Pakistani Economic Stress Watch

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jamwal
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Re: Pakistani Economic Stress Watch

Postby jamwal » 11 Feb 2021 22:48

Chinese have already been involved in regime changes in Seychelles, Mauritius and Myanmar. It's not wise to underestimate them. For weak and unstable states like most of Africa and island nations, all it takes is a few local contacts and some money. With decline of US, UK and what seems to be growing disinterest of France, there are many nations which are very susceptible to Chinese influence including a few important ones like Madagascar.

Are there any figures about electricity generation, consumption and billing in Pakistan?

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Re: Pakistani Economic Stress Watch

Postby Vips » 12 Feb 2021 05:13

In Pakistan after circular debt in the power sector, now welcome to circular debt in the Gas sector. Already at Rs 600 Billion and growing :rotfl:

Alhamdulillah, Masha-allah, Subahnallah :mrgreen:


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Re: Pakistani Economic Stress Watch

Postby Rishirishi » 12 Feb 2021 05:35

Bart S wrote:
Deans wrote:What can China do if a BRI country simply refuses to pay ? Unlike the US, they don't have the means to do regime change. Any country defaulting will have a domino effect with the dictator/strongman in neighboring countries also refusing to pay up. Non payment would also greatly improve the popularity of otherwise unpopular leaders.


That would work for a somewhat normal country like SL etc provided that they have good relations with another large country/bloc like India or US who can back them up.

Pakistanis however have burned all their bridges and crawled deep up the CCP-occupied Hanland's backside. Unless the Americans decide to forget the last 30 years and take them back to the era of Zia and the Afghan Jihad, they have nowhere else to turn. They have pissed of the gulf states who were their true benefactors and have nowhere else to turn. Pakistan without China supporting them will be worse off than a NK without China.


Well look at it this way. They have got China to build billions of dollars of infrastructure. As usual they are not going to pay, as they do not have the money. Interestingly Pakistan has made it impossible to build the entire stretch from Gwadar to China road. This is because even the Pakistanis know that once the road is build, Chinas interest in TSP will grow exponentially. So they are just enjoying the investments as long as they can. Finally one day they are going to cut a deal with US or maybe even India, and say tata bye bye to China. US and India will be happy to oblige. China can do nothing. Their border with Pakistan is very difficult to invade. TSP will have got power plants, rail roads and great highway for free. I cheked out the roads on youtue. They are pretty good. Better then the ones in India. :oops:

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Re: Pakistani Economic Stress Watch

Postby chetak » 12 Feb 2021 06:26

Rishirishi wrote:
Bart S wrote:
That would work for a somewhat normal country like SL etc provided that they have good relations with another large country/bloc like India or US who can back them up.

Pakistanis however have burned all their bridges and crawled deep up the CCP-occupied Hanland's backside. Unless the Americans decide to forget the last 30 years and take them back to the era of Zia and the Afghan Jihad, they have nowhere else to turn. They have pissed of the gulf states who were their true benefactors and have nowhere else to turn. Pakistan without China supporting them will be worse off than a NK without China.


Well look at it this way. They have got China to build billions of dollars of infrastructure. As usual they are not going to pay, as they do not have the money. Interestingly Pakistan has made it impossible to build the entire stretch from Gwadar to China road. This is because even the Pakistanis know that once the road is build, Chinas interest in TSP will grow exponentially. So they are just enjoying the investments as long as they can. Finally one day they are going to cut a deal with US or maybe even India, and say tata bye bye to China. US and India will be happy to oblige. China can do nothing. Their border with Pakistan is very difficult to invade. TSP will have got power plants, rail roads and great highway for free. I cheked out the roads on youtue. They are pretty good. Better then the ones in India. :oops:


the paki airforce is at the mercy of the hans and the paki jernails have gotten used to the han largesse in the form of "gifts".

a lot of their "paki" made missiles have han fingerprints on them

the pakis are skating on very thin ice both financially and security wise.

