The downgrade of sovereign creditworthiness should sound a warning to the country’s policymakers. The government has already defaulted on its (domestic) sovereign obligations to the IPPs only a few weeks ago.
And the possibility of Pakistan defaulting on its foreign debt repayments over the next couple of years cannot be ruled out with the large $6.3bn in principal and interest falling due because of the IMF between 2013 and 2015.
Bad news has continued to dog the Pakistani economy with great persistence over the last four and a half years. Recent addition to bad news include Moody’s – an international rating agency – downgrading Pakistan’s sovereign credit rating by one notch, that is, from B3 to Caa1; IMF conceding that its $11.3 billion standby arrangement with Pakistan has failed to deliver the desired results and PEW Research Centre reporting that overwhelming Pakistanis remain dissatisfied with their country’s economy. The fiscal year 2011-12 ending on June 30, 2012, also presented damaging statistics on Pakistan’s economy.
Real GDP grew by 3.7 percent in 2011-12. This number is not credible for the following reasons. After the change of base and rebasing of the national accounts fiasco, the Pakistan Bureau of Statistics (PBS) was given a few days to come up with national accounts based on old methodology and old base. Preparing the country’s national accounts at such short notice and coming close to the finance minister’s ‘desired’ growth rate (four percent) was indeed a risky job.
Read the rest of the article to learn how the pakis manipulate their national performance metrics.Pakistan’s economic difficulties are largely self-inflicted and the country’s political leadership and their economic managers are to be blamed.
Fiscal deficit reaches whopping Rs1.68 trillion
While the government is still trying to somehow reconcile the numbers – the budget deficit has reached a whopping Rs1.68 trillion or 8% of the total size of the economy.
http://tribune.com.pk/story/409308/fisc ... -trillion/
Competitiveness report: Global ranking paints dismal picture of economy
Country is consistently ranked among the worst in business rankings
By Our Correspondent
Published: September 6, 2012
ISLAMABAD:
Pakistan’s global competitiveness ranking has fallen by a further six notches: the country is now ranked among the bottom 20 of the 144 economies surveyed, according to the World Economic Forum Global Competitiveness Report 2012-2013.
Countries including Uganda, Ghana and Ethiopia; and regional peers like Sri Lanka (ranked 68), Bangladesh and India (ranked 59); enjoy a higher rating than Pakistan. Pakistan, meanwhile, is placed at number 124 in a list of 144. …………………………
Express Tribune
On a positive paki spin in another news story, "the paki economy beats 20 other global economies".arun wrote:Competitiveness report: Global ranking paints dismal picture of economy
More than 100 million Pakistanis are ‘food insecure’
More than 100 million Pakistanis make $2 or less
According to Oxford Poverty and Human Development Initiative (OPHI), the incidence of multidimensional poverty in Pakistan stands at 49.4 percent of the population – that is one out of every two Pakistanis.
60 percent of Pakistan is taken up by deserts and all we are left with is a mere 0.336 acres per capita worth of arable land
Do we have any cultural attributes that become a hurdle to prosperity? Well the Indian culture is not much different but after being in the doldrums for half a century the Indian economy is now turning around. Could it be the climate? Is Indian climate much different?
Are our leaders incapable of delivering prosperity?... our leaders are fully aware of the ‘right policy mix’ but they have deliberately organised every institution within the society to benefit the elite – and only the elite.
Aditya ji, they still have not paid money to the Swedes for the SAAB AWACS aircraft and also for the JF-17 I believe. They repay with seriousness only to IMF as not paying up would mean not getting loans in the future and IMF's ability to seriously harm nations. In a sense, Pakistan is a big big ponzi scheme.Aditya_V wrote:I kkep hearing Pakistan has no money, but they never default on loans, face economic collapse or cut down of weaposn purchases and spending. I will belive Pakis are in trouble economically only if some large scale riots with 100's dead happens
[/url]The Government of Pakistan finds itself mired in a new controversy: a Chinese firm involved with the Nandipur power plant has demanded payment of $40 million in compensation for the oft delayed construction of the 425 megawatt project, if the government still wishes for the firm to continue with the project. The combined-cycle power plant was to be installed in Nandipur, near Gujranwala in Punjab.
