Pakistan Economy : Updates and Discussions

suryakiran

Team StratFront
Dec 1, 2017
791
970
Bangalore
Yaar to be honest yes...Many Indian products did come cheaper. But that cheap import damaged local industries massively.
With this new situation when Indian imports have stopped, the local industries will have time to flourish.
Win win situation.

@Neo
This is rubbish propaganda. Let me give you simple example. Cotton is 20% of the total Indian imports to Pakistan.

1. Value of total cotton imports to Pakistan - 975 MN USD
2. Value of total imports to Pakistan from India - 1.7 BN USD
3. Value of 20% of imports to Pakistan from India (cotton) - 340 MN USD

This means from a value perspective 33% of your raw material imported cotton for your textiles business is coming from India.

What we import is raw material. Now this goes into your exports. 34% of your overall exports is textile, clothing and cotton industry.

Now work the numbers and understand what happens when you impose duties on Indian products, specifically cotton. The only chaps, who are happy will be the Bangladeshis. Best of luck being price competitive vis a vis them.
 
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suryakiran

Team StratFront
Dec 1, 2017
791
970
Bangalore
What about the ''black market'',illegal trade between Pakistan and India which is much higher?
What goods are being traded and in who's favor,balance wise?

India is a major exporter in this scenario. Things get routed through Dubai. What could have been 10 USD is bought by them at 30 USD, because they do not want direct overland access. So entrepreneurial Indians make money routing it through Dubai. And equally 'unpatriotic' Pakistanis procure it from Dubai and sell it in Pakistan making a killing.

Medicines is top of mind. Read about articles about pharma products being sent via Afghanistan to the border areas of Pakistan. We have a booming and well developed pharma industry which can help them. But well, hey, 'Kashmir Kashmir Kashmir'. Grass grass grass.
 
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vstol Jockey

Professional
Dec 1, 2017
5,947
11,592
New Delhi
I saw the posts which show that India will be a loser by blocking imports from Pakistan as we have a balance of trade in our favour. However what people forget is that Congress govt in 2008-9 had given up certain Markets to allow Pak exports. Now India will compete within those markets and Pakistani exports will go down by billions. tell me who is the winner? Give up a penny to earn a pound. That is what business is all about.
 

_Anonymous_

Senior Member
Dec 4, 2017
14,553
10,523
Mumbai
We have a booming and well developed pharma industry which can help them. But well, hey, 'Kashmir Kashmir Kashmir'. Grass grass grass.


But that hasn't prevented them from flocking across the border to get their sick to be treated. Nor will it ever prevent them in the future, were the Indian govt to be liberal in issuing visas to address this demography.

Ungli dekar haath pakadwaane ka arth ab samajh mein aaya.
 

BlackOpsIndia

Team StratFront
Dec 1, 2017
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Cost of expected dam: 1100 billion pkr.

Money spent to raise awareness and collect donations for dam: 13 billion pkr.

Money expected from expats: 200 billion USD.

Money collected from expats: 9 million usd
Money collected overall: 9 billion pkr after forceful deductions from salary of people.

Total loss after all donations and hoopla: 4 billion pkr.

Just some pakistani things, I warned few people donating that nothing will happen, corruption and incompetence is embedded in Pakistani blood.

PML-N wants Rs13bn spent on dam fund ads drive recovered from ex-CJP - Newspaper - DAWN.COM
 

Proud_Indian

Abhay
Dec 2, 2017
165
212
Of promises and delusions
Sohaib R. Malik
Updated March 01, 2019


The writer is an analyst specialising in energy policy and political economy.
AMID much fanfare, Prime Minister Imran Khan and Saudi Arabia’s Crown Prince Mohammed bin Salman witnessed the signing of several MOUs a few days ago during the latter’s visit to Pakistan.

Our jubilant government appears to want everyone to share its firm belief that these agreements definitively guarantee the inflow of multibillion-dollar investment into the country over the next few years. The yearning for foreign capital in Pakistan, like in most states, is understandable, but MOUs between the two countries will invariably have varying degrees of success, and their ability to stimulate economic prosperity is likely overestimated.

