I hope its True that Pakistani External Debt is a measly $620 BillionVips wrote:Self styled corporate honcho continues to lie.
Only a tenth of Pakistan foreign debt owed to Beijing: Umar.
Pakistani Economic Stress Watch
Re: Pakistani Economic Stress Watch
Pakistani Economic Stress Watch
Fitch expects further delay in IMF bailout for Pakistan - Salman Siddiqui
KARACHI: Fitch – one of three major global rating agencies – has anticipated a further delay on the part of Pakistan in achieving an International Monetary Fund (IMF) bailout.
It believes that the loan programme, which is expected by mid-January, can be delayed till the end of March.
The rating agency was, however, confident that the delay was a temporary phenomenon and Pakistan would successfully achieve the bailout worth $8 billion during January-March 2019. Besides, it did not see any imminent balance of payments crisis.
Devalued rupee, hiked power, gas tariff even before IMF’s conditions: Asad Umar
“Pakistan is unlikely to receive $8-billion bailout package by the next IMF board meeting scheduled for January 15 as the lender wants the government to adopt stricter measures to address the country’s economic imbalances before sending the case to its Executive Board,” Fitch said. The first round of talks between the IMF and Pakistan, which ended on November 20, remained inconclusive after both sides failed to bridge the gulf on a wide range of issues such as the increase in electricity prices, hike in interest rate, rupee depreciation, tax collection target and circular debt in the energy chain, it said.
Finance Minister Asad Umar has alluded that the government could afford a two-month delay in negotiations as a $6-billion financial assistance secured from Saudi Arabia in October suggested that there was no imminent balance of payments crisis in the near term, it said.
Low oil price a blessing
The rating agency found that falling international petroleum oil prices were a blessing for Pakistan’s economy, which largely depended on imported oil.
With the collapse in oil prices seen in October and November, the Pakistani economy has been given a huge helping hand given that the country is a net oil importer.
“The combination of low oil prices and an eventual IMF bailout will help the economy regain some of its footing,” Fitch Solutions Macro Research said in a commentary on “Economic Analysis – Oil Price Collapse to Pakistan’s Rescue” published on Thursday.
Rupee to be at 148 by 2019-end
The rating agency further said the Pakistani currency would remain stable at around the current level of Rs140 to the US dollar in the short run but would drop to Rs148 by December 2019. “This (IMF bailout and low oil prices) should allow the Pakistani rupee to stabilise against the US dollar at around the current level of Rs140/USD in the near term. That said, we expect the rupee to remain under downside pressure over the course of 2019, informing our forecast for the currency to reach Rs148/USD by end-2019,” it said.
Inefficiencies in power sector cost Pakistan $18b
“We highlight that the collapse in oil prices, which started in October, will help to reduce its external deficit and downside pressure on the rupee.”
Earlier, Pakistan had devalued the rupee by a massive 32% in six rounds in the previous 12 months to Rs139 to the US dollar compared to Rs105.5 in December 2017.
Nevertheless, “we expect the rupee to weaken further against the dollar over the coming quarters as the IMF would typically require the central bank to build up its foreign reserve buffers. Higher inflation (which came in at 6.5% year-on-year in November) relative to the US would also necessitate a weaker currency for Pakistan’s exports to remain competitive.
Cheers
KARACHI: Fitch – one of three major global rating agencies – has anticipated a further delay on the part of Pakistan in achieving an International Monetary Fund (IMF) bailout.
It believes that the loan programme, which is expected by mid-January, can be delayed till the end of March.
The rating agency was, however, confident that the delay was a temporary phenomenon and Pakistan would successfully achieve the bailout worth $8 billion during January-March 2019. Besides, it did not see any imminent balance of payments crisis.
Devalued rupee, hiked power, gas tariff even before IMF’s conditions: Asad Umar
“Pakistan is unlikely to receive $8-billion bailout package by the next IMF board meeting scheduled for January 15 as the lender wants the government to adopt stricter measures to address the country’s economic imbalances before sending the case to its Executive Board,” Fitch said. The first round of talks between the IMF and Pakistan, which ended on November 20, remained inconclusive after both sides failed to bridge the gulf on a wide range of issues such as the increase in electricity prices, hike in interest rate, rupee depreciation, tax collection target and circular debt in the energy chain, it said.
Finance Minister Asad Umar has alluded that the government could afford a two-month delay in negotiations as a $6-billion financial assistance secured from Saudi Arabia in October suggested that there was no imminent balance of payments crisis in the near term, it said.
Low oil price a blessing
The rating agency found that falling international petroleum oil prices were a blessing for Pakistan’s economy, which largely depended on imported oil.
With the collapse in oil prices seen in October and November, the Pakistani economy has been given a huge helping hand given that the country is a net oil importer.
“The combination of low oil prices and an eventual IMF bailout will help the economy regain some of its footing,” Fitch Solutions Macro Research said in a commentary on “Economic Analysis – Oil Price Collapse to Pakistan’s Rescue” published on Thursday.
Rupee to be at 148 by 2019-end
The rating agency further said the Pakistani currency would remain stable at around the current level of Rs140 to the US dollar in the short run but would drop to Rs148 by December 2019. “This (IMF bailout and low oil prices) should allow the Pakistani rupee to stabilise against the US dollar at around the current level of Rs140/USD in the near term. That said, we expect the rupee to remain under downside pressure over the course of 2019, informing our forecast for the currency to reach Rs148/USD by end-2019,” it said.
Inefficiencies in power sector cost Pakistan $18b
“We highlight that the collapse in oil prices, which started in October, will help to reduce its external deficit and downside pressure on the rupee.”
Earlier, Pakistan had devalued the rupee by a massive 32% in six rounds in the previous 12 months to Rs139 to the US dollar compared to Rs105.5 in December 2017.
Nevertheless, “we expect the rupee to weaken further against the dollar over the coming quarters as the IMF would typically require the central bank to build up its foreign reserve buffers. Higher inflation (which came in at 6.5% year-on-year in November) relative to the US would also necessitate a weaker currency for Pakistan’s exports to remain competitive.
Cheers
Re: Pakistani Economic Stress Watch
Two related pieces of news in one week. First,
Reserves fall
Second $1bn deposit received from Saudi Arabia: SBP
https://www.dawn.com/news/1451403/secon ... arabia-sbp
https://www.dawn.com/news/1451368/reserves-fall
Reserves fall
Reserves held by the State Bank of Pakistan further decreased by $242 million to $7.26 billion during the week ended on Dec 7.
And, then this,The country witnessed some relief after the first tranche of $1bn from Saudi Arabia was received on Nov 9 but now the amount has run out.
Second $1bn deposit received from Saudi Arabia: SBP
A State Bank of Pakistan (SBP) official on Friday confirmed that a second $1 billion bailout package from Saudi Arabia had been received by Pakistan.
the latest package had shored up the central bank's foreign reserves, hitting the $9.4bn mark.
Hmmmm... That was quick. Is there something wrong with my calculator? $7.26 Bn + $1.0 Bn = $9.4 Bn? Also, the pakis already burnt off $1.0 Bn in less than a month! Incredible. Must be debt service. So, the only reason why the nation is not declaring bankruptcy is because of a continuous supply of saudi alms. Shameless nation. I wonder what the saudis are getting in return?The SBP spokesman added that another Saudi financial package was expected to arrive in January 2019.
https://www.dawn.com/news/1451403/secon ... arabia-sbp
https://www.dawn.com/news/1451368/reserves-fall
Re: Pakistani Economic Stress Watch
Moody’s warns of growing debt risks, reaffirms rating of B3 negative
https://www.dawn.com/news/1451376/moody ... 3-negative
The New York-based Moody’s rating agency on Thursday expressed concern over Pakistan’s falling reserves and rising debt.
It reaffirmed the country’s rating at B3 negative, which “reflects the sovereign’s high external vulnerability, weak debt affordability, and very low global competitiveness.”
The PTI government’s promises for institutional reforms are credit positive, “if effectively implemented
It expects Pakistan’s total debt to reach 76 per cent of GDP by 2020. At present this debt stock stands at 72pc of GDP, which is “higher than the 58pc median for B-rated sovereigns
Reserve cover is below 2 months of imports, where the minimum adequacy level is usually considered to be three months
The economy is expected to continue slowing this fiscal year. “Moody’s expects real GDP growth in Pakistan to slow to 4.3-4.7pc in fiscal 2019 (ending June 2019) and fiscal 2020 from 5.8pc in fiscal 2018 in part due to policy measures taken to address the external imbalance.”
5.8% is a cooked up number. It does not allow for fall in currency values and true rate of inflation. Acche dins that will match life in the arabian desert in the 7th century will soon be here.The State Bank said in its latest monetary policy statement that Pakistan’s growth rate will undergo a “notable moderation” this year, to come in “slightly above 4.0pc”.
https://www.dawn.com/news/1451376/moody ... 3-negative
Re: Pakistani Economic Stress Watch
ADB sets $7.5 billion lending programme for Pakistan.
More loans, More Interest, More Jeehaarrdd.....The Asian Development Bank (ADB) has proposed a $7.5-billion lending programme for Pakistan for next three years, allocating one-third of the total for budgetary support to the government.
Pakistan’s largest lender on Thursday unveiled its Country Operation Business Plan for 2019 to 2021, which would cover first three years of the Pakistan Tehreek-e-Insaf (PTI) government. Of the proposed sovereign lending programme of $7.5 billion, over 71% or $5.3 billion will be given on commercial terms. The remaining $2.2 billion will have concessionary interest rates, according to the ADB.
However, against the proposed lending plan of $7.5 billion, the ADB indicated that available resources during the period would be $5.7 billion. The overall lending size is consistent with the last three-year Country Operation Business Plan.
