Who is to blame for the economic crisis in Pakistan?

Saj

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The German Foreign Minister, Frank-Walter Steinmeier, has said that Pakistan has just "a few days" to raise billions of dollars in foreign loans.

After meeting senior members of the government, he said that Pakistan had no choice but to seek a loan from the International Monetary Fund (IMF).

Mr Steinmeier said that the loan was needed to avoid a deepening crisis.

Economists say that the country needs needs up to $15bn over the next 24 months to stabilise the economy.

They say that can best be achieved by sustained foreign assistance and investment in the agricultural, industrial and energy sectors.

Little assistance

"I hope the decision (with the IMF) will be taken soon. It won't help to have it in six months, or six weeks. Rather, we need it in the coming six days," Mr Steinmeier said at a joint news conference conference with his Pakistani counterpart, Shah Mehmood Qureshi.

"We will support your country in the negotiations with the IMF," he said.


Some economists fear that Pakistan faces economic meltdown

The German foreign minister said that his country would also be willing to step up development assistance to Pakistan but he declined to give a figure.

Correspondents say that Pakistan's seven-month-old government has been reluctant to go to the IMF and has been looking for help from friendly governments - but so far little assistance has materialised.

The BBC's M Ilyas Khan says that the country has plenty of long-term commitments from a group of countries called the Friends of Pakistan, but any default on international obligations in the short term may hurt its ability to attract future investment.

Our correspondent says that the decision by two of its closest allies, China and Saudi Arabia, to decline providing cash for an immediate bailout means that only one short-term window remains open, that of the IMF, with its strategy of achieving stabilisation by cutting growth.

With donors pre-occupied with their own financial problems because of the worldwide financial crisis, experts say that many countries would apparently prefer to wait for IMF involvement before they lend Pakistan money, because that would make the country more financially disciplined.

Pakistan has said that is has not yet formally asked the IMF for a loan, but an IMF spokesman said on Friday talks going on in Dubai between the fund and Pakistani officials would enable the IMF to respond swiftly should a request be made.

http://news.bbc.co.uk/2/hi/south_asia/7694969.stm
 
Well i dont think anyone can be blamed for the rise in international oil prices. That messed up the economy really badly especially inflation e.t.c.. The government of the day i.e. the Musharraf government can definitely be blamed for not the shortfall in electricity of 4000 MW throughout the country and the disastrous impact that this has had on the industrial sector.
 
Musharaf gov't comon now...most of these power plants aren't producing electricity becuase they can't pay money to oil companies....oil price is now at 62 dollars...this ppp led gov't is responsible for this mess. we had 17 billion dollars in december and now we are almost bankcrupt
 
Whatever the case...the current government does not look very promising when it comes to solving core issues such as these.
 
Easy to blame but also alot was out of their control. Oil prices are crippling every economy. The meltdown of the US financial system has too also crippled everyone. And last but not least, the lost of foreign investment. we are going to continue losing FDI because after Marriott, alot of firms are now scared of investing in such a volatile market.

The markets are volatile as it is, and investing in a volatile country like Pakistan is too big a risk for anyone to take. Pakistans FDI was thriving in 2005 because the economy was hitting its peak and even though Pakistan was a risk, it could provide a good return....but at this point at time, the risk you are taking is not worth the return.
 
Over the last decade or so Pakistan got a lot of money, we have wasted a lot of it, and not invested in any industry or agriculture....
 
No accountability at any stage of our existence by Military or otherwise and we want to blame people ?
 
Why have we never been able to build up Forex Reserves in the $250 billion region like India has? Why don't we have a trillion dollar economy like India has? Why dont we have a vast diversified portfolio of industries and sectors rather than putting all our eggs in one basket? Why have we not initiated land reforms like the Indians or ever invested heavily in health, education e.t.c? Why have we looted and plundered our country even during times of great economic crisis? Why have we always juggled b/w Millitary and civilian rule? Why do we elect the same crooks and thieves not once, not twice but thrice into power?

I wish i knew the answers to these questions.
 
All good questions

Savak said:
Why have we never been able to build up Forex Reserves in the $250 billion region like India has? Why don't we have a trillion dollar economy like India has?
I guess this can be attributed to population somewhat. India's GDP of 3 trillion has a 30% consumer component

Why dont we have a vast diversified portfolio of industries and sectors rather than putting all our eggs in one basket? Why have we not initiated land reforms like the Indians or ever invested heavily in health, education e.t.c? Why have we looted and plundered our country even during times of great economic crisis? Why have we always juggled b/w Millitary and civilian rule? Why do we elect the same crooks and thieves not once, not twice but thrice into power?

I wish i knew the answers to these questions.
When it comes to comparison with India, I can tell you that the last few Indian finance ministers could probably walk in any country for that position.
- P chidambaram
- Yashwant Sinha
- current prime minister Manmohan Singh is himself a renowned economist

India opened up its markets to outsiders in 1992. that was attributed to manmohan singh, the then finance minister

Rajeev Gandhi in his rule set up television/radio communication to each and every part of India

People in India are generally and comparatively more oriented towards ploughing through the hard times rather than rebelling. there are some handful extremists but only those.
 
both Govt. can be blamed
1 : previous Govt. had money but didn't used it properly. Economy was good but on paper without any strong base.
2 : Today's Govt. don't know anything what to do with these crises. Rupee going down also have created alot of problems for which Govt. didn't do anything.
 
so the day many of us on pakpassion have been prediciting has arrived...where is suhaib bradmen now? hiding in the shadow of the centaurus office??
 
General Secretary Exchange Companies Association Zafar Paracha told Dawn.com that the USD was being sold and purchase at Rs116 and Rs115 respectively.

He claimed that foreign loans, the government's unannounced commitments to international bodies and corruption are responsible for the lower value of the rupee.

That would always raise a red flag, lack of transparency is is always going to be open to abuse.
 
Has to be the corrupt government.

The Swiss bank account should be raided. They'll probably find enough cash to loan IMF instead!
 
According to the ex Minister of Finance- Ishaq Dar, its the govt. Yes you read right. How long before NS also blames this govt. Can someone remind us, who is in govt?
 
It's just a matter of time before Pakistan undergoes major economic transformation. CPEC will go a long way in achieving this dream. Pakistan is destined to become one of the world's greatest countries. OF course it will need immense cooperation from the people as well.
 
It's just a matter of time before Pakistan undergoes major economic transformation. CPEC will go a long way in achieving this dream. Pakistan is destined to become one of the world's greatest countries. OF course it will need immense cooperation from the people as well.

CPEC may help but the economic incompetence of the Nooras and the PPP will take decades to over come. At the end of the Mush era it was standing at a very high figure of $40bn, to day it stands at an astounding $90bn. So in the decade since Mush it has doubled and a more. Nooras and the PPP have stolen money as if there is no tomorrow.
 
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