Pakistani Economic Stress Watch

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Mollick.R
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Re: Pakistani Economic Stress Watch

Post by Mollick.R »

Honda closes its plant in Pakistan due to financial crunch

ANI Last Updated: Mar 09, 2023, 07:57 AM IST

Amid the ongoing financial crunch in Pakistan, another car maker company Honda on Wednesday announced to close its plant citing severe disruption in supply chain as major reason, reported Geo News.

Honda Atlas Cars --the assembler of Honda automobiles in the country blamed current economic situation for its decision and said that the plant will remain closed from March 9 to 31.

The car maker company said that it would not be able to continue with its production and will be shutting down its plant for the remainder of the month.

The automaker, in a notice sent to the Pakistan Stock Exchange, said that the decision has been taken as the company's supply chain has been "severely disrupted," reported Geo News.

"Considering the current economic situation of Pakistan whereby the government resorted to stringent measures including restricting the opening of LCs (letter of credits) for import of CKD (completely knocked-down) kits, raw materials and halting foreign payments, the company's supply chain has also been severely disrupted by such measures," the company said highlighting all the reasons for the plant shutdown.

Consequently, it said that the company "is not in a position to continue with its production and ultimately has to shut down its plant from March 9 to March 31."

Earlier, Pak Sukuzi Motor Company (PSMC) and Indus Motor Company (IMC), the assembler of Toyota-brand automobiles in Pakistan, also announced to completely shut down its production plant.

Pakistan's auto industry, which is heavily dependent on imports, has been caught in the midst of an exchange-rate crisis, as the SBP, after unabated rupee depreciation, imposed restrictions on the opening of Letters of Credit (LCs), reported Geo News.

Pakistan's economic growth is slowing as one of the highest inflation rates -- and higher borrowing costs -- erodes demand and a plunge in the rupee makes the import of key automobile parts more expensive.

The auto sector remains engulfed in various crises, with a number of automakers announcing complete or partial shutdowns in recent months citing various reasons including reduced demand in the market and the company's inability to maintain inventory as companies struggle to secure LCs.

The industry is also hit by import restrictions the coalition government had introduced to control the trade deficit, reported Geo News. Not only the production activity has affected the companies also raised the prices of their CKD models which dented people's already low purchasing power. The country remains short of much-needed dollars to meet its import and other external payment commitments. The central bank's foreign exchange reserves stand at just over USD 3.8 billion, barely enough for a month of essential imports.

However, they are due to get a boost as a loan inflow from the Industrial and Commercial Bank of China (ICBC) makes its way to the State Bank of Pakistan's forex reserves, reported Geo News.

Meanwhile, the government is constantly trying to woo the International Monetary Fund (IMF) to revive the stalled Extended Fund Facility (EFF) programme, which if approved by its board would release a funding tranche of over USD 1 billion.

Read Full News from Here// ET Link

https://economictimes.indiatimes.com/ne ... content=23
Manish_P
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

^ Actually sir this was fairly common among auto makers in Pakistan over the years.

It is only now that it has become a regular monthly/fortnightly affair.

Lack of money to get in the parts, immediate temp laying off of the workers.

New funds come in (loans), next batch of SKD or CKD kits/parts are ordered, the assembly line starts up again, the workers are hired back.

Most of the automobile assembly line workers in Bakistan have been doing multiple jobs over the past many years now - repair mechanics, electricians (although that is also allah-barose now), plumbers, thela-wallahs etc
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Re: Pakistani Economic Stress Watch

Post by Deans »

Manish_P wrote:^ Actually sir this was fairly common among auto makers in Pakistan over the years.

It is only now that it has become a regular monthly/fortnightly affair.

Lack of money to get in the parts, immediate temp laying off of the workers.

New funds come in (loans), next batch of SKD or CKD kits/parts are ordered, the assembly line starts up again, the workers are hired back.
Most of the automobile assembly line workers in Bakistan have been doing multiple jobs over the past many years now - repair mechanics, electricians (although that is also allah-barose now), plumbers, thela-wallahs etc
They have an automobile industry (albeit screwdriver-giri). The glass is half full.
Manish_P
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

Deans wrote:...