without the hans backing them, their false bravado in afpak will have no bite to it and they will wind up selling nuke tech to both the eyeranians and the turkis, incurring the wrath of the saudis, gelf and the amerikis and most of the paki jobs in the gelf will also dry up

IMF and world bank and all rating agencies won't even give them the time of day

if push came to shove, the hans will make sure to drag the pakis through every court of arbitration, because if the pakis default on cheeni payments without consequences, it will open the floodgates of many other debt trapped countries.

moreover, such a major hit on the CPEC/OBOR front may well cost xi his neck and also many heads in the Central Committee of the Communist Party of China (CCCPC), other top leaders of the Chinese Communist Party (CCP) and bankers of CPEC lending banks, loss of thousands upon thousands of cheeni jobs and major internal unrest.

BTW, if the hans (an acknowledged soooper power, UN security council member and international bad boy), quietly and unofficially, blockade all the paki ports economically, who will come to the aid of such a rotten, disease ridden, duplicitious, and jehadi country :mrgreen:

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Re: Pakistani Economic Stress Watch

Postby Lisa » 12 Feb 2021 19:31

Aldonkar wrote:
Lisa, I don't know if you keep in touch with folk in Kenya. I am still in touch with one or two people that I went to school with and am informed that the new Chinese Railway peters out in a village west of Nakuru. I does not go as far as Kisumu or further west to Uganda. It is thus not optimal for servicing any market except Kenya though the Guardian article states it is meant to service markets in central Africa. In Kenya it is called the Railway to Nowhere.

There is a proposal to extend it to Kisumu and beyond to Uganda but the Kenya Gov. seems to have wised up and will not sign the contract, which is presumably similar to the one for the existing stretch.


We remain in touch with people from Kenya who are for the greater part completely out of touch. Rarely have I met anyone from Kenya who does not believe that their streets are shortly to be payed in gold! Corruption remains endemic and when I conversed with an individual who was familiar with chinese investments and had easy access to State House (the presidents office) and asked what plan there was of how to repay these loans I was bluntly told that that that matter was for the next government, i.e. I have taken my share, screw the next bunch!

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Re: Pakistani Economic Stress Watch

Postby Lisa » 12 Feb 2021 20:19

Deans wrote:What can China do if a BRI country simply refuses to pay ? Unlike the US, they don't have the means to do regime change. Any country defaulting will have a domino effect with the dictator/strongman in neighboring countries also refusing to pay up. Non payment would also greatly improve the popularity of otherwise unpopular leaders.


I wrote this over 2 years ago,

"Let's say the Chinese court rules against the borrower. How will they enforce the ruling? To the best of my knowledge, China is not a member to the Paris Club, correct? IMHO, the contract is not worth the paper on which it is written as China lacks the ability to enforce its will for it lacks the internationality necessary for enforcement."

and also

"Default is a great deal more common than most people think. Nobody files for bankruptcy and nobody seizes assets in lieu of sovereign debt in the common understanding of seizure. Debt ends up being restructured and if not so, lenders stop lending. That's all.

The Chinese are and will remain toothless as they are not yet members of the Club that can enforce market exclusion to a default nation. Only the West can and does.

You may wish to read the following,

https://en.wikipedia.org/wiki/List_of_s ... ebt_crises

https://en.wikipedia.org/wiki/Sovereign_default "

Furthermore, regime change cannot make you pay if you have no money. Simple.

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Re: Pakistani Economic Stress Watch

Postby manjgu » 12 Feb 2021 20:40

@Lisa..i think u r barking up the wrong tree. I dont think chini are interested in recovering money. they want ownership of pakistani resources/infra in lieu of debt. Dont the chini know about Paki economic condition and yet they are investing/lending. the kind of control now chini have over Paki is beyond our understanding. if chini withdraw their support, Pakistan will collapse in a day.