The agreements — worth $21 billion in total — are mostly concentrated in the energy sector. The partnering entities intend to mobilise investment in three phases: short term (one to two years), medium term (two to three years), and long term (three to five years). The recently established Supreme Coordination Council, co-chaired by Imran Khan and Mohammed bin Salman, will monitor and facilitate the implementation process. The leaders’ direct involvement in overseeing these agreements underlines their commitment and is a promising development.

The short-term plan includes a $6bn investment in gas power plants and renewable energy projects. In October last year, the government approved the privatisation of the 1,233 megawatt Balloki and the 1,230MW Haveli Bahadur power plants, which are apparently marked for sale to the Saudis now and expected to fetch $4bn. A few serious concerns stem from this potential transaction.

Apart from the project-specific glitches, the Pak-Saudi MOUs face other challenges too.​
First, Balloki and Haveli Bahadur are among our most efficient power plants in our otherwise highly inefficient state-owned power generation portfolio. What is the rationale behind vending these lucrative plants while retaining ownership of loss-making plants? Second, it’s a well-known fact that the regasified liquefied natural gas-based plants can attract investors from across the world. So why does it appear as though the government isn’t all too keen to create competition among interested parties to seek better terms? Is this an act of desperation on its part, fast-tracking the sale of these plants to make up for the 2019 budget deficit?

Another $2bn investment is pledged in renewable energy through ACWA Power, a Saudi-based power producer. ACWA Power is a capable developer that has been expanding its footprint in emerging markets. Ironically, on Feb 27, the Cabinet Committee on Energy decided to procure further renewables exclusively through competitive procurement unless a developer has achieved certain milestones. So, at present, we don’t have a support mechanism for developers who decide to kick start renewables projects today.

The government needs to conduct its business with ACWA Power in a transparent manner without circumventing the interests of our domestic developers who have just received favourable policy news.

Some reports suggest that ACWA Power will develop these projects in Balochistan. Although the province hosts excellent solar and wind energy resources, there is a dire need to mobilise investment in this least-developed arm of the federation, and the absence of grid infrastructure for power evacuation and the long distance from our major load centres may impact the projects’ viability.

Meanwhile, the medium-term goal of investing $2bn in petrochemical, food and agriculture projects is rather humble. The petrochemical project is closely linked to the future establishment of an oil refinery by Saudi Aramco near the port of Gwadar. The $10bn refining complex is situated in the long-term plan and is expected to help us expand our local refining capacity and curtail our import bill caused by petroleum products. This particular project has better chances of materialising due to its importance for the sponsor: Saudi Aramco, a state-owned global energy giant.

Following its strategy to diversify away from the Saudi kingdom, Aramco has been signing agreements to establish oil-refining and petrochemical complexes across the region, including in China and India. To maximise the value of its crude produce, the company is gearing up to invest in integrated processes for refining and petrochemicals, which hold substantial growth potential for oil and gas companies. Interestingly, the UAE’s Mubadala is expected to finalise its investment decision of $6bn in a similar complex in Pakistan by end-2019, implying that we may have the prospect of being able to create competition in this sector too.

Apart from the project-specific glitches, the Pak-Saudi MOUs face other challenges too. Most importantly, the young crown prince’s has a tendency of announcing mega projects that rarely see the light of day. The much-hyped privatisation of Saudi Aramco and a $200bn investment plan in solar energy together with Japan’s SoftBank proved to make little progress beyond newspaper headlines. It’s not unusual for the Gulf leaders to package their political and business interests together. Therefore, these agreements often entail political risks that are higher than a purely commercial transaction.

Against this backdrop, I would leave it for the government to account for these challenges. All the same, it is important that our policymakers’ attention be drawn to the fact that we are a nation of over 200 million people, holding an enormous untapped economic potential. We must realise that and strive to position ourselves as an attractive destination for investors by creating a stable, transparent and competitive environment in all sectors of the economy to create optimum economic value.

As the government is entrusted with acting in the nation’s best interest, it needs to prioritise and exploit the opportunities that ensure the most economic value for us.

The writer is an analyst specialising in energy policy and political economy.

