Pakistani Economic Stress Watch

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shiv
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Re: Pakistani Economic Stress Watch

Postby shiv » 16 Nov 2010 19:11

Gwadar holds the key to Chinese plans of an overland route.

Here is a great map of Pakistan's railways
http://www.pamirtours.pk/maps/PAKISTAN% ... %20MAP.jpg

There appears to be no railway track north of Islamabd and no track to Gwadar. How is China going to have a rail link to Gwadar? Djinns?

The distance from Islamabad to the Kunjerab pass is 900 km and from Karachi to Gwadar is 700 km. Blothel will have to lay 1600 km of tracks in Pakistan.

Apparently the sea rote to Shanghai is 16,000 km but the land route to the Chinee border from Gwadar is 2500 plus km. Of that only 1100 km Islamabad to Karachi has tracks.

I believe that China cannot say "I'll take this rather than that". They have to try and make the land route as well. But Pakhanastan was a poor bet. The land route via the Khunjerab can get blocked in winter and summer (avalanches/landslides). The road route to the border from Izlammerbahd is a 48 hour journey. To Karachi 12 hours and another 12 to Gwadar. There is no railway line to Gwadar and Pakistan railways are shrinking partly as a result of Chinese locomotives. About 5-7 days journey into a Chinese city

It is about 10,000 km from Straits of Hormuz to Shanghai. That is a 2 week sail for a ship sailing at 15 kts. But the volume is higher. Actually we tend to think only of oil to China. Oil to China can go via a pipeline. But China's economy is exports. Those exports need to be shipped out as well so a land route via Pakhanastan would be good - but looks like a distant dream.



Here is a collection of news about Gwadar

http://www.dailytimes.com.pk/default.asp?page=2008\09\13\story_13-9-2008_pg3_4
Balochistan is very delicately poised; he will need to go even further than the promised levels of autonomy to appease the Baloch.

The province not only provides the country with the most efficient natural gas, it also is the richest in terms of mineral resources. What is more, it has the strategic port of Gwadar, the significance of which has been explained in a previous article. (Shaukat Qadir, “Strategic significance of Balochistan”, August 16)

If Pakistan is to tap into potential commerce flowing from Central Asia, whether through Afghanistan or China, Gwadar is the key to our economic future. A promising start on this front could be the shifting of Gwadar Development Authority from Karachi to Gwadar, :D and encouraging the GDA to employ as many Baloch citizens as possible.


http://www.asiaone.com/News/The%2BBusin ... 39356.html
'The expectation was that (PSA) would bring in trade, but it has not done so and turned the whole port - built with Pakistani and Chinese investments - into a white elephant,' said Rasul Bakhsh Rais, professor of political science at the Lahore University of Management Science.


http://www.theatlantic.com/magazine/arc ... re/7385/2/
Nisar Baluch, the general secretary of a Baluch nationalist organization, was the group’s leader. He had unruly black hair and a thick moustache. His fingertips tapped on the table as he lectured me, staring into the middle distance. “The Pakistani army is the biggest land grabber,” he began. “It is giving away the coast of Baluchistan for peanuts to the Punjabis.

“The Punjabi army wears uniforms, but the soldiers are actually terrorists,” he continued. “In Gwadar, the army is operating as a mafia, falsifying land records. They say we don’t have papers to prove our ownership of the land, though we’ve been there for centuries.” Baluch told me he was not against development, and supported dialogue with the Pakistani authorities. “But when we talk about our rights, they accuse us of being Taliban.

“We’re an oppressed nation,” he said, never raising his voice, even as his finger-tapping grew in intensity. “There is no other choice but to fight. The whole world is now talking about Gwadar. The entire political establishment in this country is involved in the crime being perpetrated there.”

Then came this warning:

“No matter how hard they try to turn Gwadar into Dubai, it won’t work. There will be resistance. The pipelines going to China will not be safe. They will have to cross through Baluch territory, and if our rights are violated, nothing will be secure.” In 2004, in fact, a car bomb killed three Chinese engineers on their way to Gwadar. Other nationalists have said that Baluch insurgents would eventually kill more Chinese workers, bringing further uncertainty to Gwadar.

