMLN’s tenure, Miftah Ismail had openly accepted that Ishaq Dar was artificially controlling the exchange rate of US dollar.

Billion of dollars were taken as a loan and used just to artificially stable the Rupee against the US dollar.

The pace of external debt:

State bank of Pakistan shows the comparison of PMLN and PTI Govt’s pace of taking the external debts. It can be clearly seen how PTI Govt has lowered down the pace of taking the external loans.

Conclusion:

The economic indicators so far are better than PMLN and PPP. The rupee was artificially strengthened against the US dollar and now it is being accepted by Miftah Ismail.

https://trendspak.com/comparison-economics-ppp-pmln-pti/

 

[Technics 1210]

Based on what I have read, Pakistan is the best kept secret when it comes to the economy.

People will look back in 10 years time and kick themselves for not investing in Pakistan.

 

[DRsohail]

Comparison Of First 8 Months Of Economics – PPP Vs PMLN Vs PTI

On Apr 13, 2019

The newly elected PTI Govt faced huge criticism on the economic end. Majority of the mainstream media has been bashing PTI for its economic policies. Opposition parties aligned with the media in bashing the ruling party.

Let’s have a comparative look at the tenure of PPP, PMLN, and PTI [first 8 months ]

The infographic clearly shows the positive indicators of the economy under the PTI Govt.

The decrease:

The imports have been decreased by 6%.

The trade deficit is down by 11 %.

The fiscal deficit has been decreased by 22 %.

And external debts were dropped by 37%.

The increase:

A whopping 17% increase in the foreign direct investment [excluding CPEC ].

Remittances increased by 11.8%

Exports increase by 2%

Foreign exchange reserves: 10.4 Billion USD

Tax returns increase by 1.4 million.

As you can clearly see in the graph, there has been a gigantic 11.8% growth in the remittances in the first 8 months of PTI Government. It shows the trust of overseas Pakistanis in the incumbent Govt.

Talking about loans:

Pakistan has to return 37 Billion dollars in the next 5 years. 9 Billion dollars need to be paid back within 2019. On top of that, 1700 Million dollars to be paid back just in terms of interest.

Guess what? Not a single penny of these loans was taken by the PTI Govt.

Foreign Exchange Reserves:

Talking about the first 8 months of government, PTI had an increase of 270 Million dollars whereas PMLN had a decrease of 3.21 Billion dollars.

The comparison of exchange rate:

Comparing the three governments, it can be clearly seen that the highest increase in the exchange rate was under the era of PPP.

The minister of finance in PMLN’s tenure, Miftah Ismail had openly accepted that Ishaq Dar was artificially controlling the exchange rate of US dollar.

Billion of dollars were taken as a loan and used just to artificially stable the Rupee against the US dollar.

The pace of external debt:

State bank of Pakistan shows the comparison of PMLN and PTI Govt’s pace of taking the external debts. It can be clearly seen how PTI Govt has lowered down the pace of taking the external loans.

Conclusion:

The economic indicators so far are better than PMLN and PPP. The rupee was artificially strengthened against the US dollar and now it is being accepted by Miftah Ismail.

https://trendspak.com/comparison-economics-ppp-pmln-pti/

Good work keep on working PTI.

 

[Zeeraq]

Govt pays $1bn against Eurobonds

KARACHI: Pakistan has paid $1 billion of the total $2bn raised in 2014 through the issue of five-year and 10-year Eurobonds, the State Bank of Pakistan (SBP) announced on Monday.

The issue, held in April 2014, was censured by independent economists who criticised the high rates offered to sell these bonds. The returns offered on the five-year bonds were at 7.25 per cent and 10-year bonds at 8.25pc which were considered too high at the time reflective of the risks attached with Pakistan’s economy.

Some individuals in the financial circle have also claimed that the government would have to pay additional $1bn by December this year against the maturing five-year Sukuk (Islamic bonds) launched in November 2014.

When asked about the maturing Sukuk in December, SBP spokesman said he was not aware of another payment of $1bn by December. But he confirmed that outflow of $1bn against the Eurobond will be reflected in the next weekly report of foreign exchange reserves of the country.

The country’s foreign exchange reserves as of April 5 were at $17.228bn including $10.272bn of State Bank and $6.956bn of commercial banks.

The government, in order to avoid a balance of payments crisis, has borrowed funds from bilateral sources in the last eight months including 15bn Yuan ($2.2bn) from China last month to strengthen foreign exchange reserves.

Pakistan has been facing a balance of payment crisis for the last few years but bilateral borrowings from the UAE, Saudi Arabia, and China helped prop up the country’s reserves to record $18.9bn in the ongoing fiscal year.

In addition to bilateral borrowings, the government is also negotiating a bailout package with the International Monetary Fund (IMF). Finance Minister Asad Umar also visited Washington to attend the World Bank Group spring meetings.