They have an automobile industry (albeit screwdriver-giri). The glass is half full.
Yes sir. Actually their auto-industry is booming now. Well two-wheelers at least.

Of course, several of these units may actually find a use as VBIEDs to go boom literally... like the one used to attack the police convoy recently.

Yawn - Pakistani bikes rev up their way to Afghan market
Afghan businessmen are importing Pakistan-assembled motorcycles in large numbers daily through the Chaman border amid booming demand for the two-wheelers in Afghanistan.

Afghan traders were importing Honda CD-70 and CG-125 bikes which enjoy a big market in Afghanistan. “In the last two and half months, around 3,000 motorcycles were imported by Afghan traders through the Chaman border,”

However, sources in Chaman said a large number of old and new motorcycles are also being sent to Afghanistan through infrequent routes.

“Despite fencing of the border with Afghanistan, people manage to cross the border at both sides,” a trader in the border town told Dawn on condition of anonymity. “Around 40 to 50 motorcycles are being sent to Afghanistan through informal channels,” he said.

Market sources said some unauthorised dealers had already lifted CG-125 motorcycles in large numbers from the authorised dealers under some kind of understanding to jointly make a windfall.
Edit - using the term booming in sarcasm onlee. Doubt the produce as many 2 wheelers in a year as we produce in a few days.
Deans
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Re: Pakistani Economic Stress Watch

Post by Deans »

Manish_P wrote:
Deans wrote:...

They have an automobile industry (albeit screwdriver-giri). The glass is half full.
Yes sir. Actually their auto-industry is booming now. Well two-wheelers at least.

Of course, several of these units may actually find a use as VBIEDs to go boom literally... like the one used to attack the police convoy recently.
There is an interesting reason for this trade.
Normally 2nd hand vehicles and spares are smuggled from Afghanistan (where Taliban imports them duty free) into a high tariff market like
Pak. The vehicle trade has mostly been one way.

When exporting vehicles from Pak to Afghanistan, the buyer pays in Afghanis (not Dollar). The Pak rupee has fallen from Rs 2 to Rs 3.2 to 1 Afghani.
So vehicles have become cheaper for Afghans paying in Afghanis. I doubt Afghanis can be freely converted into $. The exporter might use the
Afghanis to buy drugs from Afghanistan. Pak army controls the trade into Afghanistan. So Afghanistan is selling the same quantity of drugs for
an increasing number of motorbikes (built with scarce foreign exchange).
Manish_P
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

Oh. I hadn't thought of drugs as the primary barter. Maybe dryfruits and stuff like that. Even timatars (joking). But of course it has to be drugs.

I wonder if we are looking at the PKR crossing 290 this week. It's gone a bit quiet on the IMF front.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Lot of info on promised aid not reaching TSP and the reasons.
Funds worth $23b still pending
ISLAMABAD: Foreign creditors and donors have not disbursed about $23 billion worth of loans and grants to Pakistan, some dating as far back as 15 years, including a $1.6 billion grant due from the United States under the Kerry-Lugar Act.

A major chunk of the funds, what the government called the “undisbursed balance as of September 2022”, could have been received by ensuring prompt implementation of the schemes. The disbursement of some of these loans was linked to the progress on the foreign-funded projects but others were delayed due to various bureaucratic hurdles, weak implementation and the country’s relations with the donors.
According to the sources, the common factors behind such large unspent amounts were the slow process of government approvals, delays in loan negotiations, a lack of coordination between government agencies finalising procurement details, lengthy bidding processes and a lack of capacity of the executing agencies in contract management and project monitoring.
Pakistan is going from pillar to post to acquire foreign commercial loans but the official report shows some disturbing aspects about the non-disbursement of this foreign commercial loan. A foreign commercial loan worth $440 million from the Suisse AG led consortium remains undisbursed despite the closing date of the loans having lapsed from 2017 to 2022, according to the ministry’s report.

The US has not disbursed a grant worth $1.6 billion, mostly committed under the $7.5 billion Kerry Lugar Act in 2010 to help the then-civilian government. The grants had been committed in areas of rural development, social protection, democracy, energy, municipal services, and road infrastructure schemes.