Final loan allocation will depend on available resources, project readiness, project performance and debt distress rating of the country among others, according to the strategy document. The lender has proposed giving $2.4 billion or 32% of the total loans for budgetary support over the next three years.
ADB says Pakistan’s external conditions have worsened in past few months
Subject to overall macroeconomic stability, the policy loans will be given for energy-sector reforms, improving trade and competitiveness and financial market development.
These policy loans will be pegged with conditions like further liberalisation of Pakistan’s economy. The full loan disbursement for budgetary support will also depend on Pakistan’s ability to secure a bailout package from the International Monetary Fund (IMF) at the earliest.
Pakistani Economic Stress Watch
X Posted on the Terroristan Thread
Forex to deplete further if dollar rate not raised: SBP chief
ISLAMABAD: The Governor of State Bank of Pakistan, (SBP) Tariq Bajwa, said on Thursday that foreign exchange reserves would deplete further if the dollar exchange rate against Pak rupee was not jacked up.
Giving an indication to strike an ‘equilibrium’ on exchange rate after witnessing recent adjustments, Governor State Bank of Pakistan Tariq Bajwa said that efforts were made to keep the exchange rate stable, however, there was no other way out but to adjust it accordingly keeping in view the arising economic fundamentals.
“The exchange rate adjustment was not done happily but there was no other way out. I was in contact with minister of finance on this issue and took him on board but did not know anything about his interaction with the PM,” the SBP governor testified before the Senate Standing Committee on Finance, which met under the chairmanship of Senator Farooq H Naek here at the Parliament House on Thursday. The SBP has been projecting rising inflationary pressures in months ahead so the central bank raised its discount rates. The foreign currency reserves were also on decline, the Senate committee was told.
The SBP governor said that the exchange rate got adjusted six times during the last one year keeping in view the pressures of market forces as foreign currency reserves were on decline and the current account deficit widened to $19 billion simultaneously.
Minister of State for Revenue Hammad Azhar told the committee that the exchange rate fluctuations did not result in hiking liability of foreign debt as he made all efforts to convince senators that the loans were obtained in foreign currency and also repaid in the foreign currency. On his stance, the committee members contested him and stated that they did not agree to the claims made by the minister of state before the Senate panel.
The SBP governor told the committee that the country was dependent upon oil import and the trade deficit widened to $36 billion and it was difficult to finance such a huge gap in the absence of non-debt creating inflows such as foreign direct investments and others.
The government, he said, slapped increased rate of Regulatory Duty (RD) on 700 items through the Finance Act and its estimated value stood at $2 billion. He said that the discount rate was not jacked up for five export-oriented industries in a bid to give boost to exports.
The chairman of the committee stated that the foreign loans and liabilities were increasing at a rapid pace and the economy was witnessing a difficult situation. When inquired about the impact of recent devaluation of rupee on the economy of Pakistan, the SBP governor asked the chairman of Senate committee to hold in-camera proceedings but the committee refused to entertain his request.
Senator Ateeq Sheikh alleged that there was a need to ascertain who got benefits from recent devaluation of rupee against dollar. On this allegation, Minister of State for Revenue asked him to give proof if he possessed anything substantial.
The SBP governor also briefed the committee on hacking of bank accounts and informed it that 6,000 accounts of Bank Islami were hacked in Poland and Latvia to draw $6 million after which all banks were advised to strengthen their internal systems to secure depositors from any unwarranted episode.
Cheers
Forex to deplete further if dollar rate not raised: SBP chief
ISLAMABAD: The Governor of State Bank of Pakistan, (SBP) Tariq Bajwa, said on Thursday that foreign exchange reserves would deplete further if the dollar exchange rate against Pak rupee was not jacked up.
Giving an indication to strike an ‘equilibrium’ on exchange rate after witnessing recent adjustments, Governor State Bank of Pakistan Tariq Bajwa said that efforts were made to keep the exchange rate stable, however, there was no other way out but to adjust it accordingly keeping in view the arising economic fundamentals.
“The exchange rate adjustment was not done happily but there was no other way out. I was in contact with minister of finance on this issue and took him on board but did not know anything about his interaction with the PM,” the SBP governor testified before the Senate Standing Committee on Finance, which met under the chairmanship of Senator Farooq H Naek here at the Parliament House on Thursday. The SBP has been projecting rising inflationary pressures in months ahead so the central bank raised its discount rates. The foreign currency reserves were also on decline, the Senate committee was told.
The SBP governor said that the exchange rate got adjusted six times during the last one year keeping in view the pressures of market forces as foreign currency reserves were on decline and the current account deficit widened to $19 billion simultaneously.
Minister of State for Revenue Hammad Azhar told the committee that the exchange rate fluctuations did not result in hiking liability of foreign debt as he made all efforts to convince senators that the loans were obtained in foreign currency and also repaid in the foreign currency. On his stance, the committee members contested him and stated that they did not agree to the claims made by the minister of state before the Senate panel.
The SBP governor told the committee that the country was dependent upon oil import and the trade deficit widened to $36 billion and it was difficult to finance such a huge gap in the absence of non-debt creating inflows such as foreign direct investments and others.
The government, he said, slapped increased rate of Regulatory Duty (RD) on 700 items through the Finance Act and its estimated value stood at $2 billion. He said that the discount rate was not jacked up for five export-oriented industries in a bid to give boost to exports.
The chairman of the committee stated that the foreign loans and liabilities were increasing at a rapid pace and the economy was witnessing a difficult situation. When inquired about the impact of recent devaluation of rupee on the economy of Pakistan, the SBP governor asked the chairman of Senate committee to hold in-camera proceedings but the committee refused to entertain his request.
Senator Ateeq Sheikh alleged that there was a need to ascertain who got benefits from recent devaluation of rupee against dollar. On this allegation, Minister of State for Revenue asked him to give proof if he possessed anything substantial.
The SBP governor also briefed the committee on hacking of bank accounts and informed it that 6,000 accounts of Bank Islami were hacked in Poland and Latvia to draw $6 million after which all banks were advised to strengthen their internal systems to secure depositors from any unwarranted episode.
Cheers
Pakistani Economic Stress Watch
X Posted on the Terroristan Thread
IMF package: Softening stances raise hope of early bailout deal - Shahabaz Rana
ISLAMABAD: Islamabad and the International Monetary Fund (IMF) have narrowed down their differences on monetary and fiscal policies but the disagreement still persists on two critical issues of exchange rate adjustment and increase in electricity prices.
Both the sides have softened their positions on the targets of budget deficit and increase in interest rates after talks collapsed on November 20, sources in the Ministry of Finance told The Express Tribune. Pakistan has conceded more ground than the IMF, they said.
The IMF has shared a programme design with the Finance Ministry, which raises hopes for an early agreement on the bailout programme. In the light of new positions taken by both the parties, the government is preparing a draft of Memorandum of Economic and Financial Policies (MEFP).
The MEFP could be dispatched to Washington next week, detailing the policies that the government of Prime Minister Imran Khan would implement under the IMF umbrella from 2019 to 2021.
The sources said Pakistan is willing to make further fiscal adjustments, primarily on account of Public Sector Development Programme (PSDP). The development spending may be slashed below Rs500 billion, around 30% less than the actual spending in the previous fiscal year.
The revised deficit target for fiscal year 2018-19 may be close to 4.5% of the Gross Domestic Product (GDP) in this fiscal year. The Federal Board of Revenue’s (FBR) target could be jacked up significantly.
As a result of fiscal and monetary adjustments, Pakistan expects that the economic growth rate would remain around 4% in this fiscal year and inflation could be restricted to 7%. However, the IMF sees economy slowing down to below 3.5%.
In case of staff-level agreement, the interest rates would be further increased in coming months as a prior action but these will be lower than what the IMF had demanded during the staff level talks.
While addressing the Pakistan Economic Forum on Thursday, Prime Minister Imran Khan said the talks with the IMF were under way. The Fitch rating agency reported on Thursday that the delay in the IMF bailout package is a temporary phenomenon and Pakistan would successfully achieve the bailout worth $8 billion during January-March 2019.
The State Bank of Pakistan (SBP) has increased the interest rates by 4.25% since January including 1.5% increase in the last monetary policy.
The present 10% interest rate was 50 basis points higher than the rate the SBP Governor Tariq Bajwa had anticipated for June 2019 during a presentation to the PM couple of months ago.
The sources said the IMF has not budged from its demand of introducing a totally free float exchange rate regime. Pakistan has rejected this condition and is ready to introduce a flexible exchange rate.
The central bank has already devalued the rupee by 32.7% since January. The SBP governor said on Thursday that the exchange rate at Rs139 to a dollar was ‘near the equilibrium’. Pakistan would not crack under the IMF pressure on certain conditions, said the Finance Ministry sources.
The Fitch rating agency expects the rupee to weaken further against the dollar over the coming quarters as the IMF would typically require the central bank to build up its foreign reserve buffers.
The government has managed to carve out space till June next year due to financial support committed by China and Saudi Arabia. However, it does not have a plan beyond June 2019. Pakistan on Friday received another $1 billion from Saudi Arabia out of $3 billion cash commitments.
Pakistan likely to pay back IMF before Chinese debt: US Treasury official
The government has already consumed $1 billion that Saudi Arabia disbursed last month and the reserves have again fallen to $7.2 billion, which was the level before the Riyadh disbursed the first tranche.
The sources said increase in electricity prices is another stumbling block in early finalisation of the programme. The IMF has termed it a non-negotiable condition.
Against the National Electric Power Regulatory Authority’s determination of Rs3.82 per unit increase, the government has approved only Rs1.27 per unit increase in tariffs. The IMF wants that the government should fully pass on the increase to the end consumers.
Slim chance of obtaining IMF bailout by Jan 15
The sources said timing of the implementation of the IMF conditions is another outstanding issue. Pakistan wants that majority of the tax measures should be come into effect from July 2019 so that the government may avoid public criticism on yet another mini budget.