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Re: Pakistani Economic Stress Watch

Postby Ambar » 12 Feb 2021 21:02

How will they control the resources and infrastructure ? China is deploying its excess reserves (monetary, infrastructure capacity and human) in sketchy countries hoping to gain permanent influence there. Either they are too egoistic to realize there is no ways for them to force those countries to pay their debt or they have some chanakian strategy which escapes me.

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Re: Pakistani Economic Stress Watch

Postby manjgu » 12 Feb 2021 21:29

how did chini gain control of SL port? How did the British control the resources/infra of India? it has already deployed quite a bit of monetary, human resources in pakistan ..CPEC is the crown jewel of the BRI ... in years to come they will extract their pound of flesh. and some of the moves are for strategic reasons not merely economic as china seeks to impose its will across the world.

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Re: Pakistani Economic Stress Watch

Postby Bart S » 12 Feb 2021 21:36

^This will ensure that the Chinese, in the words of their own saying 'live in interesting times'. The Pakis will not hand over infrastructure that easily, and it will easily lead to some tensions and security situation between various factions (Chinese vs Paki, Paki vs Paki etc) and provides a nice environment for India, US or even Saudi/UAE/Iran/Afghan to dabble a bit to make things more 'interesting'.
Last edited by Bart S on 12 Feb 2021 21:36, edited 1 time in total.

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Re: Pakistani Economic Stress Watch

Postby manjgu » 12 Feb 2021 21:36

i dont buy the story that CPEC is answer to the Malacca dilemma.. the amount of trade one can carry on a road which is open 6 months a year in a area which is far away from their economic centres is piddly compared to what can be carried by sea. THe chinese have purposely put their footprint in countries which are corrupt, poor .. bribe the politicians... build expensive projects ( knowing fully well that countries cant repay)... and then force the countries to part with land/infra in lieu of repayments. So to look at the china model purely in economic terms is not correct.. their is a strategic angle to it as well in terms of well positioned ports/harbours/ control of mining/ land for agriculture/set up industries. it is chankian ..no doubt. to the pakis they have sold old power plants/ employed their labour/work force ...

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Re: Pakistani Economic Stress Watch

Postby manjgu » 12 Feb 2021 21:38

Bart S.. true.. to think that chinese script will go as planned will also be not be correct. there will be hiccups and provide us with moments / oppurtunities. the chinese script was the india will join CPEC and open a trade route ..but did not happen.

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Re: Pakistani Economic Stress Watch

Postby Ambar » 12 Feb 2021 21:39

The Britain example is pertinent because when East India co. entered India as a private enterprise, they came with their own private army. Sooner or later China will also have to put boots on the ground if they want to physically control the infrastructure projects they have bankrolled in violent banana republics. I hope they are dumb enough to fall into that quagmire.

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Re: Pakistani Economic Stress Watch

Postby manjgu » 12 Feb 2021 21:54

CPEC is the crown jewel of BRI..in terms of magnitude of investments / strategic physical location of pakistan.. with it China seeks to co opt India ( which failed)..subdue ( which also failed) .. gain a foothold in pakistan ( which it has)... slowly control pakistan ( which it will sooner or later).. have a say in Afghanistan ( still unsure). In pakistan case, it will be Pak Army which will do the job IMHO. in far away african countries could be PLA or some local tribe bankrolled for the dirty work.

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Re: Pakistani Economic Stress Watch

Postby hnair » 12 Feb 2021 22:49

We got to keep in mind that the cost for what used to take a well trained army to knock down a ruling militia in a third world country has gone up exponentially since Frederick Foresythe’s times.

- As US found out, even bush wars of the likes of Afghanistan or post-Saddam Levant runs into 100s of billions with questionable outcomes. This despite the fact that US has build up a very efficient military logistics and deployment infrastructure and it has capable allies which it sells its first line weapons, thereby spreading some of the costs of maintaining an expeditionary posture. China has neither 100s of billions of OPEX for a war nor deep pocketed allies who can absorb some of the costs. For even US, Trump’s angry rhetoric on NATO shows even the allied help is not helping the US maintain its bottom line. China does not have a single military ally with deep pockets like europeans or japan/soko/australia. Even in gulf, they have allies from israel to saudis with good infra. Still they are gasping over there.