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Re: Pakistani Economic Stress Watch

Postby Lalmohan » 16 Nov 2010 19:14

access to gwadar for exports cannot make economic sense
almost all of china's manufacturing industry is located in the coastal belt. getting to the south china sea and pacific has to remain the highest prioirity and the least expensive
so all in all, i can't see a good case for gwadar for imports or exports
but i do see one for PLAN to poke its ungli into the arabian sea from a secure base

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Re: Pakistani Economic Stress Watch

Postby Patni » 16 Nov 2010 19:15

KESC DISCONNECTS 15 POLICE LOCATIONS 3 LOCATIONS USE KUNDA AND ILLEGAL RECONNECTION AGAIN


KARACHI, Nov. 11: The Karachi Electric Supply Company on Thursday disconnected power supply to 15 police locations including Central Police Headquarters at I. I. Chundrigar Road. The Sindh Police has to pay over Rs. 330 million outstanding for several years.
The power supply to these police locations had been disconnected before for non-payment but the Police officials in Meethadar kharadar, Garden and Napier reconnected them illegally after the KESC staff left the venues.

The police connections which were disconnected on Thursday include: Central Police Office I. I. Chundrigar Road, Police Headquarters Garden Road, Police Headquarters and Office Garden Road, Napier Police Station (flats), Methadar Kharadar Police Estate (flats), Soldier Bazar Police Station, Artillery Maidan Police Station, Artillery Maidan Police Station (flats), Saddar Police Station, Ferozabad Police Station, Nazimabad Police Station, Liaquatabad Police Station, S. R. P. Base-I Baldia Town Police Station, Police Training Institute Baldia Town, Shaheed Benazir Bhutto Elite Police Training Centre Razzakabad.


KWSB HOUSING COLONY DISCONNECTED
KARACHI, Nov. 08: Due to non payment of dues KESC has disconnected the housing colony of KWSB at 9th Mile Shara e Faisal. The monthly billing of KWSB amounts to Rs. 325 million where as in last two months only 50 million has been paid by KWSB. Our notice to clear the major chunk of dues by 29th October was not taken seriously due to which we had no option left but to disconnect.

Total dues of KWSB are 12 Billion.

It may be noted that KESC is facing pressure from SSGC to clear their outstanding payments which is not possible with out receiving payments from KWSB and other defaulters.


GAS SUPPLY DROPS TO ONE FOURTH: SOME MINUTES ADDED TO LOAD SHEDDING CYCLES

KARACHI, Oct. 28: The Karachi Electric Supply Company has expressed great concern over the inconvenience caused to Karachi citizens due to extended spells of load shedding. However, quite unmindful of the power consumers’ plight, the Sui Southern Gas Company further reduced gas supply to KESC on Thursday bringing it down to as low as mere one fourth of KESC’s approved quota of 276 MMCFD gas.

This coupled with KANUPP still not supplying has forced KESC into huge shortfall of power generation which is trying its best to keep the City lights on by burning as much of high priced furnace oil as possible.

As SSGC curtailed gas supply of KESC to 70 MMCFD on Thursday from the preceding day’s 80 MMCFD, the previously announced load shedding plan will continue with addition of some extra minutes to each cycle of load shedding for residential and commercial areas, while the fixed duration and timing of load shedding in industrial areas will remain the same as before. As soon as the gas supply increases to normal level, the load shedding situation will also go back to usual three spells.

The SSGC had been supplying 200 MMCFD to KESC till about 10 days ago which has been drastically curtailed to 70 MMCFD. On the other hand, power supply from KANUPP may also not be available very soon which usually provides 80 MWs.

As per the continuing load shedding plan, the high loss domestic and commercial areas will see four cycles of load shedding for 2.3 hours each on rotational basis. The areas having medium loss will undergo four spells of 1.25 hours each, while the low loss areas will have the power supply suspended for three cycles of one hour each. The sensitive connections and strategic installations will continue to be exempted from load shedding as before.

Industrial areas have been divided into two groups; three cycles of load shedding comprising four hours each will be carried out in each group.

Here are the details of the industrial groups and the fixed timing of load shedding: Industrial Group No. 1: Grids including Dhabeji, Federal A & B, Hub Chowki, Korangi East, Korangi Town, Korangi West, KEPZ, Landhi, Port Qasim, Pipri, Qayumabad, Gulshan e Maymar, North Karachi & Surjani will observe load shedding from 12:00 am to 04:00 am, from 08:00 am to 12:00 pm, and from 04:00 pm to 08:00 pm.

Industrial Group No. 2 comprising Grids SITE, Mauripur, Haroonabad, Valika & West Wharf will see load shedding from 04:00 am to 08:00 am, from 12:00 pm to 04:00 pm, and from 08:00 pm to 12:00 am. The KESC will be constrained to continue this load shedding plan until the SSGC resumes normal gas supply.