The Finance Ministry wants to make the fiscal adjustment by slashing the PSDP, increasing non-tax revenues through Gas Infrastructure Development Cess and raising the sales tax rates on petroleum products to 17%.
Cheers
IMF package: Softening stances raise hope of early bailout deal - Shahabaz Rana
ISLAMABAD: Islamabad and the International Monetary Fund (IMF) have narrowed down their differences on monetary and fiscal policies but the disagreement still persists on two critical issues of exchange rate adjustment and increase in electricity prices.
Both the sides have softened their positions on the targets of budget deficit and increase in interest rates after talks collapsed on November 20, sources in the Ministry of Finance told The Express Tribune. Pakistan has conceded more ground than the IMF, they said.
The IMF has shared a programme design with the Finance Ministry, which raises hopes for an early agreement on the bailout programme. In the light of new positions taken by both the parties, the government is preparing a draft of Memorandum of Economic and Financial Policies (MEFP).
The MEFP could be dispatched to Washington next week, detailing the policies that the government of Prime Minister Imran Khan would implement under the IMF umbrella from 2019 to 2021.
The sources said Pakistan is willing to make further fiscal adjustments, primarily on account of Public Sector Development Programme (PSDP). The development spending may be slashed below Rs500 billion, around 30% less than the actual spending in the previous fiscal year.
The revised deficit target for fiscal year 2018-19 may be close to 4.5% of the Gross Domestic Product (GDP) in this fiscal year. The Federal Board of Revenue’s (FBR) target could be jacked up significantly.
As a result of fiscal and monetary adjustments, Pakistan expects that the economic growth rate would remain around 4% in this fiscal year and inflation could be restricted to 7%. However, the IMF sees economy slowing down to below 3.5%.
In case of staff-level agreement, the interest rates would be further increased in coming months as a prior action but these will be lower than what the IMF had demanded during the staff level talks.
While addressing the Pakistan Economic Forum on Thursday, Prime Minister Imran Khan said the talks with the IMF were under way. The Fitch rating agency reported on Thursday that the delay in the IMF bailout package is a temporary phenomenon and Pakistan would successfully achieve the bailout worth $8 billion during January-March 2019.
The State Bank of Pakistan (SBP) has increased the interest rates by 4.25% since January including 1.5% increase in the last monetary policy.
The present 10% interest rate was 50 basis points higher than the rate the SBP Governor Tariq Bajwa had anticipated for June 2019 during a presentation to the PM couple of months ago.
The sources said the IMF has not budged from its demand of introducing a totally free float exchange rate regime. Pakistan has rejected this condition and is ready to introduce a flexible exchange rate.
The central bank has already devalued the rupee by 32.7% since January. The SBP governor said on Thursday that the exchange rate at Rs139 to a dollar was ‘near the equilibrium’. Pakistan would not crack under the IMF pressure on certain conditions, said the Finance Ministry sources.
The Fitch rating agency expects the rupee to weaken further against the dollar over the coming quarters as the IMF would typically require the central bank to build up its foreign reserve buffers.
The government has managed to carve out space till June next year due to financial support committed by China and Saudi Arabia. However, it does not have a plan beyond June 2019. Pakistan on Friday received another $1 billion from Saudi Arabia out of $3 billion cash commitments.
Pakistan likely to pay back IMF before Chinese debt: US Treasury official
The government has already consumed $1 billion that Saudi Arabia disbursed last month and the reserves have again fallen to $7.2 billion, which was the level before the Riyadh disbursed the first tranche.
The sources said increase in electricity prices is another stumbling block in early finalisation of the programme. The IMF has termed it a non-negotiable condition.
Against the National Electric Power Regulatory Authority’s determination of Rs3.82 per unit increase, the government has approved only Rs1.27 per unit increase in tariffs. The IMF wants that the government should fully pass on the increase to the end consumers.
Slim chance of obtaining IMF bailout by Jan 15
The sources said timing of the implementation of the IMF conditions is another outstanding issue. Pakistan wants that majority of the tax measures should be come into effect from July 2019 so that the government may avoid public criticism on yet another mini budget.
The Finance Ministry wants to make the fiscal adjustment by slashing the PSDP, increasing non-tax revenues through Gas Infrastructure Development Cess and raising the sales tax rates on petroleum products to 17%.
Cheers
Re: Pakistani Economic Stress Watch
Loss-making public enterprises borrow Rs115bn in five months
Saar, washing hands in flowing Ganga!
Saar, washing hands in flowing Ganga!
The loss-making public sector enterprises have been borrowing heavily from the banks as the borrowing reached Rs115.46 billion in the first five months of this fiscal year against just Rs2.58bn in the same period of last year.
https://www.dawn.com/news/1451541/loss- ... ive-monthsThe main contributors to the losses are Pakistan International Airlines, Pakistan Steel, Pakistan Railways and Water and Power Development Authority.
Re: Pakistani Economic Stress Watch
Any idea on what terms have the Saudi's given the $3Billion to the napakis?
The total package was for 6 billion. 3 billion in deferred payment for oil for upto 1 year. For the balance 3 billion, what are the repayment terms and is there going to be any interest or its on Islamic banking tradition of charging no interest, but the pakis should be ready with a bowl of vaselin whenever required?
How are the pakis going to repay the 3 billion to the Saudis?
The total package was for 6 billion. 3 billion in deferred payment for oil for upto 1 year. For the balance 3 billion, what are the repayment terms and is there going to be any interest or its on Islamic banking tradition of charging no interest, but the pakis should be ready with a bowl of vaselin whenever required?
How are the pakis going to repay the 3 billion to the Saudis?
Re: Pakistani Economic Stress Watch
How pakistan can consume something they are not supposed to consume! Didn't Saudis just park their money and told pakis not to use?Peregrine wrote:X Posted on the Terroristan Thread
IMF package: Softening stances raise hope of early bailout deal - Shahabaz Rana
The government has already consumed $1 billion that Saudi Arabia disbursed last month
Re: Pakistani Economic Stress Watch
As per the recent interview of Asad Umar on BBC, Pak Army will train Saudis for Yemen. IMO they will just change uniform and jump in as Saudi army.mody wrote:Any idea on what terms have the Saudi's given the $3Billion to the napakis?
Re: Pakistani Economic Stress Watch
I am really surprised that we haven't used our economic strength to destroy the paki economy.
We should have something like a sanctions program. MNC's can choose to either do business in India or with Pakistan.
Even open up the multi brand retail to all companies, with 100% ownership, with the condition that 70% of the goods sold by value, should be made in India and no made in Pakistan goods to sold by the company or its affiliates, anywhere in the world.
For a company like Walmart or Carrefour etc, getting to do business in India through a wholly owned subsidiary is a lot bigger then stopping their sourcing of made in Pakistan goods.
The pakis anyways export mostly leather goods, textile and garments and sporting goods. Indian manufacturers can offer alternatives for all of these. Maybe the price for some of the products might be higher then paki manufacturers, but nothing that would be a deal breaker for the likes of Adidas, Gap, Walmart etc. etc.
Even if we succeed in reducing the paki exports by about 10-15%, it would be really bad for the pakis. Also, this would be long term permanent loss of business.
Also the FDI going into pakiland would reduce. Not that there is a whole lot, but say international hotel chains, can have the option of either expanding their business and presence in India or keep running hotels in pukeland.
We can draft some anti-terror funding legislation to the effect, that any company doing business in Pakistan would have to certify that their operations are in no way contributing to funding for terror groups of their front organizations. This would include certifying that none of their employees are also donating anything to charities or other fronts which are funding terror. For most companies to comply with all this would be difficult. Behind the doors it can communicated as such. For companies operating in Pakistan, till the time of submitting all documents to satisfactorily demonstrate adherence to above law, all their future expansion plans in India would have to be on hold.
In fact given the strong competition, even companies like Coke and pepsi might consider given up their operations in Pakistan for competitive advantage in India. Say if Coke were to do it and it would be able to run huge advertising campaign about the same, forcing Pepsi to also follow suit or loose out.
This will hurt the middle and upper middle class in pukeland, as exports would drop and white collar jobs would be lost.
Also, given that we have had so many scamsters in the past and continue to have many, we should work on a banking fraud type operation in Pakistan.
Imagine a ketan parekh style scam, where bank loans would be obtained by mortgaging shares. The shares would obviously have to be hyped to fantastic prices and then mortgaged to banks, with the help of willing bank managers. The loans can be upto 60-70% of the value of the shares. The shares can be forged and mortgaged to multiple banks. The prices of the stocks can be inflated to unreasonably high levels and then dumped. The companies issuing the shares can also be fraud companies like himachal futuristic etc. so that the actual intrinsic value of the stocks would be almost zero. Imagine shares worth 5,000 crores. The same forged and mortgaged to multiple banks to increase the size of the fraud to say 10,000 to 15,000 crores.
As the shares prices would collapse, the banks would be left holding only paper. This can be hyped up and with the help of above mentioned willing bank managers, suitably greased for the operation, would trigger a cash liquidity crunch in the some of the banks. The ATMs can also be suitably under stocked to create panic of cash shortage. Media articles can be planted about the scale of the bank fraud by even hyping up the true size of the scam. This would trigger a general panic and lead to a run on the banks, leading to further actual fund shortage at the banks.
The aam abduls anyways do not have much faith in the formal economy and people would try to withdraw money out of the banks or at least not put more money in the banks.
The cash strapped government would have to start thinking about a bailout and impose temporary withdrawal limits from bank accounts. If the banking crisis lasts even say a month or better 2 months, it would disrupt the import and exports to a good extent and would also lead to slower tax collections. The aam abduls will revert more towards pure cash transactions or even barter trade, then deal through banks for business, fearing capital controls and limits on withdrawals.