Of the 42 incomplete projects, 36 have already lapsed, indicating that their development objectives could not be achieved.

The $535 million UK grant remained undisbursed despite the completion period of all the schemes having already passed many years ago. Some of these projects had begun back in 2007.

The maximum amount of $6.7 billion remained undisbursed by the World Bank, mainly because of slow progress, and also partly due to the usual long project completion durations. Pakistan failed to avail of some of the World Bank loans meant for reducing energy sector losses.

The Karachi Port Improvement project had to be closed financially by June 2018 but some amount remains pending for disbursement. Similarly, the $157 million Dasu Hydropower project, which began in 2014, should have been utilised by August 2022 but remains outstanding, showing the inefficiency of the Water and the Power Development Authority (WAPDA).

Disbursements worth $4.8 billion against the Asian Development Bank (ADB) funded project remain outstanding as of the first quarter of the current fiscal year. Some of the ADB projects also dated back to 2006-07 and their gestation periods have long been completed.

China has also not disbursed $1.4 billion in loans, including $345 million for the Karachi Nuclear Power Plants whose financial close date lapsed in June last year.

Despite the lapse of time, a sum of $244 million has not been disbursed by the European Investments Bank because Pakistan failed to show progress on three water sector projects.

The country has failed to utilise the $554 million grant from the European Union and the financial closing dates of all EU-funded projects have lapsed now. The EU had given the grants for rural development, education and health sector projects. A German grant of about $236 million for various social sector projects remained undisbursed despite a majority of the projects having lapsed. Japan has also not disbursed loans and grants worth $321 million against projects, many of which have already lapsed, according to the details released by the ministry.

Saudi Arabia has not disbursed $743 million against 18 projects, of which the period of 17 schemes have already completed.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Consumers to pay surcharge of up to Rs14.24
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has allowed power distribution companies (DISCOs) and K-Electric (KE) to recover the deferred fuel adjustment surcharge of up to Rs14.24 per unit from consumers.

Power companies will collect the surcharge in installments over eight months from March to October 2023.

They will recover Rs10.34 per unit from the protected domestic consumers using zero to 200 units per month, Rs14.24 per unit from the unprotected consumers using zero to 200 units, Rs14.24 per unit from those consuming 201 to 300 units and Rs9.90 per unit from the private agricultural consumers.

The government was required to pass on the fuel adjustment surcharge in the months of June and July 2022. However, Prime Minister Shehbaz Sharif deferred its collection.
Deans
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Re: Pakistani Economic Stress Watch

Post by Deans »

Dilbu wrote:Lot of info on promised aid not reaching TSP and the reasons.
Funds worth $23b still pending
In other words Pak army has stolen a lot of it and blamed the civilian govt for non completion of projects etc.
Manish_P
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

^ A third to politicians, a third to jernails personal accounts (buying land, franchises etc), a third towards mostly Chinese equipment (french subs, mirage upgrades)... would that be the conservative breakup?

I think the fauji abduls salaries, pensions come from the civilian budget (revenues, taxes) anyway...
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Majority of those projects, especially pre 2015 ones, are likely to be unkil's payment for GUBO. TSP will draw up some fancy project plan and unkil will nudge some agency to fund the project. As soon as the initial payment based on project plan is released the fund will be diverted for TSPA's demands and other needs. Rest of the project is never implemented and the agencies are also not going to release the rest of the money. TSP's only aim was to grab the initial release of money and this played along well as long as unkil was there in the backdrop as a guarantor. Now that fountain has dried up and unkil is not willing to prop up the munna. The Chinese do not have the clout to nudge anyone and will have to make the payment from own bank account, which is unlikely.

The promise of xx billion dollars from donors for the latest flood damage is also proposed in the form such projects where payment is linked to stage wise implementation of the project plan. So it is unlikely that TSP will be able to divert these funds to pay off their other immediate debts or to buy toys for the boyz like in the past.
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Re: Pakistani Economic Stress Watch

Post by williams »

Dilbu wrote:Majority of those projects, especially pre 2015 ones, are likely to be unkil's payment for GUBO. TSP will draw up some fancy project plan and unkil will nudge some agency to fund the project. As soon as the initial payment based on project plan is released the fund will be diverted for TSPA's demands and other needs. Rest of the project is never implemented and the agencies are also not going to release the rest of the money. TSP's only aim was to grab the initial release of money and this played along well as long as unkil was there in the backdrop as a guarantor. Now that fountain has dried up and unkil is not willing to prop up the munna. The Chinese do not have the clout to nudge anyone and will have to make the payment from own bank account, which is unlikely.