The KESC has asked the Government to look into the Karachi energy situation immediately in view of the problems being faced by common citizens. Especially the students, shopkeepers and factory workers are facing great difficulties because of the prolonged load shedding spells.

The situation is also causing undue loss to KESC which is burning extra furnace oil to continue generating as much electricity as possible. But all the generation plants cannot function on oil and the single fuel based turbines which only need gas to run are producing much below their capacity.

The KESC believes that SSGC is not carrying out its responsibilities as a true public service energy provider and it has shown no response over the suffering of Karachi citizens. The Government needs to interfere and order the SSGC to resume KESC’s gas supply as soon as possible.



Wanted to look for some early signs of stress to paki economy and infrastructure etc and found few gems as above.

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Re: Pakistani Economic Stress Watch

Postby RajeshA » 16 Nov 2010 19:17

OT - A Chinese Naval Base in Gwadar at the mouth of the Persian Gulf can however give everybody the jitters.

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Re: Pakistani Economic Stress Watch

Postby shiv » 16 Nov 2010 19:23

RajeshA wrote:OT - A Chinese Naval Base in Gwadar at the mouth of the Persian Gulf can however give everybody the jitters.



While searching for info on Gwadar I saw one or two news items that alleged that the running of Gwadar port was given to the Singapore port authority on a 40 year lease under US pressure. There are dozens of news items from Paquis saying they want it to be handed to the Chinese. The Chinese, as reported earlier lost interest in 2009 because of security considerations.

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Re: Pakistani Economic Stress Watch

Postby Lalmohan » 16 Nov 2010 19:30

for the PLAN to maintain a strong presence in gwadar, they need air cover and major logistics. as you've said shiv, there is no rail head. air cover can be provided by the PAF, but is it fool proof? logistics can be provided by the PA, but is it guaranteed?
all in all, the costs outweigh the benefits (as of now)

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Re: Pakistani Economic Stress Watch

Postby shiv » 16 Nov 2010 19:54

Gwadar is currently a non starter for the Chinese.

I think a few things need to be summarized about Chinese connections to Gwadar
1) The US must leave first. Even if the US turns tail and runs - it will take at least till 2014
2) Pakis need to settle things with Balochis. I see no sign of that
3) After the US leaves he Chinese will have to build the infrastructure to connect Gwadar to China. Even at a blistering Chinese pace they have to work in Pakistan. Expect 3 years - after 2014 - that is 2017.

So what we need to look for are the signs of US leaving Pakistan and China moving in to build the infrastructure. In a "best case scenario" for China I do not see a functioning link to China until 2017. And there will be clear signs before that.

Even so, let me repeat a post I made earlier
viewtopic.php?p=958661#p958661

The US wants to get out of Afghanistan (or so they say). But the US is also promising to stay engaged with Pakistan unlike the past (or so they say). That means the US IMO will sit in Pakistan for years. And the US will control all pipelines and the Silk route. Hence China's desperation to send ships via the Arctic and all.

What if the US went? Along with the US, support to the Pakistani army is likely to go. The Pakistan army will then sell itself wholly and completely to the CPC. Ultimately this will not be in our interest. On the other hand, US support to the Pakistan army too is not wholly in our interest. That is why I believe that despite the pain caused we have to economically incorporate the largely agrarian, largely Indic population of Pakistan with India - initially by an economic integration.

When I think about the pattern of terrorism in India I am convinced that the anti-india terrorists are almost wholly under Pakistani control. It is only the anti-Pakistan terrorists who are partly out of Pakistan army control. That makes them our allies, but both the US and China will oppose them since they threaten the whore - the Pakistan army. The anti India terrorists would be allies of the Chinese - but they are now gradually becoming foes of the US. The situation is actually very fluid.

I am certain that the US or China can support the Paki army forever. But the US has clearly expressed its inability to support 170 million Paki forever. China too cannot do that despite their great generosity to clap ridden whores. The population of Pakistan's poor will double the number of poor whom China has to "uplift" and I don't see China sustaining Paki mango Abduls. IMO the Mango Abduls only hope is history and geography - i.e trade links with India.

Only the Paki army stands in the way..