The Chinese firm had served a notice to the Government of Pakistan calling for the termination of the project contract due to delays in its construction. During renegotiations, however, the firm agreed not to ditch the project; nonetheless, it countered with a demand that it be paid for losses suffered because of depreciation and damages on machinery stranded at the Karachi Port for the two year delay in the project’s completion.
The Economic Coordination Committee (ECC), in a meeting held in the first week of July, had approved an increase in the size of sovereign guarantees for the project from Rs5.3 to Rs19.1 billion, in favour of a consortium of local banks, as a time-gap arrangement till foreign loans for the Nandipur Project could be obtained. The economic body had also waived demurrage and detention charges amounting to Rs856.5 million on machinery meant for the project that was to pass through the Karachi Port.
These beggars wanted to complete Neelum-jeelum Hydroelectric project before India to claim water rights.Official sources said that the firm now wants new terms and conditions if the Government of Pakistan wants it to continue with the project. “The project is once again stalled due to the new demands of the Chinese firm for a huge sum of money [sic],” a source said.
Aditya_V wrote:I kkep hearing Pakistan has no money, but they never default on loans, face economic collapse or cut down of weaposn purchases and spending. I will belive Pakis are in trouble economically only if some large scale riots with 100's dead happens
Two years after floods devastated Pakistan, the European Union has agreed to a trade concessions package initially intended as relief aid that would help the important textiles sector get back on its feet. An energy crisis will limit manufacturers' ability to take advantage of the deal, which comes with many strings attached. - Syed Fazl-e-Haider
they have the first call on the resources of India as per MMS.Carl wrote:EU grants Pakistan flood dealTwo years after floods devastated Pakistan, the European Union has agreed to a trade concessions package initially intended as relief aid that would help the important textiles sector get back on its feet. An energy crisis will limit manufacturers' ability to take advantage of the deal, which comes with many strings attached. - Syed Fazl-e-Haider
And where would this money go- to help flood victoms or TSP armed forces forces. Logical person would say the latter.Carl wrote:EU grants Pakistan flood dealTwo years after floods devastated Pakistan, the European Union has agreed to a trade concessions package initially intended as relief aid that would help the important textiles sector get back on its feet. An energy crisis will limit manufacturers' ability to take advantage of the deal, which comes with many strings attached. - Syed Fazl-e-Haider
Not so fast. Looks like the trade concessions granted by the EU may be in jeopardy again. From Pak Tribune:Carl wrote:EU grants Pakistan flood dealTwo years after floods devastated Pakistan, the European Union has agreed to a trade concessions package initially intended as relief aid that would help the important textiles sector get back on its feet. An energy crisis will limit manufacturers' ability to take advantage of the deal, which comes with many strings attached. - Syed Fazl-e-Haider
Methinks EU is using every excuse at hand to not grant the Pakis any trade concessions, while claiming to do so.The execution of soldier Muhammad Hussain has risked Pakistan’s hard-earned trading leverages with the European Union (EU) by breaking the four-year moratorium on death penalty which served as a condition for duty-free access to EU markets.
As a fatal coincidence, the penalty overlapped the coming into force of EU’s trade concessions which, after years of tedious dialogue, became operational on November 16. Facilitated trade required Pakistan to meet some human rights benchmarks, including the curtailment of the death penalty.
Really 'project aid'! pawkis have no shame.Pakistan’s net foreign inflows in project aidremained negative $80 million during the first four months of the current financial year, according to official data. Moreover, Pakistani officials are reportedly ready to undertake preparatory work for entering into a fresh loan programme with the IMF on the sidelines of the Strategic Dialogue meeting in Washington D.C on November 29 and 30.