The promise of xx billion dollars from donors for the latest flood damage is also proposed in the form such projects where payment is linked to stage wise implementation of the project plan. So it is unlikely that TSP will be able to divert these funds to pay off their other immediate debts or to buy toys for the boyz like in the past.
And yet Pakis are supplying ammunition to Ukraine and would also like to buy Russian oil. In all this, some WKK wants India to normalize a bit with the Pakis. No wonder Pakis feel entitled :rotfl:
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Re: Pakistani Economic Stress Watch

Post by yensoy »

Deans wrote:
Dilbu wrote:Lot of info on promised aid not reaching TSP and the reasons.
Funds worth $23b still pending
In other words Pak army has stolen a lot of it and blamed the civilian govt for non completion of projects etc.
This is a country which doesn't know how many people it has, how many kids go to school, how much money is collected by the government and where it goes, how much wealth is owned by its top echelon of politicians and officials (crore commanders, judges...). But they know exactly how much is owed to them by the rest of the world. Laser focus on what matters, I say.

Does the list also include their promised F16 from the past? Also, many of the line items are loans - is this a call for getting more loans? They should thank their lucky stars that many of these projects didn't get funded, otherwise they would be in a deeper hole.
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Re: Pakistani Economic Stress Watch

Post by Neela »

https://www.dawn.com/news/1741742/shehb ... mrans-door
Bilawal was in NY for some Islamophobia conference. :roll:

Didnt waste the opportunity to pull out the bowl.

“The weakest, the poorest in the Pakistani society…are facing the burden of this more than anybody else, which is why we insist, and we request the international financial institutions to cooperate with Pakistan appropriately so that we could provide relief to our people,” he said.
IOW, we insist that you behave well with us so that we can get the money we are asking you :rotfl:
Reminds me of beggars who start to abuse people when they dont donate.

As the foreign minister appealed for international support at his briefing in New York, an official statement in Washington said the Biden administration has proposed to double the economic support fund to Pakistan to $82 million for fiscal year 024. The money would come from the Economic Support Fund, which provided $39 million in 2022.
$82 million looks like small change when donors start to get annoyed and simply want to give something to shut the beggar out.

Pakistan could also receive $17 million for narcotics control and law enforcement and another $3.5 million for international military education and training programmes. The US administration has also proposed $32 million to Pakistan from a global health programme
Pretty soon, you'll see numbers like $124 given for buying sanitary ware and another $5.20 for a stationeries. :rotfl:


Trip costs $1-2 million for Paki exchequer. A $82 million ( hopefully not pledges) in returns for the begging mission.
Not bad.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

The cost of the shadow economy
The informal sector’s contribution to Pakistan’s economy is remarkable as it adds a handsome volume of approximately $661 billion, tantamount to 35.6 per cent of GDP. According to the International Labour Organisation, it constitutes 75pc and 68pc of jobs in rural and urban areas; however, it is pregnant with issues like child and bonded labour, gender-based discrimination, and insecurities in the workplace.

Moreover, it embodies small and medium enterprises (SMEs) that are populated by self-employed entrepreneurs, small businesses, informal associations, and street vendors in agriculture and micro-enterprise setups, and thus, they tend to be more resilient to economic downturns. Despite its volume and contribution to the economy, the informal sector creates financial vulnerabilities for formal setups.
KSE-100 Index provided compounded annual returns of 14.55pc, and industrial profit was recorded at less than 15pc per annum. The inflation rate in 2018 was 5.08pc, and now it is above 30pc. If the inflation-adjusted returns per annum are calculated, it can be said that the real return an investor receives in the formal market and industrial setup is negative.