All the known hawala operators should be encouraged to cash in on the opportunity and help the moneyed pakis in moving their hoard abroad. This would lead to further capital drain. More importantly, with the banking crisis and possible limits on withdrawals, the remittance from NR-pakis would slow down as they will only send back money, if it is really necessary. Most will wait till the situation improves and also hope that the currency falls further.
The crisis would lead to slowing down in growth and lower tax collections leading to higher fiscal deficit, also higher trade and current account deficit.
These measures would be enough to break the camels back so to speak or in the case the soovar's back and lead to total economic collapse.
We should have something like a sanctions program. MNC's can choose to either do business in India or with Pakistan.
Even open up the multi brand retail to all companies, with 100% ownership, with the condition that 70% of the goods sold by value, should be made in India and no made in Pakistan goods to sold by the company or its affiliates, anywhere in the world.
For a company like Walmart or Carrefour etc, getting to do business in India through a wholly owned subsidiary is a lot bigger then stopping their sourcing of made in Pakistan goods.
The pakis anyways export mostly leather goods, textile and garments and sporting goods. Indian manufacturers can offer alternatives for all of these. Maybe the price for some of the products might be higher then paki manufacturers, but nothing that would be a deal breaker for the likes of Adidas, Gap, Walmart etc. etc.
Even if we succeed in reducing the paki exports by about 10-15%, it would be really bad for the pakis. Also, this would be long term permanent loss of business.
Also the FDI going into pakiland would reduce. Not that there is a whole lot, but say international hotel chains, can have the option of either expanding their business and presence in India or keep running hotels in pukeland.
We can draft some anti-terror funding legislation to the effect, that any company doing business in Pakistan would have to certify that their operations are in no way contributing to funding for terror groups of their front organizations. This would include certifying that none of their employees are also donating anything to charities or other fronts which are funding terror. For most companies to comply with all this would be difficult. Behind the doors it can communicated as such. For companies operating in Pakistan, till the time of submitting all documents to satisfactorily demonstrate adherence to above law, all their future expansion plans in India would have to be on hold.
In fact given the strong competition, even companies like Coke and pepsi might consider given up their operations in Pakistan for competitive advantage in India. Say if Coke were to do it and it would be able to run huge advertising campaign about the same, forcing Pepsi to also follow suit or loose out.
This will hurt the middle and upper middle class in pukeland, as exports would drop and white collar jobs would be lost.
Also, given that we have had so many scamsters in the past and continue to have many, we should work on a banking fraud type operation in Pakistan.
Imagine a ketan parekh style scam, where bank loans would be obtained by mortgaging shares. The shares would obviously have to be hyped to fantastic prices and then mortgaged to banks, with the help of willing bank managers. The loans can be upto 60-70% of the value of the shares. The shares can be forged and mortgaged to multiple banks. The prices of the stocks can be inflated to unreasonably high levels and then dumped. The companies issuing the shares can also be fraud companies like himachal futuristic etc. so that the actual intrinsic value of the stocks would be almost zero. Imagine shares worth 5,000 crores. The same forged and mortgaged to multiple banks to increase the size of the fraud to say 10,000 to 15,000 crores.
As the shares prices would collapse, the banks would be left holding only paper. This can be hyped up and with the help of above mentioned willing bank managers, suitably greased for the operation, would trigger a cash liquidity crunch in the some of the banks. The ATMs can also be suitably under stocked to create panic of cash shortage. Media articles can be planted about the scale of the bank fraud by even hyping up the true size of the scam. This would trigger a general panic and lead to a run on the banks, leading to further actual fund shortage at the banks.
The aam abduls anyways do not have much faith in the formal economy and people would try to withdraw money out of the banks or at least not put more money in the banks.
The cash strapped government would have to start thinking about a bailout and impose temporary withdrawal limits from bank accounts. If the banking crisis lasts even say a month or better 2 months, it would disrupt the import and exports to a good extent and would also lead to slower tax collections. The aam abduls will revert more towards pure cash transactions or even barter trade, then deal through banks for business, fearing capital controls and limits on withdrawals.
All the known hawala operators should be encouraged to cash in on the opportunity and help the moneyed pakis in moving their hoard abroad. This would lead to further capital drain. More importantly, with the banking crisis and possible limits on withdrawals, the remittance from NR-pakis would slow down as they will only send back money, if it is really necessary. Most will wait till the situation improves and also hope that the currency falls further.
The crisis would lead to slowing down in growth and lower tax collections leading to higher fiscal deficit, also higher trade and current account deficit.
These measures would be enough to break the camels back so to speak or in the case the soovar's back and lead to total economic collapse.
Re: Pakistani Economic Stress Watch
Exactly!! That's what my understanding was that the Saudi's are just parking the money so the SPB balance sheet looks better.abhijitm wrote:How pakistan can consume something they are not supposed to consume! Didn't Saudis just park their money and told pakis not to use?Peregrine wrote:X Posted on the Terroristan Thread
IMF package: Softening stances raise hope of early bailout deal - Shahabaz Rana
The government has already consumed $1 billion that Saudi Arabia disbursed last month
Re: Pakistani Economic Stress Watch
I don't think it is required, but it is a good card to hold if needed. Already there is very little MNC business in Pakistan compared with India. Technically we are not at war with Pakis. They can hurt us, for instance (as I have argued earlier) by denying overflight rights and this will indeed be a lot more painful to us than it will be to them (when we retaliate).mody wrote:I am really surprised that we haven't used our economic strength to destroy the paki economy.
We should have something like a sanctions program. MNC's can choose to either do business in India or with Pakistan.
We also don't want to make a pretense of equivalence "us or them" because it brings us down to their level. Since we are all signatories to WTO, there are rules we have to abide by.
Re: Pakistani Economic Stress Watch
why not do a trade agreement and sell them things like automobiles, metals and ensure these critical manufacturing capabilities are never developed there. Also earn some forex in return to buy platform and ammunitions to counter them.
Effectively they will be sponsoring what we spend on them and not waste precious forex we get from other countries.
But the trade should be strictly in $$ we encourage our industries to make here.
Effectively they will be sponsoring what we spend on them and not waste precious forex we get from other countries.
But the trade should be strictly in $$ we encourage our industries to make here.
Re: Pakistani Economic Stress Watch
The way it probably worked was that the pakis knew they had a $1 Bn worth of debt service due by the end of November 2018 but various agreements with other lenders required them to maintain a minimum reserve of $X Bn. That's why the saudis parked the money as a favor to the pakis so that they (the pakis) are not in default of the existing loan agreements.mody wrote:Exactly!! That's what my understanding was that the Saudi's are just parking the money so the SPB balance sheet looks better.abhijitm wrote: How pakistan can consume something they are not supposed to consume! Didn't Saudis just park their money and told pakis not to use?
Pakis are now projecting another $2 Bn. in outflows from the SBP reserves and the saudis are again "helping them out". We dont know the real terms. Pakis are gloating over this temporarily parked buffer capital as "investment" but in reality it is not. Recall the latest announcement by A Sad Age who called it the biggest investment in pakhanistan's history?
Re: Pakistani Economic Stress Watch
And why will they agree to that? Even the low end trade we had with them (importing sugar, cane, cotton) was basically destructive to their economy/ecology, and the Sharifs were neck deep in it; however PTI is firmly opposed to increasing trade without talking about the K issue.souravB wrote:why not do a trade agreement and sell them things like automobiles, metals and ensure these critical manufacturing capabilities are never developed there. Also earn some forex in return to buy platform and ammunitions to counter them.
Effectively they will be sponsoring what we spend on them and not waste precious forex we get from other countries.
But the trade should be strictly in $$ we encourage our industries to make here.
Re: Pakistani Economic Stress Watch
As per as I have gathered, the trade is mainly limited from our side owing to the terrorist tourism, passage to Afg and usual political machismo.yensoy wrote: And why will they agree to that? Even the low end trade we had with them (importing sugar, cane, cotton) was basically destructive to their economy/ecology, and the Sharifs were neck deep in it; however PTI is firmly opposed to increasing trade without talking about the K issue.
Right now we have an upper hand. If we can just let go of our ego and even let them score a few political brownie point for long term strategic gain, we can get much closer to our goals.
Alas no political party will do it cuz it will be hard for them politically.
Pakistani Economic Stress Watch
X Posted on the P E S W Thread
IMF demands sharp revenue hikes - Mubarak Zeb Khan
ISLAMABAD: The road to an International Monetary Fund (IMF) bailout is going to be a steep one for the government in the months ahead.
According to a source with direct and detailed knowledge of the matter, the Fund has asked for Rs160 billion worth of new tax measures in the current fiscal year, which ends in June 2019, in order to stabilise the fiscal framework.
The Federal Board of Revenue (FBR) calculates that the 1.1 per cent increase alone means Rs400-500bn additional tax revenue measures. If undertaken, the steps will lift the country’s tax-to-GDP ratio to 13.9pc by end June 2021. The government has set a fiscal deficit target of 5.6pc for 2018-19 whereas the IMF’s projection is slightly below this.
The emphasis on a revenue target is a departure from standard practice for IMF. Previous Fund programmes were built around a fiscal deficit target, and it was left to the government to decide how it was going to be achieved — through some combination of revenue increases and expenditure cuts.
This time IMF is laying out specific revenue targets for each year of the proposed programme and is asking the government to commit to raising the tax-to-GDP ratio by 0.4pc of GDP by June 2019, followed by 1.1pc in FY20 and 1.2pc in FY21.
In addition to these revenue measures, the Fund has also asked for concomitant increases in provincial revenues, from current 1.1pc of GDP to 1.5pc by end of the programme. This means that provinces will also have to introduce new revenue streams.