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Re: Pakistani Economic Stress Watch

Postby RajeshA » 16 Nov 2010 20:11

shiv wrote:I am certain that the US or China can support the Paki army forever. But the US has clearly expressed its inability to support 170 million Paki forever. China too cannot do that despite their great generosity to clap ridden whores. The population of Pakistan's poor will double the number of poor whom China has to "uplift" and I don't see China sustaining Paki mango Abduls. IMO the Mango Abduls only hope is history and geography - i.e trade links with India.

Only the Paki army stands in the way..


In another of your posts you wrote:
shiv wrote:I don't "object" to this thread but I believe that it may not help to give us the true picture of the Pakistani economy.

I am no economist, but at a basic "ground level" - i.e a farm laborer working in someone's land it is possible that the man gets paid only in terms of food and shelter. He earns a pittance - paid in Pakrupees - paid by a landowner who pays no taxes. The landowner gets free electricity and water - with the water, power and roads having been paid for by "aid money. Multiply this by 100 million and you get Pakistan. If there is a good harvest everyone gets a bit more though the landowner gets the most. He may sell part of his crop "unofficially" to some party at premium prices in exchange for goods or services that do not in any way get reflected in the national economy because of lack of tax and controls.

None of the above gets reflected in the economic indicators of Pakistan. It is entirely possible for a geographic area of land containing millions of people to contain lots of well fed and happy people with a very poor central economy. Only the later shows up in figures. The latter gets reflected only in terms of poor infrastructure and in loan repayments. Both those are being adjusted by 3.5 as "aid or "loan write offs". The scam actually exists at a very high level in the economies of the 3.5 who milk the funds of their own countries and channel it towards Pakistan where the money, having been diverted from the original country (the 3.5) can then be redistributed among a small group of wealthy Pakistanis, and bankers, bureaucrats and businesspeople from the 3.5.

A Pakistan economy watch will not, in my view, reveal anything more that 10% of the economic scam that Pakistan actually is. Pakistan can survive without an economy because of this scam. It is a fertile land that supports an agricultural economy that has no bearing on the national economy. The national economy is a scam being run by the Paki elite and army in cahoots with top level people in the 3.5.

I woud be happy to have this picture corrected or torn down by people who understand economics.


So in a fertile country called Pakistan, it is possible that the 160 million Pakistanis will live off the land, many on a pittance - some food and some shelter. The rest - the elite, who require modern amenities and consumer goods can be supported by the Chinese. The Chinese don't have to support everybody, just the people who matter. The rest will live like they have been living for centuries - on a pittance and a prayer.

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Re: Pakistani Economic Stress Watch

Postby shiv » 16 Nov 2010 20:17

RajeshA wrote:So in a fertile country called Pakistan, it is possible that the 160 million Pakistanis will live off the land, many on a pittance - some food and some shelter. The rest - the elite, who require modern amenities and consumer goods can be supported by the Chinese. The Chinese don't have to support everybody, just the people who matter. The rest will live like they have been living for centuries - on a pittance and a prayer.


What is missing from here is what I have kept on stressing. Pakistan was 140 million during the Kargil war. It is said to be 170 (or 180) million now. It will become 250 million in 7 years. Maybe 350 million by 2025

That is a big enough population to have huge pockets of poverty and starvation. Even if there is no revolution to overthrow a government that is supported by China - no progress will be made in economic improvement of Pakistan. There can only be a decline unless they concentrate on education and development. Islamism and terrorism are set to continue.

India may not benefit. but no one else will either.

At a most fundamental level state failure is failure of governance. Pakistani governance has not changed over the years. Funding from friends has increased. but what has shown the biggest change is population. And the performance of Pakistan the nation state in the world is open for all to see. It has gradually moved from war with India and loss of Bangladesh, to terrorism in Kashmir, to another war with India (1999), to terrorism allover India, terrorism in other countries and finally terrorism in Pakistan and the overt loss of control of some parts of Pakistan.

If you have 4 people in your house you need to feed them and clothe them and give them shelter.
If you have 10 people in your house you need to feed them and clothe them and give them shelter.
If you have 25 people in your house you need to feed them and clothe them and give them shelter.