Of promises and delusions - Newspaper - DAWN.COM
 
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Proud_Indian

Abhay
Dec 2, 2017
165
212
No lessons learnt

Anjum Altaf
March 03, 2019


The writer was dean of the School of Humanities and Social Sciences at Lums.
PAKISTAN should be a welfare state. With millions of people straddling the poverty line, there is no other way forward. Those who believe the market will offer a solution are driven by ideology, blind fundamentalists in the same category as religious fundamentalists.

Only the state can cater for such destitution and the fact that a state has no interest or ability to do so does not mean that the task should be turned over to the market. The plain truth is that the market cares nothing for those without the ability to pay and there are many more in that category than should be acceptable.

Not just that, without a strong state the market doesn’t trickle wealth down, it siphons it up. The only viable alternative is to force the state to deliver on its responsibility and in the long run the only peaceful weapon citizens have to achieve that is the power of their votes. Let not this power be exhausted by either
subverting it or ignoring its claims. The demand for bread can be fobbed off only so long with the promise of cakes.

We should pay heed to the fact that instead of moving towards a ‘welfare’ state we are consciously turning into even more of a ‘warfare’ state than we already happen to be. It is in this context that one should consider the decision of the cabinet, delivered without any sense of irony by the minister for information at the time of the recent mini-budget: “The country’s defence budget is already low as compared to other states in the region, and therefore it should be increased” — though there was no such known demand for this by the establishment.
‘Welfare’ not ‘warfare’ should be the goal.

Hello, Mr Minister. The country’s budget for everything else — health, education, public transport, environmental sanitation, you name it — is also already low as compared to other states in the region. So why just the privileging of defence? On the contrary, the budget for everything else is being reduced even further to make up for the increase.

The deficit is intended to be made up “through the generation of more revenue” but given that no elite has ever taxed itself voluntarily except under extreme duress, this burden of taxation is also likely to fall on the middle and lower classes through dubious withholding taxes on mobile phones and the like.

In actual fact, the deficit is being made up by scrounging around for a billion here and a billion there on terms that cannot be disclosed to citizens and by printing money like there is no tomorrow.

All that the printed money is causing is inflation that is eroding the purchasing power of the helpless even further. I am sure the poor are ready to sacrifice for the nation but what does the interest of the nation entail? Is it always more guns at the cost of butter? And will the sacrifice ever be equitably shared or will one category continue to be evicted from tiny plots where they have lived for decades while others are allotted plots on which pets live better than the humans who feed them?

Where is the sense of irony in all this? Recall the out-of-the-box policy of some wizard in the Economic Advisory Committee who advocated a ban on imported cheese with the justification: ‘can a country that has no foreign exchange afford to eat cheese?’

Hello, again, Mr Jack-in-the-Box. Granted a country that has no foreign exchange ought not to eat imported cheese but can its leaders still afford to fly around in helicopters and ride in SUVs? Why doesn’t the cabinet set an example by getting to work on camels and setting up offices in tents instead of sprawling complexes with perpetual air-conditioning? And while they are demonstrating how people — all people — ought to be living in a country with no foreign exchange, why don’t they turn off the hot water as well since that has now been declared a luxury in the New Pakistan?

Have we learned nothing from history? The Soviet Union collapsed ballooning its defence budget while making people wait in endless queues for the necessities of life. Countries that neglect the minimum welfare of their citizens and fight endless futile wars get hollowed out from within and ultimately implode. This insight was obvious even to a president like Reagan who was otherwise not very bright. All the US had to do was to engage the Soviet Union in an endless arms race and the latter ran out of space.

Modi is a sharper politician and is following the same strategy with Pakistan — no negotiations till the room for manoeuvre disappears. And we are helping him along. When two countries are developing at radically different rates, every day that passes weakens the negotiating position of the laggard till the only recourse left is capitulation or the madness of mutual destruction.

Verily it is said that those whom the gods wish to destroy they first make mad. And when they wish to destroy completely, they make them madder still.