Pakistan already has one of the highest income tax rates in the world as far as corporations are concerned, which further depicts a decrease in the wealth of formal sector investors. Consequently, since 2013, more than 200 companies have been delisted from PSX. Only 526 companies are listed on the main board, and just three SMEs are listed on the GEM board; however, the total number of registered companies with the Securities and Exchange Commission of Pakistan now stands at 176,000.
Nevertheless, investor participation is more in informal sectors in which most of the businesses are unregistered. The Asian Development Bank (ADB) confirms that more than 90pc of the SMEs that operate in the informal sector are set up with the help of family members and friends.

These businesses generally operate in agri-business, food chain, agri-machinery, and textile sectors. Some of these raise money for seasonal products and services and wind up their business when the season ends. These setups are more visible during harvest in rural areas and in food chain industries in urban areas. They earn money by stocking up on necessities like sugar, flour, wheat, grains, oils etc.

They employ the staff on a seasonal or contractual basis and then lay them off. Furthermore, fewer salaries are paid to them compared to minimum wages in cash form without any social security i.e. health insurance and accommodation. Consequently, social and financial vulnerabilities for unemployed youth are increasing drastically, resulting in modern slavery.

Informalisation is proliferated to avoid income tax, intense documentation and regulation, which further fuels decapitalisation and insecurities in the labour market. These informal setups are backed by special interest groups of local politicians, families of bureaucrats, and land elites through a complex mix of tax laws and regulatory compliances for the formal sector.
yensoy
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Re: Pakistani Economic Stress Watch

Post by yensoy »

Dilbu wrote:The cost of the shadow economy
The informal sector’s contribution to Pakistan’s economy is remarkable as it adds a handsome volume of approximately $661 billion, tantamount to 35.6 per cent of GDP.
Sir I missed the memo. When did Paxtan become a 1.85Tr $ economy? Or is the author using some funny units?
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Re: Pakistani Economic Stress Watch

Post by Varuna »

^^ I think the author is being sly and stating the PPP numbers without explicitly mentioning it.. The 2022 estimated GDP for pakistan was $1.5 Trillion (PPP). Nominal was $376 Billion
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Re: Pakistani Economic Stress Watch

Post by Bart S »

^How is their GDP growing in US$ terms even as their currency has depreciated by a huge amount?
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Re: Pakistani Economic Stress Watch

Post by nachiket »

Bart S wrote:^How is their GDP growing in US$ terms even as their currency has depreciated by a huge amount?
Madrassa math and Sialkot statistics can achieve anything sir.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

A fliend in need is a fliend indeed.
Beijing asks for $1.5b payment
ISLAMABAD: China has expressed serious reservations about overdue payments of $1.5 billion to the Chinese independent power plants (IPPs), installed under the China-Pakistan Economic Corridor (CPEC), as well as currency exchange restrictions imposed by the State Bank of Pakistan, which hamper coal import.

Special Assistant to Prime Minister (SAPM) (Coordination) Syed Tariq Fatemi, in a letter to the Planning Commission on March 13, 2023, conveyed that China’s Charge d’ Affaires Pang Chunxue met him on Monday where she voiced concern over the CPEC power projects.

“Overdue payments to the Chinese IPPs currently stand at $1.5 billion. This is causing huge concern among Chinese businesses,” Fatemi stressed, adding that Pang also complained that Chinese power plants at Hub, Sahiwal and Port Qasim were facing currency exchange restrictions, which was causing difficulty in coal import.
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

^ This is too much stress for the Pakis who are victims of the War on terror, the orphans of climate change, the step-child of COVID ityaadi..

Instead of the Chinese forcing poor Pakistan to collect money from the IMF and the IMF forcing them to get the Chinese to waive off the debts, the IMF and the Chinese should directly talk to each other.

