Pakistani Economic Stress Watch

Dilbu · Post by **Dilbu** » 08 Feb 2023 11:31

IN the midst of an economic and political maelstrom, a fresh crisis threatens the availability of drugs in the market, as around 40 pharmaceutical firms have warned that they may halt production within a week due to a number of compounding factors. The key reason behind this crisis is the country’s dire financial situation, which has now begun to affect even the basic necessities of life, piling further misery on that hapless creature known as the common man. In a communication sent to the relevant state officials, including the health ministry and the Drug Regulatory Authority of Pakistan, the pharma manufacturers say they are unable to import raw material for drugs, while due to their inability to raise medicine prices, they are facing severe issues in meeting the cost of production. Industry leaders say dollars are not available, containers are not being cleared while the rupee’s freefall against the dollar has made production and transportation costs shoot up. These are familiar plaints emerging from all sectors; yet with the pharma industry, the issue becomes particularly sensitive, and can mean the difference between life and death.

vimal · Post by **vimal** » 08 Feb 2023 11:48

Why isn’t Modi sending aid to Pakistan like he did for Syria and Turkiye?
Mudi must rezine.

Manish_P · Post by **Manish_P** » 08 Feb 2023 15:58

Looks like none of the fathers wants to step forward first to fork out the Illegitimate child support

Crucial IMF talks hang in balance - Global lender does not see $5b foreign loans materialising soon

The International Monetary Fund (IMF) suspects that Pakistan may not receive the projected $5 billion loans from multilateral and commercial creditors as Islamabad still awaits the Memorandum for Economic and Financial Policies (MEFP) draft with only two days left to conclude talks.

Pakistan had hoped that by Monday, it would receive the first draft of the MEFP –the key programme document that will reflect the revised fiscal, monetary and external sector targets for the remainder of this fiscal year and the projections for the next fiscal year. The IMF has not yet shared the draft of the MEFP with Pakistan, the top functionaries told The Express Tribune late Tuesday evening. Any delay could make the wind up of the talks very challenging in the next 48 hours – the remaining time in the conclusion of the scheduled negotiations

They added that the IMF was of the view that $3.6 billion worth of projected non-Chinese commercial loans would not materialise. The Ministry of Finance told the IMF that this money could be received, as one Gulf and one European bank had shown interest. But these offers were at a very preliminary stage and subject to the condition of staff-level agreement between Pakistan and the IMF.

The sources said that the IMF also revised downwards the projected loans from the World Bank by nearly $1 billion due to its suspicions about the budget support loans.

Dilbu · Post by **Dilbu** » 08 Feb 2023 16:36

And IMF is no mood to finalise things in a jiffy.
PAKISTAN TERMS IMF’S FEW CONDITIONS ‘UNREALISTIC’

ISLAMABAD: The Pakistani officials termed few of the International Monetary Fund (IMF)’s conditions, ‘unrealistic’, ARY News reported.

Sources told ARY News that the first phase of policy talks was held between IMF and Pakistani officials and discussed the details regarding external financing.

The state bank briefed the IMF team about the needs of Pakistan’s external financing but the Pakistani officials did not agree with their prediction regarding external financing.

Sources said that the IMF and Pakistani officials could not decide on the target for foreign reserves.

The Pakistani team told the IMF officials there is room for the betterment of the county’s economy but the problems will not solve by burdening the people.

Sources further revealed that the importance of talks on February 8 and 9 has increased now and they may delay further.

partha · Post by **partha** » 09 Feb 2023 00:47

I think there is a secret condition about reduction in defense budget which is why the Govt is using words like "unrealistic", "beyond imagination" etc.

Meanwhile petroleum minister is warning against hoarding petrol and assures there is enough supply. Shouldn't he be assuring supply of Russian crude since a "deal" was announced recently where Pakistan would pay with currency of a friendly country?

https://www.dawn.com/news/1736026/musad ... sufficient

Replying to a question, he said an agreement with Russia would hopefully be finalised, following which low-cost crude oil would start arriving in Pakistan.