According to earlier reports, the tax machinery has already asked the finance ministry to approach the Supreme Court to find a way to restore taxes on prepaid mobile cards. The annual collection from these taxes on prepaid cards alone is around Rs80bn, which can help plug half of the revenue demand for the first year of the programme.
In another proposal, the FBR has proposed to fix sales tax on petroleum products by volume instead of as a percentage of the price, starting from January. According to the board, petroleum products prices in Pakistan are on the lower side as compared to the regional countries. The FBR admits the new price mechanism may lead to oil price increase but justifies it on the plea to raise additional revenue and also to control its consumption.
These two measures, according to the source, could generate around Rs100bn for the government kitty. These, however, still leave the government with Rs60bn gap before June and will necessitate further tax measures.
The government is looking to tax luxury consumption for higher income earners in an effort to meet the IMF’s condition. Moreover, FBR is expecting to raise around Rs30bn alone from sales tax evasion in the next half year of 2018-19. The source suggested that the steep revenue increases demanded by the Fund are the lead reason why the government is having difficulty finalising the IMF programme.
Another source in the Finance Division told Dawn that talks are still continuing with the IMF through video conferencing. “We have suggested to share proposals next week with the Fund before the Christmas and new year holidays.” the finance official said.
“We are expecting to reach an understanding in January.” However, the source said the IMF package will not go to the board until February or March.
The focus of the IMF programme is now only on revenue generation. There is no demand for a cut in expenditures in the ongoing fiscal year, the source added.
The IMF’s resident representative in Pakistan, Teresa Daban Sanchez, when reached for comment did not confirm or deny the numbers, but said a fiscal consolidation is required and that “the policies have to be on the revenue side.”
Cheers
IMF demands sharp revenue hikes - Mubarak Zeb Khan
ISLAMABAD: The road to an International Monetary Fund (IMF) bailout is going to be a steep one for the government in the months ahead.
According to a source with direct and detailed knowledge of the matter, the Fund has asked for Rs160 billion worth of new tax measures in the current fiscal year, which ends in June 2019, in order to stabilise the fiscal framework.
The Federal Board of Revenue (FBR) calculates that the 1.1 per cent increase alone means Rs400-500bn additional tax revenue measures. If undertaken, the steps will lift the country’s tax-to-GDP ratio to 13.9pc by end June 2021. The government has set a fiscal deficit target of 5.6pc for 2018-19 whereas the IMF’s projection is slightly below this.
The emphasis on a revenue target is a departure from standard practice for IMF. Previous Fund programmes were built around a fiscal deficit target, and it was left to the government to decide how it was going to be achieved — through some combination of revenue increases and expenditure cuts.
This time IMF is laying out specific revenue targets for each year of the proposed programme and is asking the government to commit to raising the tax-to-GDP ratio by 0.4pc of GDP by June 2019, followed by 1.1pc in FY20 and 1.2pc in FY21.
In addition to these revenue measures, the Fund has also asked for concomitant increases in provincial revenues, from current 1.1pc of GDP to 1.5pc by end of the programme. This means that provinces will also have to introduce new revenue streams.
According to earlier reports, the tax machinery has already asked the finance ministry to approach the Supreme Court to find a way to restore taxes on prepaid mobile cards. The annual collection from these taxes on prepaid cards alone is around Rs80bn, which can help plug half of the revenue demand for the first year of the programme.
In another proposal, the FBR has proposed to fix sales tax on petroleum products by volume instead of as a percentage of the price, starting from January. According to the board, petroleum products prices in Pakistan are on the lower side as compared to the regional countries. The FBR admits the new price mechanism may lead to oil price increase but justifies it on the plea to raise additional revenue and also to control its consumption.
These two measures, according to the source, could generate around Rs100bn for the government kitty. These, however, still leave the government with Rs60bn gap before June and will necessitate further tax measures.
The government is looking to tax luxury consumption for higher income earners in an effort to meet the IMF’s condition. Moreover, FBR is expecting to raise around Rs30bn alone from sales tax evasion in the next half year of 2018-19. The source suggested that the steep revenue increases demanded by the Fund are the lead reason why the government is having difficulty finalising the IMF programme.
Another source in the Finance Division told Dawn that talks are still continuing with the IMF through video conferencing. “We have suggested to share proposals next week with the Fund before the Christmas and new year holidays.” the finance official said.
“We are expecting to reach an understanding in January.” However, the source said the IMF package will not go to the board until February or March.
The focus of the IMF programme is now only on revenue generation. There is no demand for a cut in expenditures in the ongoing fiscal year, the source added.
The IMF’s resident representative in Pakistan, Teresa Daban Sanchez, when reached for comment did not confirm or deny the numbers, but said a fiscal consolidation is required and that “the policies have to be on the revenue side.”
Cheers
Re: Pakistani Economic Stress Watch
We have been trying to do that for a number of years. We have also given them the Most Favoured Nation status, which ensures that goods imported from them, are taxed at the lowest rate that we are offering to any other country. However, the pakis being what they are have not reciprocated, fearing that our goods will flood their market. plus they do not want to take any steps that might help our economy. Obviously they don't understand that more then it helping us, it would help their economy.yensoy wrote:And why will they agree to that? Even the low end trade we had with them (importing sugar, cane, cotton) was basically destructive to their economy/ecology, and the Sharifs were neck deep in it; however PTI is firmly opposed to increasing trade without talking about the K issue.souravB wrote:why not do a trade agreement and sell them things like automobiles, metals and ensure these critical manufacturing capabilities are never developed there. Also earn some forex in return to buy platform and ammunitions to counter them.
Effectively they will be sponsoring what we spend on them and not waste precious forex we get from other countries.
But the trade should be strictly in $$ we encourage our industries to make here.
Pakis are compulsively hostile neighbours and the only way to treat the problem is to destroy them completely. Destroying then economically would be easier, without juch cost in men or resources for us and would ensure that militarily also their threat dimishes.
Re: Pakistani Economic Stress Watch
the most favored nation status given to the pakis in 1996 is not operational because of nonreciprocity from their side but we have let it stay and use it as a stick to beat them every now and then.mody wrote:We have been trying to do that for a number of years. We have also given them the Most Favoured Nation status, which ensures that goods imported from them, are taxed at the lowest rate that we are offering to any other country. However, the pakis being what they are have not reciprocated, fearing that our goods will flood their market. plus they do not want to take any steps that might help our economy. Obviously they don't understand that more then it helping us, it would help their economy.yensoy wrote:
And why will they agree to that? Even the low end trade we had with them (importing sugar, cane, cotton) was basically destructive to their economy/ecology, and the Sharifs were neck deep in it; however PTI is firmly opposed to increasing trade without talking about the K issue.
Pakis are compulsively hostile neighbours and the only way to treat the problem is to destroy them completely. Destroying then economically would be easier, without juch cost in men or resources for us and would ensure that militarily also their threat dimishes.
they explored some alternate phraseology for MFN and backed out finally because of jehadi mullah opposition. Non-Discriminatory Market Access (NDMA) is what they are said to be leaning towards. this is apparently sharia-compliant for them.
they debated for long years over the wording and porkistan did not grant the MFN status to India because translated into Urdu, MFN meant "Sabse Pasandida Mulk" (my favourite country).
the internationally accepted wording also became a major issue for these illiterate flea-bitten goat lovers.
Re: Pakistani Economic Stress Watch
Less (none) of statistics but more of a 'feel' of the situation. Some facts are telling.
From Yawn - The Slumping Market
From Yawn - The Slumping Market
As young Murshid Hasan walks into a bakery on Karachi’s Sindhi Muslim chowrangi with two girls in tow, a slender 40-something man is arguing with the baker over new samosa prices.
“Do you even understand how much a man has to calculate expenses?” booms Mohammad Ishaq, the 40-something client.
Hasan places an order for six samosas instead of the usual dozen.
...
Samosas are great levellers but if bakers are to be believed, they haven’t levelled in a good way. Whether it’s a service-sector employee such as Ishaq or a professional such as Murshid, many in Karachi have had to cut down on their expenses. Samosas, it seems, are among the casualties of the financial crunch being faced in many homes across Pakistan. A luxury item now, so to speak.
The crunch at home, in turn, is also being reflected in the markets — “business thapp parra hai, market thapp parri hai [business is down, the market is down],” as pharmacist Mohammad Owais put it.
“Our customers had been complaining of inflation for many months,” says Owais. “But the big change ever since the new government has come in is that traders have started getting squeezed. And because we are now feeling the pinch of inflation, we are realising that our customers are losing their power of purchasing.”
An electronics shop owner in Lahore, Salman Hasan, laid off two workers last week to prepare for the “drought that is coming.” Almost everyone is expecting more inflation and more taxes.
“Most of what I am selling is Chinese,” explains Hasan. “That means high-specification products at an affordable rate. We have been seeing a decline in sales even before the new government came in. With the stock markets fiasco, though, I have only made three sales in the past two weeks. That has never happened.”
Roadside street vendors have started seeing more customers.
Saleem Butt and Irfan Ali sell tea at seven rupees a cup, near Faisalabad’s Ghantaghar market, for example, and longer queues have started forming. Similarly, Mohammad Junaid Butt sells chana daal on his pushcart on the corner of the road leading towards Lahore’s Gawalmandi food street. Earlier, his clientele was largely working-class but of late, he has been noticing gentlemen from nearby offices “dressed in shirts and ties” also come to his pushcart. “My food is the same but perhaps I have become affordable now,” he chuckles.
Re: Pakistani Economic Stress Watch
More alms on their way. Why? Because more debt service is due this month.
China may park $2 billion in Pakistan reserves this month
https://www.thenews.com.pk/print/406839 ... this-month
China may park $2 billion in Pakistan reserves this month
In a positive development, China is most likely to park $2 billion in Pakistan reserves sometime in the ongoing month of December, and, more importantly, the economic diplomacy with the UAE is also going to fetch the dividends. And in the month of January 2019, the country is most likely to attain $6 billion facility as is managed from Saudi Arabia, a senior official, privy to the development, told The News.