There will be no other option available to Pakistan but to seek a fresh loan from the IMF keeping in view heavy repayments to the tune of $3.4 billion in the next financial year when, according to official estimates, the country’s foreign currency held by the SBP would be slashed to approximately $7.5 billion by June 30, 2013.
Pakinomics is truly amazing.In the first four months of FY 13, the current account deficit showed surplus position of $258 million mainly because of breathing space received by Pakistan of $1.2 billion from the US in the form of the Coalition Support Fund. “This positive impact on current account deficit was expected to evaporate from next month,” the source said.
Pakistan’s basmati exports declined by 60 percent during the ongoing fiscal year after India lifted ban on its rice exports last year, said an official of the Rice Exporters Association of Pakistan (REAP), on Friday
Neighbour's envy, owner's pride.“India may report a production of around 100 million tons of rice this season against an estimated 6.5 million tons in Pakistan,” he said: adding, “India might beat the world’s largest grower of long grain rice, Thailand in rice exports this year.”
$194 million less for TSPA for buying military hardware!In the value-term, the exports fell by 56 percent to $152 million from $346 million last year, he said.
From when did they pay for their military. Either Unkil gives after a session of GUBO or Cheen gives it to them for paint job.RajeshA wrote:Seems like more Basmati we sell, the less Bandooken Pakis will buy!
$194 million less for TSPA for buying military hardware!In the value-term, the exports fell by 56 percent to $152 million from $346 million last year, he said.
In Dubai I saw a huge poster by HSBC that TSP was the second largest exporter of textiles.Anindya wrote:From Chanaakya's post yesterday....
I think, this is a critical line of thinking. Our leaders and WKK will seldom allow us to take military action action against Pakistanis, even when conditions are actually quite dire. So, what can be done, short of military action or wrapping some of these terrorists in pig skin, when they're caught or killed.1. This is the time drop MFN status for Pakis. Extend only when Pakis also give it. Reciprocity.
2.Stop VOA and easy Visa regime. Suspend it indefinitely .
3. Cancel Visa for all Pakistanis in India and ask them to leave India within 15 days. Remaining pakis after fifteen day should be rounded up and detained.
4.Stop train , buses and truck movements.
5. Oppose Pakis in international forum for any loans and aid.
- Invest in Textile industry: The Pakistani textile industry is not very competitive to begin with, but I believe it can be practically shut down if countries like India and even Bangladesh invest a little more and give some significant tax reliefs to these industries. Help kill textiles and cotton farming in Pakistan
- No trade and business CBMs - no Pakistani investments in India, no MFN, no cross LOC trade, no access to Indian markets for Pakistani businesses. Indian businesses should be able to grow without access to Pakistani markets, but Pakistan does not have the intellectual and cultural horsepower to succeed in a globalized world.
- No Pakistani should be legally or illegally allowed into India - no visas, no work permits, no medical visas, no student visas or a grandfather clause. People to People contacts with Pakistanis does no country any good.
- Raise the investment levels in defense to 3% - Pakistan has this insane urge to keep up with Indian defense spending. Manage defense spending and raise it - ask for offsets and make not so subtle noises about risks of doing deals with countries that do business with Pakistan.
- Spend money on lobbying - from the issue of the need for reversing the unbalanced IWT to the habitual grooming of young girls in western nations by Pakistanis - everything must be raised and repeated in western media again and again. Get professors of Indian origin to reject Pakistani applicants to colleges/univs in Europe and US.
Do things that are at least possible to do, given the extremely inability of our leadership to take any meaningful military action against Pakistani debauchery.
Pakistan is likely to get chair of the General Council the highest level decision making body of the Geneva-based World Trade Organization for a period of one year
Next stop: Pakis getting to chair the Human Rights Commission? Hey, Libya got the chair in 2004.Pakistan’s commerce minister will chair the ministerial which will consider various important issues especially the agriculture sector.