Oh!! the agreement is not even finalized? Why am I not surprised.

Neela · Post by **Neela** » 09 Feb 2023 01:35

Electricity
Petrol
Wheat
Now medicines.

@CurrentPaki1
https://twitter.com/CurrentPaki1/status ... 3539684352
300% increase in medicine prices
Pakistan to run out of medicines 'in a week'

Tik tok tik tok. We are getting there.

yensoy · Post by **yensoy** » 09 Feb 2023 02:51

partha wrote:I think there is a secret condition about reduction in defense budget which is why the Govt is using words like "unrealistic", "beyond imagination" etc.
...
Oh!! the agreement is not even finalized? Why am I not surprised.

Actually this is a good thing for us. Since it needs to remain secret, there will be no reduction of forces or their salaries. So any cost cutting will have to come from their equipment budgets alone. Over time, we will see a bloated army with rusty arms and little training.

Atmavik · Post by **Atmavik** » 09 Feb 2023 04:02

IMF Teams leave tomorrow. Fuel companies have said that they dont have money for new imports if no deal is reached then it will be pop corn time.

CalvinH · Post by **CalvinH** » 09 Feb 2023 05:11

Pulses, Tea..too.

IMF has already asked Government to move the Fauji pensions in Fauji Budget.

In one of the show two guys calculated that even if the IMF deal goes through and Pakis end up getting addition $4 Billion from friendly countries after that, Pakis will be back to square one in 2-3 months. As per them $2bn of the money will be exhausted immediately in LCs that are pending with goods stuck at ports.

The IMF may have to come back very soon. Pakis are in a real hole this time.

nachiket · Post by **nachiket** » 09 Feb 2023 05:36

CalvinH wrote: The IMF may have to come back very soon. Pakis are in a real hole this time.

The IMF knows that very well. Even in the best case scenario, the current program is to end in June and everyone including the IMF expects the pakis to immediately go begging for a second one.

Manish_P · Post by **Manish_P** » 09 Feb 2023 08:21

partha wrote:I think there is a secret condition about reduction in defense budget which is why the Govt is using words like "unrealistic", "beyond imagination" etc.....

Buzz among some informed handles on twitter is a cut of 20% is being demanded. And they want a cut in both the CAPEX and OPEX. Hence they are insisting the pensions be moved back under the civilian budget.

Anujan · Post by **Anujan** » 09 Feb 2023 09:52

Positive news!!!

ADB makes second offer to fund CPEC’s $10b ML-I project

The Asian Development Bank (ADB) has offered to fund China-Pakistan Economic Corridor (CPEC)’s $10 billion Mainline-I (ML-I) project, said the administration head of the planning ministry on Wednesday

Not so Positive news :-(

A diplomatic source privy to these discussions said that ADB has only offered to finance the portion of the ML-I project severely damaged by the recent floods

https://tribune.com.pk/story/2400203/ad ... -i-project

Anujan · Post by **Anujan** » 09 Feb 2023 09:58

https://tribune.com.pk/story/2400194/no ... -imf-talks

No breakthrough in IMF talks

Talks between Pakistan and the International Monetary Fund (IMF) on Wednesday boiled down to two most crucial issues – credibility of government’s assurances and reliability of foreign loans committed by other nations, delaying the handover of Memorandum for Economic and Financial Policies (MEFP).

....

In order to break the deadlock, Finance Minister Ishaq Dar and IMF Mission Chief Nathan Porter met, away from the media glare and behind closed doors at the PM House. The meeting venue was changed from the finance ministry to the PM House to avoid the media. Despite the interaction, the government could not convince the mission chief to share the draft of MEFP

“We are ready to commit to what the IMF is asking but the IMF does not trust our words,” said one negotiator on condition of anonymity.

minister of state for petroleum kept the IMF mission chief waiting for about an hour during one of the meetings this week, said the sources.