“UAE will also deposit $3 billion in Pakistan reserves, but in installments’ mode, and would also extend oil facility of $3 billion on deferment payment too.”
Pakistan authorities are also in process to finalise the purchase of 15 billion RMBs (Yuan) at commercial rate almost at the cost of over $2 billion for trade with China in local currency which will help Pakistan come out of US dollar’s pressure too.
No self respect, no shame. Why work for food when one can get it by begging?The official said that the latest statement by Asad Umar that Pakistan is not in a hurry for the IMF bailout package indicates that impending relief from China and UAE to support the foreign reserves is on the cards.
https://www.thenews.com.pk/print/406839 ... this-month
Re: Pakistani Economic Stress Watch
They will run through this 'parked money' by Saudi Arabia, China and others by June 2019. what after that? They have total payables in excess of $20 billion in the next one year.
Re: Pakistani Economic Stress Watch
exactly like the social effect that some "work" programs of the GoI has had on the populace that insists on using these programs. Once they get used to getting cash for doing nothing, they prefer to do just that.anupmisra wrote:More alms on their way. Why? Because more debt service is due this month.
China may park $2 billion in Pakistan reserves this month
In a positive development, China is most likely to park $2 billion in Pakistan reserves sometime in the ongoing month of December, and, more importantly, the economic diplomacy with the UAE is also going to fetch the dividends. And in the month of January 2019, the country is most likely to attain $6 billion facility as is managed from Saudi Arabia, a senior official, privy to the development, told The News.“UAE will also deposit $3 billion in Pakistan reserves, but in installments’ mode, and would also extend oil facility of $3 billion on deferment payment too.”Pakistan authorities are also in process to finalise the purchase of 15 billion RMBs (Yuan) at commercial rate almost at the cost of over $2 billion for trade with China in local currency which will help Pakistan come out of US dollar’s pressure too.No self respect, no shame. Why work for food when one can get it by begging?The official said that the latest statement by Asad Umar that Pakistan is not in a hurry for the IMF bailout package indicates that impending relief from China and UAE to support the foreign reserves is on the cards.
https://www.thenews.com.pk/print/406839 ... this-month
labor in many rural areas has become very scarce as well as extremely costly.
-
ArjunPandit
- BRF Oldie
- Posts: 4056
- Joined: 29 Mar 2017 06:37
Re: Pakistani Economic Stress Watch
I am very happy with the solutions found out by pakis, they will be on the road to perdition with this for sure.
Re: Pakistani Economic Stress Watch
+100 The more they avoid and delay the IMF bailout the bigger hole they are digging for themselves. Typical tactical brilliance from the inbred morons.ArjunPandit wrote:I am very happy with the solutions found out by pakis, they will be on the road to perdition with this for sure.
-
ArjunPandit
- BRF Oldie
- Posts: 4056
- Joined: 29 Mar 2017 06:37
Re: Pakistani Economic Stress Watch
^^With the solutions followed by pakis, I am wondering the following, which one will happen first
1. Total Economic collapse like Argentina
2. Political collapse: or Afghnistanization of Pakistan? State stretches itself beyond its means culturally and politically and ends up being playground of superpowers
3. War Induced collapse: They get ahead of themselves and attack Endians resulting in a cold start, possibly loss of PoK and echandee and subsequent implosion (by baloch/sindhs)
4. Water induced Starvation by India/Afghanistan: After all their water mgmt, exploding population, and india tapping all capabilities (even if not abrogating that baldhead treaty)
All these are possible in our lifetimes. The question is how will we manage the entry of fundoos radicalized for 3 gens of progressive hatred for India adn malsi superiority
1. Total Economic collapse like Argentina
2. Political collapse: or Afghnistanization of Pakistan? State stretches itself beyond its means culturally and politically and ends up being playground of superpowers
3. War Induced collapse: They get ahead of themselves and attack Endians resulting in a cold start, possibly loss of PoK and echandee and subsequent implosion (by baloch/sindhs)
4. Water induced Starvation by India/Afghanistan: After all their water mgmt, exploding population, and india tapping all capabilities (even if not abrogating that baldhead treaty)
All these are possible in our lifetimes. The question is how will we manage the entry of fundoos radicalized for 3 gens of progressive hatred for India adn malsi superiority
Re: Pakistani Economic Stress Watch
Don't worry. Pakis are very experienced in having small packages parked in and pulled out, all the time. That's what they excel at. I hear they can even handle multiple packages at once.Vips wrote:They will run through this 'parked money' by Saudi Arabia, China and others by June 2019. what after that? They have total payables in excess of $20 billion in the next one year.
Re: Pakistani Economic Stress Watch
‘Mini-budget’ planned as IMF, govt still differ.
So much for the boasting by pakistan of Charsi Immy getting support from Ummah. Saudis have just provided loan , not free money and are charging interest on it which is more then the interest rate that IMF would charge under the aid program/facility.He said that $2bn from Saudi Arabia had been received and another $1bn would be available early next month. The loan had been made available at 3.18 per cent return.
Re: Pakistani Economic Stress Watch
With UAE aid, Pakistan bridges half of financing gap.
With an announcement by the United Arab Emirates (UAE) that it is giving $3 billion in loans, Pakistan government has bridged half of the financing gap after including Saudi Arabian assistance, but it still waits for another $6 billion that will mainly come from commercial banks (More interest to pay) .
The Ministry of Finance’s financing lineup shows deposits of $6 billion by the monetary authorities, after the assistance from the UAE and Saudi Arabia. On top of that, receipt of $4.3 billion has been estimated on account of oil financing facilities from the Islamic Development Bank and Saudi Arabia during the current fiscal year.
Still, $4.5 billion would be required in commercial loans from foreign banks to meet the revised external financing requirement of $22 billion, said sources in the Ministry of Finance.
They said Pakistan had already received $450 million worth of foreign commercial loans in first five months of the current fiscal year and it needed another $4 billion in the remaining seven months.
The UAE announced on Friday that it would deposit $3 billion in the State Bank of Pakistan (SBP) to bolster the country’s dwindling foreign currency reserves. With the announcement, the UAE will match the assistance from Saudi Arabia, which had agreed topark loan $3 billion in Pakistan’s foreign exchange reserves.
In a statement carried by the state-run WAM news agency, the Abu Dhabi Fund for Development said it would deposit the much-needed money in coming days to enhance Pakistan’s liquidity and reserves of foreign currency.
Prime Minister Imran Khan tweeted on Friday to thank the UAE for helping Pakistan in times of distress.
Saudi Arabia has already announced a $6-billion assistance package, equally divided between cash and oil supply on deferred payments. Of that, $2 billion has already been deposited with the central bank. In the outgoing week, Finance Minister Asad Umar told a parliamentary panel that Pakistan would pay 3.18% interest on the Saudi loan.
“It is expected that loan terms for the UAE financial assistance will be similar to the Saudi loan ,” said a senior government official. (Loan not free money)
The cost of borrowing from Saudi Arabia is almost triple the price China has charged for placing $3 billion with the SBP as a deposit.
For the current fiscal year 2018-19, the finance ministry has projected that gross external financing requirement of Pakistan will be $22 billion, down from initial estimates of $28 billion. This is primarily due to reduction in the current account deficit projection from $19 billion to around $13 billion, according to the ministry’s estimates.
During the first five months of FY19, the current account deficit stood at $6 billion, which was 11% less than the comparative period of previous year. But the pace was not enough to restrict the deficit to $13 billion in the remaining seven months of the year.
Debt servicing has now been estimated at $8.8 billion, suggesting repayment of some of the maturing deposits has been deferred.
Against the annual budgetary projection of $2 billion, the government has estimated receiving $4.5 billion on account of commercial loans. These include $1.7 billion in short-term commercial loans and $2.8 billion in medium-term commercial borrowings. Most of these loans are expected to come from Chinese commercial banks. (This is the help that china has promised - More Loans
)
The government has dropped the plan of issuing $3 billion worth of Eurobond and Sukuk in the current fiscal year and proceeds of only $700 million have been projected, probably on account of Diaspora bonds.
Commercial borrowing has been replaced with sovereign bonds aimed at avoiding a high financing cost in the absence of an International Monetary Fund (IMF) programme. But this will increase refinancing risks due to the short tenor of commercial borrowings. Another $2 billion is expected to come from some “unidentified sources”. Nearly $2 billion in Chinese project financing has been estimated for the current fiscal year to meet the financing gap.
With an announcement by the United Arab Emirates (UAE) that it is giving $3 billion in loans, Pakistan government has bridged half of the financing gap after including Saudi Arabian assistance, but it still waits for another $6 billion that will mainly come from commercial banks (More interest to pay) .
The Ministry of Finance’s financing lineup shows deposits of $6 billion by the monetary authorities, after the assistance from the UAE and Saudi Arabia. On top of that, receipt of $4.3 billion has been estimated on account of oil financing facilities from the Islamic Development Bank and Saudi Arabia during the current fiscal year.
Still, $4.5 billion would be required in commercial loans from foreign banks to meet the revised external financing requirement of $22 billion, said sources in the Ministry of Finance.
They said Pakistan had already received $450 million worth of foreign commercial loans in first five months of the current fiscal year and it needed another $4 billion in the remaining seven months.
The UAE announced on Friday that it would deposit $3 billion in the State Bank of Pakistan (SBP) to bolster the country’s dwindling foreign currency reserves. With the announcement, the UAE will match the assistance from Saudi Arabia, which had agreed to
In a statement carried by the state-run WAM news agency, the Abu Dhabi Fund for Development said it would deposit the much-needed money in coming days to enhance Pakistan’s liquidity and reserves of foreign currency.