- China can’t do what US cannot do nowadays: carpet bombing civilians or civil administration into submission. Thanks to the competitive nature of information warfare, it is difficult to do business like it used to be done till end of Soviet war in Afghanistan. China can’t do in Pakistan or Africa, what it does inside its own occupied regions like Tibet or Xinjiang

- From China, the Pakis are not getting the things their elite wants the most: a sense of being “part of the management” via MUNNA type status, which gives them sops like prime airtime in global channels to bloviate on Casmir, only Islamic nucular power, ENMO etc. And Dim’s kids or other jernail kids are not exactly reaching for that application to join Tsingtao University. That is because the Chinese elites themselves are in competition with the RAPE for a lot of these western trappings of coolness.

Summary: a long distance bushwar or regime change by military is not easy for China. The economics and alliance mathematics of it is currently beyond their means, or by now the Wolf Warrior would have been a documentary, instead of empty jerkoffs. Only option is buying off top leadership/despot and hope s/he behaves. They did that in Maldives and is currently doing it in Lanka. But pakis have furiously signaled to the new US administration that they are ready for round3 GUBO

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Re: Pakistani Economic Stress Watch

Postby Lisa » 12 Feb 2021 22:50

The pukis are a reliable failure in all facets of life. In 2016 I said,

"CPEC is a bluff. It is not viable because pukistan does not have the ability to provide the security for it nor the economic structures or infrastructure to absorb the investments. Put aside for the moment that as an Indian you may have some bias in how you think and ask yourself that in this large world, if you wanted to invest $40 Billion, would you think of investing it in pukistan? What sort of return would you have an expectation of and how secure do you think your investments would be. Other than building tarmac roads which the pukistanis can't steal what else is secure?"

We are there today. All these chinese investment are going to fail and they have NO ability to recover ANY of them. Short of military occupation to force a restructuring of the pukis nothing can now save the chinese. Lets invest in popcorn whilst we see how this pans out.

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Re: Pakistani Economic Stress Watch

Postby Bart S » 13 Feb 2021 00:10

manjgu wrote:CPEC is the crown jewel of BRI..in terms of magnitude of investments / strategic physical location of pakistan.. with it China seeks to co opt India ( which failed)..subdue ( which also failed) .. gain a foothold in pakistan ( which it has)... slowly control pakistan ( which it will sooner or later).. have a say in Afghanistan ( still unsure). In pakistan case, it will be Pak Army which will do the job IMHO. in far away african countries could be PLA or some local tribe bankrolled for the dirty work.



Actually there is a huge difference between CEPC on PPT and CPEC on the ground. The much hyped 'CPEC as part of BRI connectivity' is mostly hot air and Paki propaganda. In reality apart from both ends (Gwadar which is partly developed, and Gilgit Baltistan where there is a good quality road through the high altitude passes) there is very little in terms of actual connectivity infrastructure deployed and what was pending has also now stalled. Instead, if you look at the details most of the investment in CPEC has gone into overpriced coal-based power plants with electricity generation rates that are typically inflated by 20-40% over neighboring countries and that use low-quality Chinese made equipment and processes that are not eco-friendly. And those power plants have guarantees that the Pakistan government will buy the electricity at the inflated price.

Also, the Pak army is a strange animal, claims to be pro-China and anti-US etc but in reality every general and his dog is settled in the west and their RAPE kids are studying in western universities. There is a limit to how much of the Chinese govt's bidding they can do, especially in domestically fighting their own people (on behalf of China).
Last edited by Bart S on 13 Feb 2021 00:14, edited 1 time in total.