In his defense, he was standing in queue in a petrol station to fill up his motorcycle.

We need to hire this Nathan Porter guy. Seems to be capable of Chai-Biskoot sessions that rival our Babus!

vimal · Post by **vimal** » 09 Feb 2023 10:02

What happened to the 100 nation ummah that bakis keep talking about.
I'm guessing if everyone one of them gives 10 million $, problem will be solved.

Atmavik · Post by **Atmavik** » 09 Feb 2023 10:40

vimal wrote:What happened to the 100 nation ummah that bakis keep talking about.
I'm guessing if everyone one of them gives 10 million $, problem will be solved.

tangential but ...

Habib Khan
@HabibKhanT
Muslim Ummah is sending prayers for Türkiye and Syria, and non-Muslims are sending humanitarian aid.

Deans · Post by **Deans** » 09 Feb 2023 10:43

sajo wrote:
Dilbu wrote: According to data released recently by the Bureau of Emigration and Overseas Employment (BEOE), some 832,339 Pakistanis left the country in 2022 in an attempt to secure a better future.

The number of immigrants in 2022 is significantly higher than the 288,280 having left in 2021. In 2015, however, 946,571 Pakistani’s left for the overseas, the highest number so far recorded in the history of the country.

Can some learned and pious Maulaners let the awaam know how come such massive numbers can leave for phoren shores without having the benefit of education or a business base ? The consulates in Bakiland would be working overtime and then some to process all these numbers.

It is the number of people going abroad that year (excluding short term people like tourists, who return in a few days).
It does not include the number returning home (and not going abroad again) that year.
The net migration is about 200,000 per year. i.e. if 832000 left Pak in 2022, 632000 returned.

5 years ago it was approx. 250,000 net migrants in a year. This number has reduced each year for the last 5 (from 250,000 to 250,000 net) because, I believe more of them are losing jobs in the Middle east than earlier. There is a decline in remittances from Pakistanis in Saudi and UAE.
Pak journos are of course incapable of this analysis.

India's net migration (PER MILLION - Which is how it is calculated) is a third of Pak i.e fewer people leave India.
While net migration from India is falling (lesser people leaving), remittances are increasing - particularly from the US, which has replaced UAE as the largest source of Indian remittances. Therefore those Indians leaving are doing so for relatively better paying jobs.

Pak's net migration is worse than Iraq, Congo, Mexico, Niger etc.

Deans · Post by **Deans** » 09 Feb 2023 10:48

Neela wrote:Electricity
Petrol
Wheat
Now medicines.

Why are all these things necessary ? FM has said Allah will provide.

Dilbu · Post by **Dilbu** » 09 Feb 2023 10:50

This is getting more and more painful for pakis. I am sure IMF will find a big hole in this data also.
IMF DEMANDS RECORDS OF PAKISTAN’S FLOOD RELIEF EXPENDITURES

ISLAMABAD: The International Monetary Fund (IMF) has demanded records of flood rehabilitation expenditures as talks between Pakistan-IMF continued to revive $7 billion Extended Fund Facility (EFF) stalled for months, ARY News reported on Wednesday, citing sources.

According to details, the policy-level talks between Pakistan and International Monetary Fund entered a crucial phase as the IMF mission held a virtual meeting with Prime Minister (PM) Shehbaz Sharif.

Sources told ARY News that the IMF has conditionally agreed to exempt Rs475 in primary budget deficit, making the exemption conditional to verification of flood relief expenditure.

Sources claimed that the lender demanded the records of flood rehabilitation expenditures from Pakistan, adding that the government would have to provide complete monitoring of flood expenditure and details.

Dilbu · Post by **Dilbu** » 09 Feb 2023 10:55

Slowly the big picture is starting to emerge.
Pakistan to repay foreign debt worth $22 billion in 12 months

KARACHI: Amid efforts to dodge the imminent risk of default, Pakistan says it is due to repay foreign debt and interest worth almost $22 billion over the next 12 months.