Pakistan needs a visionary, globally recognised statesman like the great Captain to mediate between the two and bring them to the square table to stop this going round and round business.
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Re: Pakistani Economic Stress Watch

Post by g.sarkar »

https://www.firstpost.com/world/pakista ... 97012.html
Pakistan: Over 40,000 tons of wheat stolen by dozens of govt officers from warehouses
The wheat -- almost 40,392 tons -- was stolen from government warehouses located across 10 districts in Pakistan, with the connivance of the Sindh Food Department staff. Pakistan recently imported wheat from Russia amid food crisis
Sandeep Sharma, March 15, 2023

Islamabad: At least 67 senior government officials have been suspended and issued show-cause notices for stealing over 40,000 tons of wheat worth billions of rupees in Pakistan’s Sindh province.
This comes at a time when the nation is facing a severe food shortage owing to the deadly floods which wreaked hovoc in Pakistan last year.
The wheat — almost 40,392 tons — was stolen from government warehouses located across 10 districts, with the connivance of the Sindh Food Department staff, according to local media reports.
The warehouses are located in Dadu, Larkana, Nawabshah, Qambar-Shahdadkot, Jacobabad, Khairpur, Sukkur, Ghotki, Sanghar and Mirpurkhas.
Who are the thieves?
Among the 67 senior government officials, 49 were food supervisors and 18 food inspectors. All the officials have been suspended after being accused of being involved in the embezzlement.
....
Gautam
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Re: Pakistani Economic Stress Watch

Post by drnayar »

g.sarkar wrote:https://www.firstpost.com/world/pakista ... 97012.html
Pakistan: Over 40,000 tons of wheat stolen by dozens of govt officers from warehouses
....
Gautam


Kinda reminded of rats leaving the sinking ship taking whatever they can with them
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Re: Pakistani Economic Stress Watch

Post by Atmavik »

^^ most probably smuggled to Kabul as the price is higher . Tspa gets a cut at the border checkpost
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Re: Pakistani Economic Stress Watch

Post by chetak »

drnayar wrote:
g.sarkar wrote:https://www.firstpost.com/world/pakista ... 97012.html
Pakistan: Over 40,000 tons of wheat stolen by dozens of govt officers from warehouses
....
Gautam


Kinda reminded of rats leaving the sinking ship taking whatever they can with them



No wonder that our latest shipment of wheat to afghanistan is not by road through paxstan like the first shipment, but via chabahar port in eyeraan.
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Re: Pakistani Economic Stress Watch

Post by g.sarkar »

Please do not say bad things about rats. Pakistanis are far worse.
Gautam
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Re: Pakistani Economic Stress Watch

Post by vimal »

drnayar wrote:
g.sarkar wrote:https://www.firstpost.com/world/pakista ... 97012.html
Pakistan: Over 40,000 tons of wheat stolen by dozens of govt officers from warehouses
....
Gautam


Kinda reminded of rats leaving the sinking ship taking whatever they can with them


Immediate ban and 50 lashes to this member for disrespecting rats.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Only one Saudi bank opening LCs for Pakistan’s crude import
KARACHI: Al-Rajhi Bank of Saudi Arabia is the only foreign bank presently confirming letters of credit (LCs) for Pakistani crude oil import after the refusal from other global banks, The News learnt on Tuesday. For several months, foreign banks have been refusing to confirm the letters of credit for the import of crude oil on account of the burgeoning dollar crisis faced by Pakistan. Except Al-Rajhi Bank, other banks refrained from taking on the liability.

The issue of non-confirmation of letters of credit by the foreign banks first surfaced in May last year, when some banks refused to confirm the LCs for oil imports. With the escalation of the dollar crisis, now the country is left with only one bank that has been taking on the liability of confirming letters of credit for crude import.

According to well-informed sources in the oil sector, the reliance on only one bank for the confirmation of credit letters has been causing severe hardships for the country’s crude oil import. The issue was also raised before the State Bank of Pakistan (SBP) governor when the oil sector delegation apprised him about the issues confronting the sector.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Gas consumers to bear interest cost
ISLAMABAD: The federal government on Tuesday approved the issuance of Rs50 billion worth of sovereign guarantee to facilitate a gas distribution company in taking commercial loans and allowed the recovery of interest cost from gas consumers, again passing on its inefficiency cost to the customers.

The Economic Coordination Committee (ECC) of the cabinet, which took that decision, also bent terms of sugar export, for the second time in past three months, by accommodating the influential industrialists.
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

Dilbu wrote:Only one Saudi bank opening LCs for Pakistan’s crude import
KARACHI: Al-Rajhi Bank of Saudi Arabia is the only foreign bank presently confirming letters of credit (LCs) for Pakistani crude oil import after the refusal from other global banks,
From Wiki -
The Al Rajhi Bank is a Saudi Arabian bank and the world's largest Islamic bank by capital based on 2015 data.