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Re: Pakistani Economic Stress Watch

Postby Bart S » 13 Feb 2021 00:13

Lisa wrote:The pukis are a reliable failure in all facets of life. In 2016 I said,

"CPEC is a bluff. It is not viable because pukistan does not have the ability to provide the security for it nor the economic structures or infrastructure to absorb the investments. Put aside for the moment that as an Indian you may have some bias in how you think and ask yourself that in this large world, if you wanted to invest $40 Billion, would you think of investing it in pukistan? What sort of return would you have an expectation of and how secure do you think your investments would be. Other than building tarmac roads which the pukistanis can't steal what else is secure?"

We are there today. All these chinese investment are going to fail and they have NO ability to recover ANY of them. Short of military occupation to force a restructuring of the pukis nothing can now save the chinese. Lets invest in popcorn whilst we see how this pans out.


Both the Chinese and the Pakistanis are trying to cheat and rip off each other while talking about sweeter than honey and taller than Himalayas relationship and other such bullshit. The only chance that CPEC had was if they found another sucker that they could jointly con, and since India under Modi is not falling for it, and the Saudis/UAE rulers were rubbed the wrong way by Dimran, they are on their own and it's going to be a slow-moving train wreck.

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Re: Pakistani Economic Stress Watch

Postby manjgu » 13 Feb 2021 09:57

The chinese surely knew that the SL port/airport cant generate so much revenue when they invested or even the nigerian railway ( and yet they bribed the politicians of the day ? a double whammy ... do u think the chinese are so dumb) ... the motives were not purely financial. First trap corrupt countries in a debt trap and then use them to further chinese political, military , economic influence. I think BartS is right ..both are trying to cheat each other and we will have to wait/see how it pans out..enjoy the popcorn.

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Re: Pakistani Economic Stress Watch

Postby manjgu » 13 Feb 2021 10:03

the chinese ways are subtle not the slam bang all guns blazing US way.. chinese rely on bribing/honey trapping/working silently and influencing key people in political circles /academia /media /industry/ military / insurgent groups and working thru them to expand their footprint across the world. they know their limitations and this is their way of working. they are investing in poor corrupt countries knowing fully well their investments will not be repayed ( how can they be if in the first place the political leadership approved unviable projects only because they were bribed?).

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Re: Pakistani Economic Stress Watch

Postby Kashi » 13 Feb 2021 16:58

manjgu wrote:the chinese ways are subtle


Hardly. If anything they are entirely opposite. The thing is, there's a lot of bombast in their own media and their neighbourhood. Just ask the Taiwanese, Japanese and the Koreans, who can actually read and understand the language and various outbursts, PRC are increasingly belligerent.

Do take note of recent forays into Japanese and Korean territorial waters, including NoKo's.

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Re: Pakistani Economic Stress Watch

Postby Lisa » 13 Feb 2021 17:05

The question still remains. When a recipient of a loan from the Paris Club defaults, negotiation are held to work out how the debt can be resolved, either by way of rescheduling or forgiveness. If an agreement cannot be reached the only penalty available is that the Club will stop lending to the said country. This is how this system works.

Please note, no use of force, no regime change, no occupation, no seizure of assets etc....

eg,

https://www.bbc.co.uk/news/business-27616255

Nobody so far has articulated what EXACTLY the chinese will do if Sri Lanka defaults other than speculate. Does anyone care to try with a step by step answer.

I personally believe that they can do nothing, much as has already happened in Kenya in that the entire event has been declared illegal by the local courts and there is nothing the chinese can do other than attempting to physically start removing the railway tracks.

https://www.globalconstructionreview.co ... otiation-/

https://www.reuters.com/article/uk-keny ... SKBN29P1A3

Anyone care to try?

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Re: Pakistani Economic Stress Watch

Postby Bart S » 13 Feb 2021 17:51

^All that is correct, but you are looking at it from just one angle.

The nature of the debtor (in this case Pakistan) makes a huge difference and affects what kind of coercion the lender can bring upon them. Pakistan is a nation that lives on aid and borrowings and is occupied by the Pakistani military that uses these funding methods to bankroll it's shenanigans. Their funding from the Gulf and West is drying up, the IMF funding comes with strict terms, and the only remaining lender is China.