The writer was dean of the School of Humanities and Social Sciences at Lums.
Published in Dawn, March 3rd, 2019

No lessons learnt - Newspaper - DAWN.COM
 
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Bharath

Technical Staff
Dec 1, 2017
791
996
Boston
Modi is a sharper politician and is following the same strategy with Pakistan — no negotiations till the room for manoeuvre disappears. And we are helping him along. When two countries are developing at radically different rates, every day that passes weakens the negotiating position of the laggard till the only recourse left is capitulation or the madness of mutual destruction.
this got tears to my eyes!
"no negotiations till the room for manoeuvre disappears."
 

capricorn

New member
Jan 31, 2018
9
3
NCR
Finance secretary warns of sanctions over FATF non-compliance - Newspaper - DAWN.COM

1551846907100.png


ISLAMABAD: The federal secretary of the finance division on Tuesday warned that Pakistan might face economic sanctions over non-implementation of Financial Action Task Force (FATF) recommendations.

Talking to reporters after attending a meeting of a sub-committee of the Public Accounts Committee (PAC), Finance Secretary Arif Ahmed Khan said Pakistan had to take strict measures to implement the FATF recommendations.

He said that the country had to proceed against the banned outfits in the light of FATF recommendations. He expressed apprehensions that Pakistan might face economic sanctions if the FATF recommendations were ignored and not implemented.

The International Cooperation Review Group (ICRG) of the FATF that reviewed Pakistan’s action plan in recent meetings was not satisfied with the progress on milestones set for January 2019. This was despite improvements in the anti-money laundering and combating the financing of terrorism (AML/CFT) regime and integrated database for currency declaration arrangements.

It expressed concern over Pakistani authorities’ inability to demonstrate why they considered eight proscribed entities to be low risk as opposed to the high-risk view of the Asia Pacific Group (APG) and ICRG.

Therefore, the FATF urged “Pakistan to swiftly complete its action plan, particularly those with timelines of May 2019” to address strategic deficiencies.

The FATF will undertake the next review of Pakistan’s progress in June 2019, which will be preceded by a face-to-face meeting with the Joint Group in May.
In June 2018, Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime and to address its strategic counterterrorism financing-related deficiencies by implementing an action plan to accomplish these objectives. The successful implementation of the action plan and its physical verification by the APG will lead the FATF to clear Pakistan out of its ‘grey list’ or move it into the ‘blacklist’ by September.
During the meeting of the PAC sub-committee, audit officials said the finance division did not present the supplementary grant of Rs105 million in parliament. The committee was examining the audit paras of the finance ministry.

The Auditor General office briefed the committee on 16 supplementary grants of the finance division for 2016-17. The committee expressed displeasure over the anomalies in the financial accounts of government sector institutions. The finance secretary said he had been witnessing such deficiencies for over two decades. Syed Naveed Qamar, a PAC member, expressed the hope that such mistakes would not be repeated in the next fiscal year.

Published in Dawn, March 6th, 2019
Download the new Dawn mobil
 

BlackOpsIndia

Team StratFront
Dec 1, 2017
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will IMF provide loan if FATF conditions r not met ?
IMF loan approval is not based on FATF Black list, Pakistan can still get loan of the size required but conditions will be strict and heavily monitored. Other impacts are Pakistan officially clubbed with North Korea and Iran.

FATF blacklist means increased risk for foreign capital, major transaction that route through New York kept on hold, delayed, therefore increase in cost of business. You are harassed everywhere in the world and everyone treats you like pariah but this is not something new to Pakistan, they are already treated like that all over the world. One of the disadvantage is payment processors will either withdraw leaving common Pakistani high and dry or will increase commission for the delay they face for dollar transactions. Impact is seen everywhere.

I personally don't have much hope that Pakistan will be placed on blacklist.
 

_Anonymous_

Senior Member
Dec 4, 2017
14,553
10,523
Mumbai
IMF loan approval is not based on FATF Black list, Pakistan can still get loan of the size required but conditions will be strict and heavily monitored. Other impacts are Pakistan officially clubbed with North Korea and Iran.