Founded by Sulaiman Abdul Aziz Al Rajhi

About the founder -
Sheikh Sulaiman bin Abdulaziz Al Rajhi is a Saudi Arabian corporate figure and billionaire. As of 2011, his wealth was estimated by Forbes to be $5.9 billion, making him the 169th richest person in the world.

Sulaiman Al Rajhi was born in Al Bukairiyah, located in Al Qassim province in Saudi Arabia, and grew up in the Najd desert where he and his brother Saleh began their business by charging money for pilgrims taking camel caravans across the desert to the cities of Mecca and Medina.

The Al Rajhi brothers’ business growth and expansion was fed by the flood of migrant workers to Saudi Arabia during the 1970s oil boom. The Al Rajhis helped them send their earnings home to places like Indonesia and Pakistan.
Dilbu
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Re: Pakistani Economic Stress Watch

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IMF sets a new condition ahead of staff-level agreement
IMF is having trouble unlocking a stalled bailout package for crisis-hit Pakistan because the lender has proposed a new requirement before signing a staff-level agreement.

The US-based financial institution has demanded a written guarantee of financing by June 30 from friendly nations including Saudi Arabia, Qatar, and the United Arab Emirates after placing extremely stringent conditions on the use of bailout funds.
According to the government, the executive directors of the KSA and other countries at the IMF will provide written assurance. The Finance Ministry and the PM House discussed how to obtain written assurance from these countries in this regard.

Nearly all of the lender’s requirements have been met by the cash-strapped nation, which also increased power and gas prices and imposed Rs200 billion in taxes as part of a mini-budget.

Islamabad concurred with the latest lender requirement not to obtain direct loans from commercial banks.
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Re: Pakistani Economic Stress Watch

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‘Dollar-starved’ Pakistan struggles to pay international airlines: report
RAWALPINDI: The global air transport body has warned of an ‘aviation crisis’ in Pakistan as airlines are struggling to recover $290 million due to a severe financial crisis, the Financial Times reported on Thursday.

Pakistan Civil Aviation Authority (PCAA) has said it was trying to pay the airlines on time and has been in contact with relevant authorities over the issue.

The Financial Times, while quoting the International Air Transport Association (IATA) said it has become “very challenging” for carriers to serve Pakistan as they struggle to repatriate their dues which are paid in dollars.

The IATA, which represents some 300 airlines comprising 83 per cent of global air traffic, said $290m were stuck in Pakistan as of January up by almost a third since December.
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Re: Pakistani Economic Stress Watch

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Medicine shortage
PATIENTS across the country are facing a growing shortage of various drugs, including life-saving medicines, as pharmaceutical companies have halted or decreased production, because of either the depletion of raw material stocks or the sky-high increase in manufacturing costs in recent months. The government had been warned about the situation by drug makers quite a while back as they struggled to maintain their net income in the face of rapidly rising costs as the price of fuel and transportation skyrocketed in a highly inflationary domestic and global environment. Their troubles increased after the central bank imposed restrictions on the import of ‘luxury’ items, pharmaceutical raw material included, several months ago. Opening a letter of credit for importing active pharmaceutical ingredients has been a nightmare for the industry over the last couple of months as their stocks keep shrinking. Sadly, the government has done little to ease the troubles of the industry in spite of giving commitments to the drug makers.
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Re: Pakistani Economic Stress Watch

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Pakistan awaits nod from Gulf states to unlock IMF loan
ISLAMABAD: Pakistan is looking towards Gulf states that had promised to bridge the financing gap as the International Monetary Fund (IMF) seeks confirmation before approving the ninth review, reported The News.

As per the publication, the IMF's condition for Pakistan to bridge the gap of $6 billion is simply an attempt to ensure its credibility. Non-materialisation may result in Pakistan sliding into default.

Now, all eyes are on the Kingdom of Saudi Arabia (KSA), the UAE and Qatar to bail out Pakistan's struggling economy.