The fact that the Paki army (rather than a legitimate govt) controls and occupies the country means that they will also not take the most rational decisions in the interest of the country, and will rather do whatever the Army needs to survive and get funded. Pakistan and more importantly the Pakistani army depends on China for a lot of stuff like UNSC veto, protection of Paki army sponsored terrorists, nukes, missiles, most of their military hardware etc. Unless they can find another sponsor to replace China, losing Chinese support means the end of their influence and control. Their approach to rent-seeking can be summarized as a> use blackmail (Afghan situation and the scary situation of a failed state with nuclear weapons) to extort money from the West b> play the Islam angle and do dirty jobs to get some money from the Arabs and c> tom-tom the 'sweeter than honey strategic partnership' with China to get dubious investment and loans from the Chinese. The first two are not paying dividends anymore an they are left with just the Chinese.

Pakistan's being a Ponzi scheme now overshadows it's being a debtor. It's bound to come crashing down at some point, but at this moment they have no incentive to turn either stop borrowing, or to tell debtors to take a hike.

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Re: Pakistani Economic Stress Watch

Postby Lisa » 13 Feb 2021 18:15

^ I agree with all you say but am asking for sight of matters further ahead. Does anyone have an opinion of how a default would play out?

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Re: Pakistani Economic Stress Watch

Postby manjgu » 13 Feb 2021 20:26

Lisa good question. how a default would play out. That would depend on lot of factors : physical proximity of defaulting country to china, amount of default, kind of interest/pressure point available to china wrt country ( financial, strategic, political). SL .. they paid the debt with lease of 100 yrs of the port ( strategic).. Malaysia backed out of projects by paying a penalty ( financial). I dont know specifically the facts of the rail wrt Nigeria ( amount of debt), if china has any pressure points wrt Nigeria. its a calculated gamble that chini are taking to expand their footprint... some of their investments may result in loss as well.

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Re: Pakistani Economic Stress Watch

Postby Aditya_V » 14 Feb 2021 07:58

China are no fools, countries like Nigeria have wood Oil and minerals, Chinese will take these at friendly prices with Chinese shipping and transport, they get to control the entire supply chain, they will control Sri Lankan ports, what goods to store, whether Raw materials or finihed goods. Again entire supply chain. Pakis want to control to keep India busy. Pakistan only use is an anti Indian state and keep pushing IndiaIndia-Pakistan hyphenation .

China nor the borrowing country will ever openly say default, it is how the British and East India company empire ran, see the famines in India at that time. Control the incompetent elite to act as per the external forces wishes in perpetuity.

Any land will have something, wood from trees, Agricultural crops, some mineral deposits, coal or anything, always useful to keep control on the entire supply chain. Labour costs play the least role in manufacturing, a unified coordinated stable workforce with good supply chain transport infrastructure, adequate power supply cheap raw materials as compared with the competition through out the supply chain, adequate machinery are all required, China knows this wants to control all these countries. Most countries rulers are nothing but Political Vassals today in control of key decision makers.

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Re: Pakistani Economic Stress Watch

Postby kit » 14 Feb 2021 08:47

For CPEC to work ., it needs India. The Chinese are playing the long game here, this is not for immediate benefit.

THE CHINESE - INDIAN CONGRESS PARTY MOU has been specific in India getting onto the CPEC bus , with some noises in "rapprochement " with no real or tangible gains. As a matter of fact selling the country to the Chinese.

It is not Pakistan but India that is the target.

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Re: Pakistani Economic Stress Watch

Postby CalvinH » 15 Feb 2021 02:23

Pakis are special case. Their Military would be soon completely dependent on Chinese to maintain their edge against India and would be total hostage to Chinese. Plus its a country of sellouts. Sellouts everywhere who can be bought cheap. Its easy for Chinese to run the country like a puppet.