The dollar-strapped government, upon successful resumption of the International Monetary Fund (IMF) programme, is expected to initiate talks with creditors to restructure its foreign debt. The country’s debt obligations currently stand significantly higher than the inflows it expects to receive in the coming years.

Data from the State Bank of Pakistan (SBP) suggests that Pakistan is to repay a total debt of $21.95 billion in one year; $19.34 billion in principal and another $2.60 billion in interest on the total debt.

According to data, however, the central bank has projected no foreign debt inflows for the next 12 months.

The breakdown of data suggests the country is to pay off $3.95 billion within one month. In the next three months, it is due to return $4.63 billion and is to repay another $13.37 billion in the last eight months of the period under review.

Pakistan is to return around $80 billion in foreign debt over the next three-and-half years (from February 2023 until June 2026).

On the contrary, however, the country’s foreign exchange reserves have depleted to an alarming level of less than a three-week import cover at $3.1 billion at present.

Arif Habib Limited (AHL) Head of Research, Tahir Abbas said, “The government should opt for re-profiling its foreign debt instead of restructuring. Re-profiling will help the government get an extension of about four to five-years to repay debt from bilateral and commercial creditors, including friendly-countries like China, Saudi Arabia and the United Arab Emirates.”{In other words, instead of deferring the payment to next year creditors should be asked to forget the repayment}

Restructuring, he explained, is what the nation has been doing for a while and will only allow the debt to be rolled over for a brief period of time – around one-year.

srin · Post by **srin** » 09 Feb 2023 12:02

Whenever I visit this thread, I always think about their sweeter-than-honey friend and the next thing that comes to my mind is an old video of Nawaz Sharif meeting Chinese leaders and mentioning the deeper than ocean friendship (unable to find the video though).
How come the chinese haven't helped ?

Jits · Post by **Jits** » 09 Feb 2023 12:10

quote="Dilbu"]Slowly the big picture is starting to emerge.
Pakistan to repay foreign debt worth $22 billion in 12 months

KARACHI: Amid efforts to dodge the imminent risk of default, Pakistan says it is due to repay foreign debt and interest worth almost $22 billion over the next 12 months.

Pakistan is to return around $80 billion in foreign debt over the next three-and-half years (from February 2023 until June 2026).

On the contrary, however, the country’s foreign exchange reserves have depleted to an alarming level of less than a three-week import cover at $3.1 billion at present.

There is no way pakistan can pay $ 22 billion this year and $80 billion in next 3 years even if current talks with IMF were to fructify, given the four fathers are in no mood to relent. The only way out for pakistan is to take some strategic hair cuts in exchange of debt forgiveness and restructring, so pakistan can be given 3 options:

1) Give away control of POK and Gilgit - Balistan.
2) Give away nukes
3) Give away Balochistan

Neela · Post by **Neela** » 09 Feb 2023 12:26

Dilbu wrote:Slowly the big picture is starting to emerge.
Pakistan to repay foreign debt worth $22 billion in 12 months

Pakistan is to return around $80 billion in foreign debt over the next three-and-half years (from February 2023 until June 2026).

On the contrary, however, the country’s foreign exchange reserves have depleted to an alarming level of less than a three-week import cover at $3.1 billion at present.

Arif Habib Limited (AHL) Head of Research, Tahir Abbas said, “The government should opt for re-profiling its foreign debt instead of restructuring. Re-profiling will help the government get an extension of about four to five-years to repay debt from bilateral and commercial creditors, including friendly-countries like China, Saudi Arabia and the United Arab Emirates.”{In other words, instead of deferring the payment to next year creditors should be asked to forget the repayment}

Restructuring, he explained, is what the nation has been doing for a while and will only allow the debt to be rolled over for a brief period of time – around one-year.