Prime Minister Imran Khan tweeted on Friday to thank the UAE for helping Pakistan in times of distress.
Saudi Arabia has already announced a $6-billion assistance package, equally divided between cash and oil supply on deferred payments. Of that, $2 billion has already been deposited with the central bank. In the outgoing week, Finance Minister Asad Umar told a parliamentary panel that Pakistan would pay 3.18% interest on the Saudi loan.
“It is expected that loan terms for the UAE financial assistance will be similar to the Saudi loan ,” said a senior government official. (Loan not free money)
The cost of borrowing from Saudi Arabia is almost triple the price China has charged for placing $3 billion with the SBP as a deposit.
For the current fiscal year 2018-19, the finance ministry has projected that gross external financing requirement of Pakistan will be $22 billion, down from initial estimates of $28 billion. This is primarily due to reduction in the current account deficit projection from $19 billion to around $13 billion, according to the ministry’s estimates.
During the first five months of FY19, the current account deficit stood at $6 billion, which was 11% less than the comparative period of previous year. But the pace was not enough to restrict the deficit to $13 billion in the remaining seven months of the year.
Debt servicing has now been estimated at $8.8 billion, suggesting repayment of some of the maturing deposits has been deferred.
Against the annual budgetary projection of $2 billion, the government has estimated receiving $4.5 billion on account of commercial loans. These include $1.7 billion in short-term commercial loans and $2.8 billion in medium-term commercial borrowings. Most of these loans are expected to come from Chinese commercial banks. (This is the help that china has promised - More Loans
)The government has dropped the plan of issuing $3 billion worth of Eurobond and Sukuk in the current fiscal year and proceeds of only $700 million have been projected, probably on account of Diaspora bonds.
Commercial borrowing has been replaced with sovereign bonds aimed at avoiding a high financing cost in the absence of an International Monetary Fund (IMF) programme. But this will increase refinancing risks due to the short tenor of commercial borrowings. Another $2 billion is expected to come from some “unidentified sources”. Nearly $2 billion in Chinese project financing has been estimated for the current fiscal year to meet the financing gap.
Re: Pakistani Economic Stress Watch
Modyji, IMHO. MNC = Wrong target. Global Banking Institutions are the better target. If they are dealing with funds in a terrorist republic, they have no business doing business in India. They should be simply asked to wind up their businesses in India and leave, ie chose between India and terrorist pukistan. You can either trade here or there with a terrorist. Not both. Let terrorist pukistan react as necessary when they cannot find a counter party to help with an international transaction.mody wrote:I am really surprised that we haven't used our economic strength to destroy the paki economy.
We should have something like a sanctions program. MNC's can choose to either do business in India or with Pakistan.
Re: Pakistani Economic Stress Watch
Check the pedigree of an expert being interviewed on economic matters by a pakistani channel
The 'expert' who is being interviewed is a wanted fugitive in USA for committing financial fraud in his brokerage firm.
He is wanted in the US after escaping to pakitsan and has not gone back for 17 years.
And here comes the victim card!!! I am victim and because i am a muslim and was setting up a bank in the US i was targeted by the Zionist lobby in the US.
"“I was the first Muslim who opened a bank in the US, so they behaved with me the same way they treated Agha Hassan Abedi of the Bank of Credit & Commerce International.”"
It does not end here,even his degrees are fraudulent.
May the tribe of such pakistani channels and 'experts' increase exponentially.
The 'expert' who is being interviewed is a wanted fugitive in USA for committing financial fraud in his brokerage firm.
He is wanted in the US after escaping to pakitsan and has not gone back for 17 years.
And here comes the victim card!!! I am victim and because i am a muslim and was setting up a bank in the US i was targeted by the Zionist lobby in the US.
"“I was the first Muslim who opened a bank in the US, so they behaved with me the same way they treated Agha Hassan Abedi of the Bank of Credit & Commerce International.”"
It does not end here,even his degrees are fraudulent.
May the tribe of such pakistani channels and 'experts' increase exponentially.
Re: Pakistani Economic Stress Watch
As IMF talks sputter, govt seeks another route
ISLAMABAD: The scale of the adjustment being demanded by the International Monetary Fund (IMF) “is too large” and accession to the programme is likely to be delayed, a senior official involved in the negotiations tells Dawn.
“Our talks with the IMF are not going well,” he says, adding: “The only option we have now is to do something on our own.”
One central issue in the talks is the size of the adjustment between revenues and expenditures that the Fund is asking the government to implement. Another issue is a continuing hike in interest rates, which will raise the cost of borrowing for both the government and business.'
What in the name is this? What a joke... $300million foreign exchange trading daily volume! INR exchange is greater by more than two orders of magnitude. What a pathetic specimen the Paki economy is.In addition, there is a demand for complete free float of the exchange rate, as has been widely reported already, to allow the market to fully determine the value of the rupee.
...
“Ours is a small market in the range of $200 million to $300m trading on a daily basis,” a senior official tells Dawn. Agreeing to the IMF demand would “allow few players to manipulate the tiny market easily,” he says.
And there's the rub. The crore commanders in Rawalpindi can never be denied their fair share of the spoils.A steep cut in current expenditures of the sort that the Fund is asking for can put the government in the awkward position of asking the generals to take a sharp pay cut.
-
ArjunPandit
- BRF Oldie
- Posts: 4056
- Joined: 29 Mar 2017 06:37
Re: Pakistani Economic Stress Watch
No offence but Is that sharia compliant? I read that under islamic practices proscribe charging interest. That is one of the fundamental islamic principles and one of the reasons why jews were being hated by everyone amongst rest of abrahmic religions. I saw in a documentary that jews exploited a loophole in bible that those who charge interest should not stay with their family. And they stayed away from their families.Vips wrote:‘Mini-budget’ planned as IMF, govt still differ.
So much for the boasting by pakistan of Charsi Immy getting support from Ummah. Saudis have just provided loan , not free money and are charging interest on it which is more then the interest rate that IMF would charge under the aid program/facility.He said that $2bn from Saudi Arabia had been received and another $1bn would be available early next month. The loan had been made available at 3.18 per cent return.
Re: Pakistani Economic Stress Watch
Right the paki armed forces have already asked for 18% hike in defence budget for next yeardhyana wrote:As IMF talks sputter, govt seeks another route
And there's the rub. The crore commanders in Rawalpindi can never be denied their fair share of the spoils.A steep cut in current expenditures of the sort that the Fund is asking for can put the government in the awkward position of asking the generals to take a sharp pay cut.
. Even at that the rupee devaluation effectively means they will be at a lower budget then last year. Charsi and Qureshi know that they have to provide the increased allocation and that IMF will not allow it so they are now looking to make alternative arrangements and are pleading and 
for 'flexibility' to be shown by IMF. The only other alternate option for pakistan are the chinese who will accommodate only if pakis agree to the condition of chinese ownership of dams, railway lines and other strategic resources, which the Nawaz government did not agree to under the CPEC.
Pakistani Economic Stress Watch
X Posted on the Terroristan Thread
Pakistan’s Fitch Rating downgrade : What it means and what it doesn’t
Pakistan’s Fitch Rating downgrade : What it means and what it doesn’t
Credit rating agency Fitch Ratings has recently downgraded Pakistan’s long-term foreign currency issuer default rating by one notch, from B to B-.
In its commentary on the downgrade, Fitch referred to Pakistan’s shrinking forex reserves and high debt burden among other factors.
CheersThe rating downgrade has pushed Pakistan to the lower end of the highly speculative grade.
Re: Pakistani Economic Stress Watch
Tough times likely for Pakistan as global watchdog expands monitoring of terror funding to state sponsors
The global watchdog on terrorism financing, financial action task force (FATF), is expanding its monitoring jurisdiction from terror groups to states who support terrorism, a development that will increase scrutiny of Pakistan that has already attracted the body’s criticism .
A public statement by the FATF after its recent October plenary said for the first time that it would monitor states that fund terrorism, a move with
implications for Pakistan that was put on the organisation’s “Grey List” in June for failing to act credibly against terror financing.
In October, a public statement by FATF observed, “the funding of terrorism or the resourcing of a terrorist entity by any State remains incompatible
with the FATF standards. The FATF will remain diligent in identifying new risks associated with the financing of ISIL, Al Qaeda and their affiliates and will continue to take robust measures to ensure that these terrorist financing risks are mitigated.”
In 2018 too, FATF broadened its monitoring of terror financing with regard to Islamic State (ISIL) to include Al Qaeda and its affiliates, which would include terror groups that expressly target India such as Lashkar-e-Taiba and Jaish-e-Mohammed as they are listed under the UN Security Council’s resolution 1267.
In October, Pakistan submitted a 27-point action plan to be implemented in 15 months. After Pakistan was placed on the Grey List, Pakistan made a high-level commitment to work with FATF “to address its strategic counter-terrorist financing-related deficiencies.” Though Pakistan technically has over a year, any progress it makes — or doesn’t — will be discussed in the Asia Pacific group meetings in January and the plenary in February.(Danda getting ready to be ghumaoed on paki back sides)
As the US plans its exit from Afghanistan, Pakistan can expect, according to diplomatic sources, to come under pressure regarding its support to Taliban and other terror groups in Afghanistan. As the US plans its exit from Afghanistan, Pakistan can expect, according to diplomatic sources, to come under pressure regarding its support to Taliban and other terror groups in Afghanistan like the Haqqani Network.
The global watchdog on terrorism financing, financial action task force (FATF), is expanding its monitoring jurisdiction from terror groups to states who support terrorism, a development that will increase scrutiny of Pakistan that has already attracted the body’s criticism .
A public statement by the FATF after its recent October plenary said for the first time that it would monitor states that fund terrorism, a move with
implications for Pakistan that was put on the organisation’s “Grey List” in June for failing to act credibly against terror financing.