For this you need a continuous increase in the money you earn and you need to spend it on those people. If you merely buy toys for yourself - sooner or later some of those 25 are going to attack you even if your customers are paying you handsomely for the sex you give them

The point of the post you quoted was really to say that "economic indicators" of Pakistan as published need not necessarily reflect what will happen to Pakistan because those economic indicators reflect the "accounted for" money from 3.5 friends. But the fate of Pakistan will be tied up to the fate of its 140 er 170 er 180 million people

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Re: Pakistani Economic Stress Watch

Postby BijuShet » 16 Nov 2010 22:37

From People's daily China(posting in full) : Pakistan's debt-to-GDP ratio crosses 61%
14:19, June 27, 2010
Pakistan's central bank said the country's total debt-to-GDP ratio has crossed 61 percent during the current fiscal year, breaching the 60 percent limit set under the Fiscal Responsibility and Debt Limitation Act, local media reported on Sunday.

According to the report of the State Bank of Pakistan on its official website, Pakistan's external debt-to-GDP ratio hit 30 percent while the domestic debt-to-GDP ratio mounted to an alarming level of 31 percent.

Despite better performance on the external front, domestic public debt remains on the rise, up by 20 percent during the 11 months of the current fiscal year, said the report.

Pakistan has been facing the burden of mounting debt pressure. The same stems from escalating fiscal deficit of the country as compared to the budgetary estimates.

During the current fiscal year of 2010 which closes at the end- June, the fiscal deficit rose to 5.2 percent of the GDP against the budgeted 4.7 percent. The domestic side remained a prominent source of financing fiscal deficit.

A differentiating factor came in the form of the International Monetary Fund's (IMF) budgetary support under its augmented funding plan for Pakistan.

The contribution of the IMF funding in the overall external financing of the country has risen. The IMF's total share in external debt has risen from 4 percent in the fiscal year of 2006 to 14 percent till the third quarter of the current fiscal year.

Contribution of public debt under total external debt dropped to 82 percent from 91 percent in fiscal year 2006.

The disbursements under the IMF program are expected to conclude in fiscal year 2011, but it remains to be seen whether the government will seek further budgetary support from the global donor during fiscal year 2011 in case additional inflows from sources such as the United States under the Kerry-Lugar and Tokyo pledges fail to materialize on time.

Even though the IMF program contributed towards bringing stability, favorable external factors also played a major role.

The country's current account deficit has shown substantial improvement as it dropped by 66 percent during the first 11 months of the current year. Credit should be given to better export performance, which registered a growth of three percent during the period.

However, the real savior was in fact the recessionary condition in the global markets, which kept commodity prices, especially oil under stress. The result is evident as imports registered a decline of 3.5 percent.

Another commendable aspect is record level of remittances, which is set to reach 8.8 billion U.S. dollars in the current fiscal year, thereby providing desirable support to the overall balance of payments in the absence of foreign direct investment.

Despite better performance on the external front, domestic public debt is still on the rise. Overall public debt, thereby, remains a strong source of vulnerability to the economy and mounting domestic debt is also strongly suggesting an interest rate rise in the offing.

Source: Xinhua

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Re: Pakistani Economic Stress Watch

Postby ramana » 16 Nov 2010 22:50

Biju, Can you project the debt/GDP ratio for the next ten years? Use linear scale for estimation process. Floods etc are non-linearities.

And can someone do a pie chart of the data in above article?

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Re: Pakistani Economic Stress Watch

Postby BijuShet » 16 Nov 2010 22:59

We can use the timeline in the table below to compare the debt to GDP ratios during the Zia, Benazir, Nawab Sharif and Musharraf years. We can see how the US help kept the ratio low in the 1980's and then after 2001 again. The ratios tell a story when TSP was under sanctions for going public about its nuclear status and during the post USSR 1990s.

From the page 2 of this report : Public Debt Burden and Economic Growth: Evidence from Pakistan
Muhammad Nadeem Qureshi
PhD Research Student, Department of Economics
Bahauddin Zakariya University Multan, Pakistan
E-mail: nadeembinislam@yahoo.com
Tel: +92-321-3020162, +92-22-3864776
Karamat Ali
Chairman, Department of Economics, Islamia University Bahawalpur, Pakistan
Abstract
Pakistan has been borrowing loans for the last almost forty years from different
international institutions and developed nations; it has become a big burden on the
economy in terms of debt servicing. In this current study, we analyze the impact of high
public debt burden on the economy of Pakistan. The sample of the study is 1981 to 2008.
Within our selected indicators for the economy, we find that there is vast negative impact
of public debt on the economy of Pakistan.