Following his visit, the IMF in a statement issued on Monday said that “at the request of the authorities, an IMF mission will be going to Pakistan before the end of April to continue the discussions.”

Despite claims of structural adjustments, the government has failed to improve exports to the desired level and has been unable to reduce import bill resulting in a huge trade deficit.

https://www.dawn.com/news/1476417/govt-pays-1bn-against-eurobonds

 

[Bewal Express]

KARACHI: Pakistan has paid $1 billion of the total $2bn raised in 2014 through the issue of five-year and 10-year Eurobonds, the State Bank of Pakistan (SBP) announced on Monday.

The issue, held in April 2014, was censured by independent economists who criticised the high rates offered to sell these bonds. The returns offered on the five-year bonds were at 7.25 per cent and 10-year bonds at 8.25pc which were considered too high at the time reflective of the risks attached with Pakistan’s economy.

Some individuals in the financial circle have also claimed that the government would have to pay additional $1bn by December this year against the maturing five-year Sukuk (Islamic bonds) launched in November 2014.

When asked about the maturing Sukuk in December, SBP spokesman said he was not aware of another payment of $1bn by December. But he confirmed that outflow of $1bn against the Eurobond will be reflected in the next weekly report of foreign exchange reserves of the country.

The country’s foreign exchange reserves as of April 5 were at $17.228bn including $10.272bn of State Bank and $6.956bn of commercial banks.

The government, in order to avoid a balance of payments crisis, has borrowed funds from bilateral sources in the last eight months including 15bn Yuan ($2.2bn) from China last month to strengthen foreign exchange reserves.

Pakistan has been facing a balance of payment crisis for the last few years but bilateral borrowings from the UAE, Saudi Arabia, and China helped prop up the country’s reserves to record $18.9bn in the ongoing fiscal year.

In addition to bilateral borrowings, the government is also negotiating a bailout package with the International Monetary Fund (IMF). Finance Minister Asad Umar also visited Washington to attend the World Bank Group spring meetings.

Following his visit, the IMF in a statement issued on Monday said that “at the request of the authorities, an IMF mission will be going to Pakistan before the end of April to continue the discussions.”

Despite claims of structural adjustments, the government has failed to improve exports to the desired level and has been unable to reduce import bill resulting in a huge trade deficit.

https://www.dawn.com/news/1476417/govt-pays-1bn-against-eurobonds

Where is the liar in chief today. Where did the $60 bn borrowed in the last 10 years go? [MENTION=138980]TalentSpotterPk[/MENTION]

 

[Bewal Express]

Good work keep on working PTI.

Can [MENTION=138980]TalentSpotterPk[/MENTION] tell us where these borrowed billions went? Maybe we can give you some carrots so that you will do some research

 

[Mamoon]

Can [MENTION=138980]TalentSpotterPk[/MENTION] tell us where these borrowed billions went? Maybe we can give you some carrots so that you will do some research

I think you should worry about Imran's lack of spine and his decision to sack the economic genius Asad Umar.

 

[Bewal Express]

I think you should worry about Imran's lack of spine and his decision to sack the economic genius Asad Umar.

Interesting you wanted him sacked and when he is a sacked...... The reality is that Asad has inherited an disaster from h***mis that have stolen billions and it will make no difference. It years for the fundamentals to come good and whoever replaces him will have the same problems

 

[Mamoon]

Interesting you wanted him sacked and when he is a sacked...... The reality is that Asad has inherited an disaster from h***mis that have stolen billions and it will make no difference. It years for the fundamentals to come good and whoever replaces him will have the same problems

The reality is the following:

(1) You have been proved wrong

(2) Asad Umar was incompetent and your leader did not agree with you that he is doing a good job

OR

(3) this is Atif Mian all over again and your leader has buckled under the pressure of criticism

(3) In only 8 months, 5 members of “Kaptaan’s” team have resigned, which shows that his decision-making has been awful and chaotic

(4) the dream of Naya Pakistan cannot be achieved with such confused thinking process.

 

[Mueez]

I kind of feel sometimes Pakistanis want Pakistan to succeed, but they don’t want to give a chance to Pakistan to succeed.

If you don’t back your goverment, how do you expect Pakistan to prosper?

As a nation, we need to stand united instead of whose leader is better or less corrupt.

Afterall we belong to Pakistan.

 

[sensible-indian-fan]

All your points are valid and correct. The poster you are replying to is simply confused and conflating different issues.

Thank you.

It was a bit baffling.