Shortfall in demand and supply of power continues to show an upward trend, causing extended hours of loadshedding in the provincial metropolis. According to official figures, the shortfall of electricity is at 5,000MW as electricity generation is just 9,400MW while its demand is at 14,400MW. Resultantly, loadshedding, spanning over 10 hours a day, continues haunting the consumers against the planned outages of just two hours in urban and rural areas.
Ok so Pakis would go Libya way??anupmisra wrote:Will the madness ever end? Pakistan likely to get WTO’s Council chair. Must be because the pakis have a track record of managing their FTA's so well.
Pakistan is likely to get chair of the General Council the highest level decision making body of the Geneva-based World Trade Organization for a period of one yearNext stop: Pakis getting to chair the Human Rights Commission? Hey, Libya got the chair in 2004.Pakistan’s commerce minister will chair the ministerial which will consider various important issues especially the agriculture sector.
So true.ramana wrote:There is gold in this thread if one can glean it.
http://www.eximguru.com/export-import-n ... 11049.aspxIndia has unwittingly pursued policies and actions that have helped and promoted Pakistan's foreign trade in agro commodities. Since 2006, trading trends in non-basmati rice, wheat, sugar, soymeal and onions lend confirmation to this fact.
The government virtually granted special status to Pakistan when it first restricted and then prohibited export of Indian non-basmati rice in 2007.
Pakistan was then free to exploit and substitute 3-4 million tonnes - of the seven million tonnes of its milled rice output - of west Asian and African markets fostered by India for four years. Today, it is well established as a competing country. Non-basmati rice is not the staple food of Pakistan; only 45% is consumed locally, and the rest is exported. Basmati rice is their preferred cuisine.
Likewise, our neighbour also developed new capacities for parboiled rice to cater to special requirements of Bangladesh and South Africa. After India's aggressive re-entry in September 2011, Pakistan's export of parboiled rice is down to a trickle; parboiled rice capacities are shut, but capabilities to reinvent them at a short notice do exist.
Now an established competitor, Pakistan is desperately seeking to match Indian prices of white rice, suggesting that their trading operations may either become more efficient or less profitable. Indeed, a unique parallel where the absence of competition provides market access and business rivalry contributes to greater adaptability.
In 2008, India crossbred a new hybrid basmati variety of Pusa 1121 with 8.2-mm grain length (against 6.2 mm of parmal range) that became an elite acquisition of Iranian market consuming 0.8-1 million tonnes per annum at almost $1,000 per tonne fob - which is double the valueof non-basmati rice. No patent exists for 1121. Pakistan has cloned its strain. Surely, Pakistan will improve upon this hybridisation and effectively compete incoming years.
Likewise, five years of prohibition on Indian wheat export enabled Pakistan to ship around two million tonnes wheat in two years (2010-11 and 2011-12). After lifting of India's embargo in September 2011, their business has declined significantly. USDA estimates Pakistan wheat export reduced to merely 0.3 million tonnes in 2012-13. A continued prevarication on subsidised export of Indian wheat may be advantageous to the competing origins in general.
On a request from Bangladesh in 2010, the government notified export of 0.5 million tonnes of FCI's wheat and rice to Bangladesh on a government-to-government basis. India and Bangladesh failed to arrive at mutually-acceptable commercial conditions. Indian exports were abandoned. Pakistan substantially filled the gap by private exports and made good Indian failure.
India's wheat gift of 0.25 million tonnes to Afghanistan in 2011-12, most of which was recently loaded from Kandla to Karachi port and then dispatched to Kabul via road, enabled Pakistan handling and transportation earnings. Due to grossly insufficient milling facilities in Afghanistan, Pakistani flour millers would have also been remunerated for tolling wheat flour by government of Afghanistan.
In 2012, the government negotiated the rupee payment arrangement for trade with Iran, in which, apart from other commodities, wheat figures as the prime commodity to be bartered against Iranian crude. Pakistan is also negotiating supplies of its wheat to Iran in return for Iranian urea. Wheat deals are currently held in abeyance due to quarantine concerns between Iran and India. India is proactively seeking its resolution with Iran. Pakistan may benefit automatically as phytosanitary apprehensions are common in the subcontinent.