[ A mix of wishful thinking and ground reality]
Lets get realistic here.
Is there any entity or person in Pak who has the mental capacity *and* political clout to make fundamental changes .?
Since inception, it has lived on being at a strategic frontier and prided itself at being a rentier state for short term gains on foreign military investments. There is no Plan B. Even Plan A is lazy a$$ gimmick that can be called "ransom" in street parlance.

It takes successive generations of investment, hard work to get any type of competency that is of economic importance and/or national interest. Pakistan has none of that. The only complimentary/pity participation prize they have is on textiles. But the primary advantage they have here is ultra low cost labor bordering on exploitation.

Whats even more astounding is how they handle IMF negotiations - and seeing it as a battle rather than instrospecting why they are in such a mess. Dont they realize they are going to be in even more trouble given the debt they are in.
Dont they realize other lenders are watching.

Pakis have nothing. Literally and figuratively. how these bunch of clowns get to run a country - it is actually a disgrace to human intelligence.I really dont see how a major humanitarian disaster on multiple fronts can be avoided at this point.
Lawlessness, riots, Islamic fundamentalism, violent power struggles, fiefdoms, malnutrition, hunger, famine, internecine wars, breakaway factions, fratricide, Shia-Sunni-Ahmadi violence - they have actually arrived in Pakistan and will get worse from here on

RajaRudra · Post by **RajaRudra** » 09 Feb 2023 14:27

Neela wrote:
Dilbu wrote:Slowly the big picture is starting to emerge.
Pakistan to repay foreign debt worth $22 billion in 12 months

[ A mix of wishful thinking and ground reality]
Lets get realistic here.
Is there any entity or person in Pak who has the mental capacity *and* political clout to make fundamental changes .?
Since inception, it has lived on being at a strategic frontier and prided itself at being a rentier state for short term gains on foreign military investments. There is no Plan B. Even Plan A is lazy a$$ gimmick that can be called "ransom" in street parlance.

How about Paki Fouz putting boots in Ukraine, support of NATO. Will that provide for the amount Pakistan is looking for now solving the repayment issue.

Vadivel · Post by **Vadivel** » 09 Feb 2023 14:52

Daaar-IMF discussions reminds me of a scean I acted. Sorry only in tamil

Dumal · Post by **Dumal** » 09 Feb 2023 17:32

Vadivel wrote: I acted

Nice one!

Neela · Post by **Neela** » 09 Feb 2023 17:37

RajaRudra wrote:
Neela wrote: [ A mix of wishful thinking and ground reality]
Lets get realistic here.
Is there any entity or person in Pak who has the mental capacity *and* political clout to make fundamental changes .?
Since inception, it has lived on being at a strategic frontier and prided itself at being a rentier state for short term gains on foreign military investments. There is no Plan B. Even Plan A is lazy a$$ gimmick that can be called "ransom" in street parlance.

How about Paki Fouz putting boots in Ukraine, support of NATO. Will that provide for the amount Pakistan is looking for now solving the repayment issue.

There is a fundamental premise here which *I believe* is different - that Paki fauj care about the economy and act in national interest. They dont care as long as their interests are taken care of.
Why would Fauj stick their neck out when they can exploit their own illiterate folk , ring fence the captive market and produce+sell goods to them without much cost or risk. Easy peasy and the till keeps ringing.
The ME Fauj assignments - Qatar, Saudia, etc are pink little flowers in mild breeze in the meadow type - easy money. A little gunfire and I am sure the brown khakis would turn browner and Pakis would run for cover. I am sure even there, there is a big cut for the generals and crumbs for the pawns.

chetak · Post by **chetak** » 09 Feb 2023 19:55

vimal wrote:What happened to the 100 nation ummah that bakis keep talking about.
I'm guessing if everyone one of them gives 10 million $, problem will be solved.

muslim ummah is sending "prayers" for turki and syria, and non-muslims are sending humanitarian aid.

drnayar · Post by **drnayar** » 09 Feb 2023 20:08

more important how is Pakistan going to fund the Faujis ?