In October, a public statement by FATF observed, “the funding of terrorism or the resourcing of a terrorist entity by any State remains incompatible
with the FATF standards. The FATF will remain diligent in identifying new risks associated with the financing of ISIL, Al Qaeda and their affiliates and will continue to take robust measures to ensure that these terrorist financing risks are mitigated.”
In 2018 too, FATF broadened its monitoring of terror financing with regard to Islamic State (ISIL) to include Al Qaeda and its affiliates, which would include terror groups that expressly target India such as Lashkar-e-Taiba and Jaish-e-Mohammed as they are listed under the UN Security Council’s resolution 1267.
In October, Pakistan submitted a 27-point action plan to be implemented in 15 months. After Pakistan was placed on the Grey List, Pakistan made a high-level commitment to work with FATF “to address its strategic counter-terrorist financing-related deficiencies.” Though Pakistan technically has over a year, any progress it makes — or doesn’t — will be discussed in the Asia Pacific group meetings in January and the plenary in February.(Danda getting ready to be ghumaoed on paki back sides)
As the US plans its exit from Afghanistan, Pakistan can expect, according to diplomatic sources, to come under pressure regarding its support to Taliban and other terror groups in Afghanistan. As the US plans its exit from Afghanistan, Pakistan can expect, according to diplomatic sources, to come under pressure regarding its support to Taliban and other terror groups in Afghanistan like the Haqqani Network.
Last edited by Vips on 26 Dec 2018 21:47, edited 3 times in total.
Re: Pakistani Economic Stress Watch
Pakistan loses another international legal battle; slapped with $21m penalty.
Pakistan has lost another legal battle at the international forum as the London Court of International Arbitration (LCIA) awarded a penalty of $21 million (Rs2.92 billion) to the country in the infamous Broadsheet LLC case. Talking to The Express Tribune, a senior government official confirmed that contrary to the claim of billions of rupees, the LCIA has awarded a penalty of $21 million to Pakistan.
“Now, we will challenge the verdict as we are confident that the award of $20 million penalty will be quashed by the higher forum,” he further stated. It is learnt that consultation has been going on with different international legal firms to get their opinion on the fine. (They will spend more money on lawyers and after loosing the case will claim a conspiracy against pakistan )
The Broadsheet LLC, based in the Isle of Man, was hired by the National Accountability Bureau during Musharraf’s regime to trace out hidden assets of Pakistanis in foreign countries. NAB signed an agreement with the Broadsheet but terminated it in 2003.
According to the Global Arbitration Review (GAR), the firm’s claim against Pakistan was worth at least $600 million, but a senior official told The Express Tribune that the claim was $340 million.
In July, the international arbitration body based in United Kingdom heard for four days a claim by the Broadsheet LLC against Pakistan and its anti-corruption body- NAB- at the London office of Allen & Overy, said the law firm representing NAB.
Former English Court of Appeal judge Sir Anthony Evans QC heard the case as sole arbitrator in a London-seated proceeding under the rules of the Chartered Institute of Arbitrators.
The Broadsheet’s dispute with NAB has a convoluted and colourful history. The company was established by Colorado businessman Jerry James and entered liquidation proceedings in the Isle of Man in 2005, before being dissolved and then revived.
Meanwhile, James established a Colorado company with the same name and negotiated an agreement with NAB in 2008 that purported to settle the dispute for $2.25 million, which NAB officials paid. He died in 2011, reportedly by jumping from the fifth-floor balcony of a Paris hotel.
In August 2016, the international tribunal judge Sir Anthony Evans upheld the Broadsheet’s arguments that the 2008 settlement was not binding on it, as James had no authority to act on the company’s behalf at the time.
The same international tribunal held that Pakistan is liable to pay damages as NAB wrongfully repudiated an asset recovery agreement with the Broadsheet and committed a tort of civil conspiracy by entering into a sham settlement with a former Broadsheet executive.
The tribunal ruled that the Broadsheet was entitled to damages in an amount to be determined. The Broadsheet was represented by Stuart Newberger of Crowell & Moring in Washington, DC.
Later, the quantum stage was started wherein the Broadsheet relied on information gathered by a joint investigation team (JIT) established by the Supreme Court of Pakistan to examine evidence concerning the Sharif family’s holdings.
The Broadsheet submitted a forensic report by expert firm, Stroz Friedberg, analysing those parts of the JIT report that were public, while Pakistan had submitted a counter-report prepared by the FTI Consulting.
The claimant also petitioned the Supreme Court to unseal volume 10 of the JIT report that could potentially serve as a basis for further damages claims. The apex court scheduled a hearing on that plea on July 30.
The PTI-led government was already facing major legal battles in world legal forums, paying billions of dollars in damages in several controversial matters, especially in Broadsheet, Karkey and Reko Diq cases.
Currently, Pakistan is facing more than three dozen cases of different nature at international courts. Even some independent power producers (IPPs) also filed cases with international arbitrators, seeking clearance of their pending dues, which amount to more than a trillion rupees.
However, legal experts are wondering that though Prime Minister Imran Khan is constituting task forces on different issues he has yet to pay attention to evolve a strategy to deal with the cases which are being contested at different international forums wherein proceedings have already been initiated against Pakistan to recover billions of rupees as claimed by several companies in different matters.
On August 22, 2017, the International Centre for Settlement of Investment Disputes (ICSID) awarded $846 million in damages to Karkey Karadeniz Elektrik Uretim AS, a Turkish power company. According to the ICSID award, Pakistan will not only pay damages amounting to more than $800 million, but is also bound to pay $5.6 million (Rs590 million) per month as interest to Karkey. In the Reko Diq case, the verdict is likely to be announced next year. The quantum stage has ended. Pakistan is likely to face billions of rupees award in this case as well.
Pakistan has lost another legal battle at the international forum as the London Court of International Arbitration (LCIA) awarded a penalty of $21 million (Rs2.92 billion) to the country in the infamous Broadsheet LLC case. Talking to The Express Tribune, a senior government official confirmed that contrary to the claim of billions of rupees, the LCIA has awarded a penalty of $21 million to Pakistan.
“Now, we will challenge the verdict as we are confident that the award of $20 million penalty will be quashed by the higher forum,” he further stated. It is learnt that consultation has been going on with different international legal firms to get their opinion on the fine. (They will spend more money on lawyers and after loosing the case will claim a conspiracy against pakistan
)The Broadsheet LLC, based in the Isle of Man, was hired by the National Accountability Bureau during Musharraf’s regime to trace out hidden assets of Pakistanis in foreign countries. NAB signed an agreement with the Broadsheet but terminated it in 2003.
According to the Global Arbitration Review (GAR), the firm’s claim against Pakistan was worth at least $600 million, but a senior official told The Express Tribune that the claim was $340 million.
In July, the international arbitration body based in United Kingdom heard for four days a claim by the Broadsheet LLC against Pakistan and its anti-corruption body- NAB- at the London office of Allen & Overy, said the law firm representing NAB.
Former English Court of Appeal judge Sir Anthony Evans QC heard the case as sole arbitrator in a London-seated proceeding under the rules of the Chartered Institute of Arbitrators.
The Broadsheet’s dispute with NAB has a convoluted and colourful history. The company was established by Colorado businessman Jerry James and entered liquidation proceedings in the Isle of Man in 2005, before being dissolved and then revived.
Meanwhile, James established a Colorado company with the same name and negotiated an agreement with NAB in 2008 that purported to settle the dispute for $2.25 million, which NAB officials paid. He died in 2011, reportedly by jumping from the fifth-floor balcony of a Paris hotel.
In August 2016, the international tribunal judge Sir Anthony Evans upheld the Broadsheet’s arguments that the 2008 settlement was not binding on it, as James had no authority to act on the company’s behalf at the time.
The same international tribunal held that Pakistan is liable to pay damages as NAB wrongfully repudiated an asset recovery agreement with the Broadsheet and committed a tort of civil conspiracy by entering into a sham settlement with a former Broadsheet executive.
The tribunal ruled that the Broadsheet was entitled to damages in an amount to be determined. The Broadsheet was represented by Stuart Newberger of Crowell & Moring in Washington, DC.
Later, the quantum stage was started wherein the Broadsheet relied on information gathered by a joint investigation team (JIT) established by the Supreme Court of Pakistan to examine evidence concerning the Sharif family’s holdings.
The Broadsheet submitted a forensic report by expert firm, Stroz Friedberg, analysing those parts of the JIT report that were public, while Pakistan had submitted a counter-report prepared by the FTI Consulting.
The claimant also petitioned the Supreme Court to unseal volume 10 of the JIT report that could potentially serve as a basis for further damages claims. The apex court scheduled a hearing on that plea on July 30.
The PTI-led government was already facing major legal battles in world legal forums, paying billions of dollars in damages in several controversial matters, especially in Broadsheet, Karkey and Reko Diq cases.
Currently, Pakistan is facing more than three dozen cases of different nature at international courts. Even some independent power producers (IPPs) also filed cases with international arbitrators, seeking clearance of their pending dues, which amount to more than a trillion rupees.
However, legal experts are wondering that though Prime Minister Imran Khan is constituting task forces on different issues he has yet to pay attention to evolve a strategy to deal with the cases which are being contested at different international forums wherein proceedings have already been initiated against Pakistan to recover billions of rupees as claimed by several companies in different matters.
On August 22, 2017, the International Centre for Settlement of Investment Disputes (ICSID) awarded $846 million in damages to Karkey Karadeniz Elektrik Uretim AS, a Turkish power company. According to the ICSID award, Pakistan will not only pay damages amounting to more than $800 million, but is also bound to pay $5.6 million (Rs590 million) per month as interest to Karkey. In the Reko Diq case, the verdict is likely to be announced next year. The quantum stage has ended. Pakistan is likely to face billions of rupees award in this case as well.