Chinese are not looking for the whole country to rule or dominate but small parcels where they can carve out little Chinas. These islands of land would be supplied by reliable power, cheap local resources and will be well connected to closest global supply chain points. Chinese will be free to exploit local resources in these islands be it polluting the land or using local labor as they fit. Eventually there would be PLA boots on the ground too but before that they will pay some local militia or friendly military to do the job for them.

Chinese would relocate their manufacturing to these islands and will use it to keep their cheap manufacturing advantage.

The contracts terms were kept secret. Even from the Paki Parliament. Why would a lender do that if it sees a risk of default and want to build a term for that.

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Re: Pakistani Economic Stress Watch

Postby vera_k » 15 Feb 2021 06:45

Indeed, Pakistan can provide a huge labor pool either located within Pakistan or imported into China. No wonder that China is trying out re-education programs for Muslims in Xinjiang. The same template will eventually be extended to Pakistan to monetize the human resources available in Pakistan.

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Re: Pakistani Economic Stress Watch

Postby sudarshan » 15 Feb 2021 07:08

It seems the Bunglers now have a bigger nominal GDP than the Pakis. Has this been noted?

https://en.wikipedia.org/wiki/List_of_c ... P_(nominal)

Bangladesh has a population of ~160 million, Pak supposedly 220 million (probably closer to 300 million). This would make Bangladesh between 30% to 100% higher per-capita-wise.

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Re: Pakistani Economic Stress Watch

Postby manjgu » 15 Feb 2021 08:37

CalvinH wrote:Pakis are special case. Their Military would be soon completely dependent on Chinese to maintain their edge against India and would be total hostage to Chinese. Plus its a country of sellouts. Sellouts everywhere who can be bought cheap. Its easy for Chinese to run the country like a puppet.

Chinese are not looking for the whole country to rule or dominate but small parcels where they can carve out little Chinas. These islands of land would be supplied by reliable power, cheap local resources and will be well connected to closest global supply chain points. Chinese will be free to exploit local resources in these islands be it polluting the land or using local labor as they fit. Eventually there would be PLA boots on the ground too but before that they will pay some local militia or friendly military to do the job for them.

Chinese would relocate their manufacturing to these islands and will use it to keep their cheap manufacturing advantage.

The contracts terms were kept secret. Even from the Paki Parliament. Why would a lender do that if it sees a risk of default and want to build a term for that.


Correct . Was reading Natl Geog where chinese in some african countries have almost captured agriculture.. local africans have sold their lands to chinese and are working as labour in their own fields. the labour said their white masters were better than chinese ! In pakistan case its not risk of default but certain default.. how can a project which is overpriced atleast 2.5X be financially viable. a expensive road to nowhere.. old power plants producing expensive electricity... some industrial parks which produce nothing !! dont the chinese know the state of Pakistan economy as they invest dollars ?

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Re: Pakistani Economic Stress Watch

Postby disha » 18 Feb 2021 02:22

This is indeed sad news. We asked Cheencans to leave Galwan/Pangong Tso etc. Here they seem to be leaving Pakistan itself in a hurry!

https://thediplomat.com/2021/02/what-happened-to-the-china-pakistan-economic-corridor/

In Pakistan’s case, CPEC has continually been discussed ever since its announcement back in 2015, despite the fact that there has not been a major development in years. The lack of progress has led to numerous reports about CPEC being at a near standstill in the country. A case in point is a recent Bloomberg video report on CPEC as an example of “how China’s flagship Belt and Road project stalled out.”


And

some independent analysts in Islamabad are of the view that the CPEC authority will shift the related projects once for all from the hands of the civilian government to military authorities in Pakistan.


And on another note: https://www.ft.com/content/9eaad504-fc01-4158-9f69-a7336dc8598e

The Asian Development Bank (ADB) has said it expects Pakistan’s economy to grow 2 per cent this year after a contraction in 2020.


The population growth rate per year of Pakistan is higher than above. Pakistan per capita is falling and at one point it will fall like stone. IMF or no IMF.