FATF blacklist means increased risk for foreign capital, major transaction that route through New York kept on hold, delayed, therefore increase in cost of business. You are harassed everywhere in the world and everyone treats you like pariah but this is not something new to Pakistan, they are already treated like that all over the world. One of the disadvantage is payment processors will either withdraw leaving common Pakistani high and dry or will increase commission for the delay they face for dollar transactions. Impact is seen everywhere.

I personally don't have much hope that Pakistan will be placed on blacklist.
All that is fine. But do you know, not a single nation dare suspend diplomatic relations with Pakistan? Do you know why? All these nations are owed monies by Pakistan. While Pakistan may not be too interested in maintaining diplomatic relations with the rest of the world, the world is certainly interested in maintaining diplomatic relations with Pakistan, if only to recover their dues.
 

Ashutosh

Vyom
Team StratFront
Nov 30, 2017
426
469
Rajasthan, India
Cost of expected dam: 1100 billion pkr.

Money spent to raise awareness and collect donations for dam: 13 billion pkr.

Money expected from expats: 200 billion USD.

Money collected from expats: 9 million usd
Money collected overall: 9 billion pkr after forceful deductions from salary of people.

Total loss after all donations and hoopla: 4 billion pkr.

Just some pakistani things, I warned few people donating that nothing will happen, corruption and incompetence is embedded in Pakistani blood.

PML-N wants Rs13bn spent on dam fund ads drive recovered from ex-CJP - Newspaper - DAWN.COM

I missed this. Bhai they expect to gather donations enough to match 2/3rds of Pakitan's GDP. ??? Pakistanis Smoke some potent stuff.
 

Bharath

Technical Staff
Dec 1, 2017
791
996
Boston
“While economic growth is slowing down which, in turn, is hurting revenue growth, many of the government’s expenditures are non-discretionary in nature, especially debt servicing and the increase in defence expenditure,” he said.

Defence expenditure is estimated to be Rs1.675 trillion in 2018-19 against the Rs1.1tr budgeted in September last year. In contrast, the Public Sector Development Programme is going to be Rs575 billion as opposed to the original estimate of Rs800bn.

Looking at the above - can we say the squeeze is tightening? another 3-4 years like this - they are right now spending 3 times of Public Sector Dev budget on defense. if they want to eat grass to keep up with us, as good neighbors, we should make them.
 

BlackOpsIndia

Team StratFront
Dec 1, 2017
3,056
3,777
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“While economic growth is slowing down which, in turn, is hurting revenue growth, many of the government’s expenditures are non-discretionary in nature, especially debt servicing and the increase in defence expenditure,” he said.

Defence expenditure is estimated to be Rs1.675 trillion in 2018-19 against the Rs1.1tr budgeted in September last year. In contrast, the Public Sector Development Programme is going to be Rs575 billion as opposed to the original estimate of Rs800bn.

Looking at the above - can we say the squeeze is tightening? another 3-4 years like this - they are right now spending 3 times of Public Sector Dev budget on defense. if they want to eat grass to keep up with us, as good neighbors, we should make them.
These are just estimates, revised estimates at the end of financial year will be telling, they can be way off the mark and expenditure even much higher.
 

RISING SUN

Senior member
Dec 3, 2017
10,255
5,203
Pak-India airspace closure: National institutions suffer Rs2.55 bn loss
Pakistan and India have closed their airspace for each other for the last two weeks after rise in tension between the two countries due to which the national institutions of Pakistan have suffered losses of Rs2.55 billion.

The airlines and civil aviation authorities of both thecountries are enduring massive losses. The flights between Europe to Far-East are not only facing massive financial losses, but the flight duration has also increased, while the airlines have also increased their ticket prices.

The schedule of the airlines flying on these routes has also been affected. The Pakistan International Airlines (PIA) has suffered loss of Rs1.05 billion due to closure of certain routes for the airline, while the Civil Aviation Authority of Pakistan has incurred a loss of around Rs1.5 billion so far due to prevailing tension.

Only a few large airports are still open, while the airlines are now using long routes due to which the air travel duration has increased, which has resulted into increase in air fares. Only the PIA is suffering a loss of over 70 million on daily basis in the head of fuel charges.
Airspace closure: Pakistan suffers Rs2.55 bn loss
 
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