On May 2-3, 2012, the government cleared quota-free sugar for export on open general licence without quantitative restrictions in pursuance to pleadings of the Indian Sugar Mills Association for better realisations abroad.
It may not be a coincidence that Pakistan Sugar Mills Association met President Asif Zardari the very next day (May 4, 2012) and sugar export quota from Pakistani mills was enhanced from one lakh tonnes to two lakh tonnes. A clear case of policy imitation!
Erroneous estimation of Indian annual sugar output in 2010 led to upward revision of production estimates from 14 million tonnes to 19 million tonnes. Local prices tanked. The government permitted re-export of 1.3 lakh tones of imported sugar lying at ports due to high-priced open general licence imports.
In the same year, Trading Corporation of Pakistan (TCP) was also importing sugar to mitigate shortages in Pakistan. Singapore traders arranged to ship one lakh tonnes of Indian sugar out of re-export allocation from Kandla to Karachi in a matter of days while TCP was facing default with Dubai traders.
Demand of high-protein feed rations is increasing in Pakistan. India is meeting full demand of 0.4 million tonnes of soymeal to mixers of cotton and rapeseed meals to augment the nutrition content of livestock in that country. Imports of soymeal from Argentina and US would be prohibitively costly.
At the end of December 2010, India faced supply constraints of onion. The only country that could immediately fill the supply-demand gap was Pakistan. Indian PSUs imported onion via sea route at prices around $700 per tonne cif. It was an opportunity and advantage for Pakistan for non-conventional items, even though for a small value. Had Pakistan permitted import of onion via land route, values would have been much larger.
Despite apparent political confrontations between the two countries, this invisible trade competition and cooperation goes on unseen and unnoticed.
You are right. If we impose sanctions on Pakistan it would be more effective and that would mean taking action to hurt their economy. What happens to Tamasha crowd. They will go into gyratics and pyrotecnics. Pakis need not do it , our crowd would do it Afterall as Bansal says it is Mobocracy.Jhujar wrote:India has the capability to reduce both textile and Agro export of Puckiland . But lacks the political will to exercise this option. Congress have adopted Pakistan within and outside Attari.
RajeshA wrote:chanaakya ji,
it would be a good idea to make some film on the working conditions of the workers in Pakistan in the textile sector, showing mostly the slavery that is going on there, and then showing the film in the major export markets of Pakistan - Europe, USA, ...
And then one should encourage people in the West not to import Paki products.
Unless of course one at the same time makes documentaries on the lavish palaces of the feudals in Pakistan. The feudals in Pakistan would love to contribute, I am sure!chaanakya wrote:RajeshA wrote:chanaakya ji,
it would be a good idea to make some film on the working conditions of the workers in Pakistan in the textile sector, showing mostly the slavery that is going on there, and then showing the film in the major export markets of Pakistan - Europe, USA, ...
And then one should encourage people in the West not to import Paki products.
It has been tried on Indian Carpet Industry. It works and It would work in case of Pakistan but for the begging status of Pakistan which makes western people sympathise with them.
After Daniel Pearl beheading which Journo in West has the courage to do that??RajeshA wrote:
Unless of course one at the same time makes documentaries on the lavish palaces of the feudals in Pakistan. The feudals in Pakistan would love to contribute, I am sure!
Actually I think there are still many Western journalists willing to do this. It is also an almost risk-free undertaking which involves the feudals inviting and hosting those journalists. But if it is deemed risky, it can always be outsourced to some Paki in UK or elsewhere.chaanakya wrote:After Daniel Pearl beheading which Journo in West has the courage to do that??RajeshA wrote:
Unless of course one at the same time makes documentaries on the lavish palaces of the feudals in Pakistan. The feudals in Pakistan would love to contribute, I am sure!