An official, who spoke to the publication on the condition of anonymity, said Pakistan has the only option to wait and pray for getting confirmation from bilateral partners from the Gulf region.
As per the report, the Fund was forced to put forth this condition on the negotiating table largely because representatives of these countries on the Executive Board had made commitments before the approval of the seventh and eighth reviews for providing financial assistance to Islamabad in different forms. These included additional deposits and investments.

However, they failed to materialise their commitments despite several months passing in the current fiscal year.

“In such a scenario, the IMF has placed the ball in Pakistan’s court for securing 100% commitment from bilateral partners before moving towards the signing of Staff Level Agreement (SLA),” sources confirmed to The News on Thursday.

The Fund has informed Islamabad that its credibility would also be at stake if the staff-level agreement is finalsied and Pakistan fails to materlise its commitment from the bilateral partners, it might slide the country into the default zone.
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Re: Pakistani Economic Stress Watch

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A-o-A new record.

Boiz are playing really well

Yawn - Textile exports plunge almost 30pc
Pakistan’s exports of textile and clothing fell 29.76 per cent in February to $1.18 billion compared to $1.68bn over the same month last year, the highest decline in a single month since Covid-19, data released by the Pakistan Bureau of Statistics (PBS) showed on Friday.

The textile and clothing exports in 8MFY23 dipped 11.09pc to $11.21bn this year against $12.61bn over the corresponding months of last year. The decline is across all the sectors during the period under review.

The overall export proceeds shrank for the sixth consecutive month in a row. The drop shows the government would find it difficult to achieve the export target this fiscal year leading to more pressure on foreign exchange reserves of the country.
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Re: Pakistani Economic Stress Watch

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30% not enough need 72% minimum
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Re: Pakistani Economic Stress Watch

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Neela
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Re: Pakistani Economic Stress Watch

Post by Neela »

Manish_P wrote:A-o-A new record.

Boiz are playing really well

Yawn - Textile exports plunge almost 30pc
Pakistan’s exports of textile and clothing fell 29.76 per cent in February to $1.18 billion compared to $1.68bn over the same month last year, the highest decline in a single month since Covid-19, data released by the Pakistan Bureau of Statistics (PBS) showed on Friday.

The textile and clothing exports in 8MFY23 dipped 11.09pc to $11.21bn this year against $12.61bn over the corresponding months of last year. The decline is across all the sectors during the period under review.

The overall export proceeds shrank for the sixth consecutive month in a row. The drop shows the government would find it difficult to achieve the export target this fiscal year leading to more pressure on foreign exchange reserves of the country.
Manish ji,
https://tribune.com.pk/story/2406092/te ... f-collapse
‘Textiles on verge of collapse’
The industry has also been hit by increased energy charges, which have made units uncompetitive and caused some to close down.
Textiles form 60% of Paki exports. They were running on subsidized power. Now the emperor is naked.
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Re: Pakistani Economic Stress Watch

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We are going around in circles. Gelf countries are recommending IMF plan. IMF asks Pakis to get the gap funded by Gelf countries.

We all remember Pakis had only 3 weeks of import reserve left. Some chinese loan was rolled over and $700 million relief was got. Well its more than 4-5 weeks since the original news. There has been no major announcements apart from how IMF is being tyrannical.

So ...will we see Paki default now. The feelers are being sent already.

https://www.dawn.com/news/1742969/is-de ... r-pakistan
Is default an option for Pakistan?
While the country’s nuclear arsenal is not under threat
:roll:
“Is Sri Lanka better after default?” the taboo question was voiced aloud by former Federal Board of Revenue (FBR) chairman Shabbar Zaidi, who seemed to think so in an interview with Dawn, a thought recently echoed by former president Asif Ali Zardari.
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

Neela wrote:
We are going around in circles. Gelf countries are recommending IMF plan. IMF asks Pakis to get the gap funded by Gelf countries.
What pakistan needs, is a nice 9/11 (version 2.023).

That's what saved them around 1998-1999 when they were close to default/bankruptcy.

Just get to the table with the Talibunnies and come to an acceptable division of the funds which will be gifted as an ally in the next War on Terror.

If either feels greedy later they can simply back-stab each other like the present.

Why re-invent the wheel hain?
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