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Re: Pakistani Economic Stress Watch

Postby Suraj » 23 Feb 2021 10:00

Economic factoid of the day:
Pakistan annual budget : PKR 7.13 trillion or $45 billion
State of Uttar Pradesh budget: INR 550270 cr or $76 billion
State of Maharashtra budget: INR 404800 cr or $56 billion
State of Tamil Nadu budget: INR 300390 cr or $42 billion

Others likely to overtake Pakistan soon: West Bengal, Karnataka - both approx 250000 cr budgets.

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Re: Pakistani Economic Stress Watch

Postby sanjaykumar » 23 Feb 2021 10:45

:D

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Re: Pakistani Economic Stress Watch

Postby disha » 23 Feb 2021 11:35

^That shows the TFTA Pakistan budget of @7.2 trillion is 72x more than the 42 billion budget of SDRE TN.

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Re: Pakistani Economic Stress Watch

Postby Aditya_V » 23 Feb 2021 20:11

These calculations would look much better rather if the Paki ruppee which has risen to 158.8 to USd hits a more natural 200 to the SD mainly due to food shortages.

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Re: Pakistani Economic Stress Watch

Postby saip » 23 Feb 2021 21:05

India's defense budget is $49.6 exceeding Paki's total budget by $4.6 billion. They must be feeding the people grass while feeding cakes to the Army.

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Re: Pakistani Economic Stress Watch

Postby dhyana » 24 Feb 2021 14:20

Chinese power loans fueling a debt trap in Pakistan

Pakistan is the latest nation struggling to repay Chinese loans extended under the Belt and Road Initiative, with indications emerging that Islamabad will soon seek to reschedule as much as $22 billion in outstanding power sector credits.

The wind, coal, solar and thermal power plant loans have consumed almost half of the outlays of the Beijing-backed US$60 billion China-Pakistan Economic Corridor (CPEC) scheme, which seeks to improve the latter’s infrastructure and facilitate more bilateral trade, among other geostrategic objectives.


In those discussions, the Pakistani delegation noted that the previous government entered into guaranteed power purchase agreements with Chinese companies on what are now perceived as onerous terms, including fixed and high power purchase rates.

The Chinese side has so far not budged on a possible debt reduction deal, with the CPEC official saying the relevant Chinese authorities have not communicated with him on the issue in the last ten months.


Pakistan’s total power generation capacity hit 37,402 MW in 2020, outproducing the nation’s total demand of 25,000 MW in summer months and 15,000 MW in the winter.

Moreover, Pakistan’s transmission and distribution capacity is not sufficient to keep pace with the bulk of power supply and currently stalls out at approximately 22,000 MW. That, reports say, has left over 15,000 MW of power unused in the summer and 22,000 MW in the winter.


The concept of matching supply, demand and transmission capacity would seem like basic due diligence 101 for a power generation infrastructure loan. Who was smoking what in agreeing to these terms?

Excess capacity payments made by the government to IPPs have swelled year on year, rising from 185 billion rupees ($1.15 billion) in 2013, 468 billion ($2.92 billion) in 2018, 642 billion rupees ($4 billion) in 2019, to 860 billion rupees ($5.4 billion) in 2020.


Not sure if it is just gross incompetence, bribery or other outright fraud that is responsible for this mess- may be a combination of all three? The sheer stupidity in agreeing to all these wasteful CPEC projects is mind-boggling. Perhaps they will eat grass before this is all over.

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Re: Pakistani Economic Stress Watch

Postby Aditya_V » 24 Feb 2021 14:28

Not really, China cannot enforce debt from its own Munna, now Pakistan has the power plants and solved its power crises, all paid by China.

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Re: Pakistani Economic Stress Watch

Postby dhyana » 24 Feb 2021 14:33

Then, in a way, the Pakis are the puppet master here? I cannot imagine the CCP just walking away from billions in investment- they seem too mercantilist in nature. May be they already have what they want in Gwadar, etc.?


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