Hidden in all those IMF requests would be money to fund the paki army. The creditors would indirectly be funding the army rather than the country as funds are purely allocated in that order

partha · Post by **partha** » 09 Feb 2023 21:46

Speculation on social media regarding army chief visiting US ‘baseless’: ISPR

If they are denying it must be true. Hafiz Munir could be on a secret visit to US from UK in a desperate attempt to strike an IMF deal. It does indeed look like defense budget cut is one of the IMF conditions. Is Munir's US visit the reason why Dar is promising a deal today?

Matters with IMF expected to be settled today: Dar

Anujan · Post by **Anujan** » 09 Feb 2023 22:50

https://tribune.com.pk/story/2400304/pa ... ut-package

Pakistan clinches deal with IMF over stalled bailout package

Sources confirmed to Express News that the two sides had finally reached consensus over the details of lending programme. They said that Prime Minister Shehbaz Sharif has also approved the deal and all mattters over the bailout program have been settled.

partha · Post by **partha** » 09 Feb 2023 22:53

Nothing is guaranteed until IMF's official statement!

partha · Post by **partha** » 10 Feb 2023 00:16

https://www.thenews.com.pk/latest/10390 ... mf-sources

Deadlock persists between Pakistan, IMF over ninth review
Pakistan to soon strike staff-level agreement with global lender, says finance secretary

Until IMF releases an official communication, just assume there is no deal yet.

Anujan · Post by **Anujan** » 10 Feb 2023 00:35

^^
But Dar Sahib said that he knows how to deal with IMF

Meanwhile

https://www.dawn.com/news/1736221/pakis ... -below-3bn

Pakistan’s foreign exchange reserves fall below $3bn

Pakistan’s foreign exchange reserves held by the central bank decreased by $170 million to $2.9 billion in the week ending on February 3, the State Bank of Pakistan (SBP) said on Thursday.

partha · Post by **partha** » 10 Feb 2023 00:38

I thought the last remaining $3B were Saudi deposits which were not for consumption. How come Pakistan is spending that?

Anujan · Post by **Anujan** » 10 Feb 2023 00:44

I guess they used it to repay loans from Saudis.

Checkmate Saudis!!

Meanwhile

https://www.brecorder.com/news/40225263 ... ppl-shares

Qatar has reportedly agreed to consider Pakistan’s offer to buy shares/ stakes of Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) and sell Mirage-2000 fighter aircrafts to Pakistan.

I thought Pakis were getting thundaar, vigorous dragon, Crouching tiger etc? Why Mirage 2000?

drnayar · Post by **drnayar** » 10 Feb 2023 00:47

partha wrote:I thought the last remaining $3B were Saudi deposits which were not for consumption. How come Pakistan is spending that?

do they care whose money it is "was"

jash_p · Post by **jash_p** » 10 Feb 2023 00:57

Pakistan, IMF fail to reach staff level agreement on stalled bailout package
Govt, IMF agree to a broad framework aimed at satisfying the lender of the last resort in the coming days

Shahbaz Rana
February 09, 2023

AoA we rejected Kufar dictate

Prem · Post by **Prem** » 10 Feb 2023 03:35

Can Qatari sell Mirtag2k to Pakistan without approval from France ?

vimal · Post by **vimal** » 10 Feb 2023 03:38

Prem wrote:Can Qatari sell Mirtag2k to Pakistan without approval from France ?

How can anyone sell anything to a bankrupt sh*thole like Pakis

Anujan · Post by **Anujan** » 10 Feb 2023 04:30

Pakistan already has a lot of french equipment. Like Mirage 5, Agosta submarines, Fennec helicopters

MBDA wanted to make missiles for Bandaar.

So wont be surprised if France approves the sale. The larger question is if Pakistan has the money or if UAE is going to give it for "free" (read, in exchange for a few bums)