 

[Abdullah719]

<blockquote class="twitter-tweet" data-lang="en"><p lang="ur" dir="rtl">قوم پر مشکل وقت نااہل حکمرانوں کی وجہ سے آیا، مریم اورنگزیب<a href="https://t.co/HL3G7gpucz">https://t.co/HL3G7gpucz</a> <a href="https://t.co/Zco3YP6ZP0">pic.twitter.com/Zco3YP6ZP0</a></p>— SAMAA TV (@SAMAATV) <a href="https://twitter.com/SAMAATV/status/1126904735259398144?ref_src=twsrc%5Etfw">May 10, 2019</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

No kidding

 

[Savak]

I think its about time Imran Khan address the nation on television with regards to the economic direction of his team and his govt. The opposition has been eating him alive ruthlessly in the last few months

 

[Prince of Pakistan]

I think its about time Imran Khan address the nation on television with regards to the economic direction of his team and his govt. The opposition has been eating him alive ruthlessly in the last few months

The opposition has certainly benefited from the tough decisions the govt had to take even though they know very well they would have done the same.

IK needs to take people into confidence and explain what they are trying to achieve. Otherwise I am afraid some parties will get people on the road and their corruption will go into hiding as well.

 

[Tapori]

GDP is not everything
IMF terms are always terrible ultimately
Systematic corruption literally breeds a system in which it's survival is tied to themselves being in power and any deviation with inevitable short-term consequences due to endemic long-term issues is used to validate said corrupt power leaders

Inflation is key and it will be fascinating to see where the UK and International countries comply with with return of literally stolen wealth which would ameliorate much of the issues Pakistan's economy faces.

Thoughts as always with those poor and struggling who are genuinely suffering; moreso. As if any of the previous leaders ever genuinely cared about them.

 

[Markhor]

GDP is not everything
IMF terms are always terrible ultimately
Systematic corruption literally breeds a system in which it's survival is tied to themselves being in power and any deviation with inevitable short-term consequences due to endemic long-term issues is used to validate said corrupt power leaders

Inflation is key and it will be fascinating to see where the UK and International countries comply with with return of literally stolen wealth which would ameliorate much of the issues Pakistan's economy faces.

Thoughts as always with those poor and struggling who are genuinely suffering; moreso. As if any of the previous leaders ever genuinely cared about them.

Good to see you back Tapori.

I've said before that Pakistan must accept bitter medicine in the short-term. It was bad enough that PMLQ government subsidised oil when prices were high - leading to PPP inheriting galloping inflation especially after the global financial crash. Then PMLN government came and kept the rupee artificially inflated to subsidise ALL imports which destroyed Pakistan's foreign exchange reserves.

So while people are complaining about rising prices - they must remember that the economy was in an artificial position under the last government. This devaluation was absolutely necessary and any economically competent government would've done the same. Unfortunately Pakistanis demand short-term fixes and don't look beneath the surface to see why the economy is taking a short-term hit.

 

[WebGuru]

In last month or so media was talking about stock exchange 24/7 when it was going down but in last 48 hours when it gained 2100+ points it's hardly a breaking news for them.

Pakistan Stock Exchange PSX 100 Index surged by 944 Points today while 100 index surged by 2100 points in 2 days & crossed 35,581 Points

 

[ILcricket]

IK is not up to it . Chinese sahukar's will ruin you ultimately .

 

[Shaheerthe2nd]

Can anyone give me a a brief summary of how he's doing? Not well versed in the economic sector.

 

[Abdullah719]

Bulls return to Pakistan Stock Exchange as benchmark index climbs 2.8pc

The Pakistan Stock Exchange (PSX) adopted a positive trajectory on Wednesday as the benchmark KSE-100 Index climbed whopping 1,010 points to close at 35,959 — up 2.8 per cent.

The market opened on a positive note and maintained the mood throughout the session. The market opening at 34,949 remained a day low, while the benchmark index hit a day high at 35,993 near the end of the session.

The volume of shares traded in the benchmark index increased from 122.8 million shares to 151.5m shares. Similarly, the value of shares traded increased to Rs7.2 billion as compared to Rs6.9bn yesterday.

The Bank of Punjab (BoP), Fauji Cement Company Ltd (FCCL) and Unity Foods Limited (UFL) remained the top active scrips with 17.4m shares, 11.8m shares, and 9.9m shares traded respectively.

"Investors celebrated the news reports of the confirmation of government support fund which is aimed at stabilising the stock market," said Next Capital Limited's head of foreign institutional sales, Mohammad Faizan.

The government support fund will be managed by National Investment Trust (NIT) and will be injecting funds in state-owned listed companies.

He added that the market participation for the benchmark index increased by 24pc on a day-on-day basis.

"Major contribution to total market volume came from BOP, FCCL, and UNITY churning 39m shares out of the total market share of 182mn shares."

"Daily traded value for the 100 Index increased to $48m from $46m in the previous session," he said.

https://www.dawn.com/news/1485305/b...stock-exchange-as-benchmark-index-climbs-28pc