Table 2.1: Level of public debt of Pakistan

Year -----|---------- (Rs in Billion) --------------------|---- (As % of GDP)------------------------
-----------|- Domestic -|--- External--|-Total Public-|-Domestic-|--External--|- Total Public
-----------|---Debt ----|--- Debt------|-- Debt -------|--- Debt---|--Debt -----|---- Debt-------
1980-81 -|- 0062.5 ---|--- 0101.4 ---|--- 0163.9 ---|--- 22.5 ---|--- 36.4 ---|--- 058.9
1981-82 -|- 0079.1 ---|--- 0135.3 ---|--- 0214.4 ---|--- 24.4 ---|--- 41.7 ---|--- 066.1
1982-83 -|- 0101.7 ---|--- 0155.2 ---|--- 0256.9 ---|--- 27.9 ---|--- 42.6 ---|--- 070.5
1983-84 -|- 0122.7 ---|--- 0168.2 ---|--- 0290.9 ---|--- 29.2 ---|--- 40.1 ---|--- 069.3
1984-85 -|- 0149.9 ---|--- 0203.9 ---|--- 0353.8 ---|--- 31.7 ---|--- 43.2 ---|--- 074.9
1985-86 -|- 0203.1 ---|--- 0237.7 ---|--- 0440.8 ---|--- 39.5 ---|--- 46.2 ---|--- 085.7
1986-87 -|- 0248.5 ---|--- 0274.9 ---|--- 0523.4 ---|--- 43.4 ---|--- 48.0 ---|--- 091.4
1987-88 -|- 0290.1 ---|--- 0301.0 ---|--- 0591.1 ---|--- 43.0 ---|--- 44.6 ---|--- 087.6
1988-89 -|- 0333.2 ---|--- 0373.0 ---|--- 0706.2 ---|--- 43.3 ---|--- 48.5 ---|--- 091.8
1989-90 -|- 0381.3 ---|--- 0427.2 ---|--- 0808.5 ---|--- 44.5 ---|--- 49.9 ---|--- 094.4
1990-91 -|- 0448.2 ---|--- 0527.6 ---|--- 0975.8 ---|--- 42.9 ---|--- 50.5 ---|--- 093.4
1991-92 -|- 0525.1 ---|--- 0585.3 ---|--- 1110.4 ---|--- 42.9 ---|--- 47.8 ---|--- 090.7
1992-93 -|- 0608.0 ---|--- 0680.3 ---|--- 1288.3 ---|--- 45.0 ---|--- 50.3 ---|--- 095.3
1993-94 -|- 0700.1 ---|--- 0836.9 ---|--- 1536.0 ---|--- 44.5 ---|--- 50.0 ---|--- 094.5
1994-95 -|- 0805.0 ---|--- 0956.5 ---|--- 1761.5 ---|--- 42.9 ---|--- 50.6 ---|--- 087.3
1995-96 -|- 0920.2 ---|--- 1076.2 ---|--- 1996.4 ---|--- 43.7 ---|--- 51.3 ---|--- 095.0
1996-97 -|- 1050.5 ---|--- 1236.3 ---|--- 2286.8 ---|--- 44.1 ---|--- 53.7 ---|--- 097.8
1997-98 -|- 1199.0 ---|--- 1453.2 ---|--- 2652.2 ---|--- 44.8 ---|--- 57.6 ---|--- 102.4
1998-99 -|- 1452.0 ---|--- 1677.6 ---|--- 3129.6 ---|--- 49.4 ---|--- 61.5 ---|--- 110.9
1999-00 -|- 1644.0 ---|--- 1758.6 ---|--- 3402.6 ---|--- 43.4 ---|--- 56.0 ---|--- 099.4
2000-01 -|- 1798.0 ---|--- 1960.2 ---|--- 3758.2 ---|--- 43.2 ---|--- 52.1 ---|--- 095.3
2001-02 -|- 1774.0 ---|--- 2005.8 ---|--- 3779.8 ---|--- 40.3 ---|--- 50.9 ---|--- 091.2
2002-03 -|- 1894.0 ---|--- 2064.0 ---|--- 3958.0 ---|--- 39.3 ---|--- 43.1 ---|--- 082.4
2003-04 -|- 2012.0 ---|--- 2046.6 ---|--- 4058.6 ---|--- 35.7 ---|--- 36.7 ---|--- 072.4
2004-05 -|- 2158.0 ---|--- 1998.8 ---|--- 4156.8 ---|--- 32.8 ---|--- 32.6 ---|--- 065.4
---------------------------------------------------------------------------------------------------

Sources: Pakistan Economic Survey; Annual Report, SBP; World Tables, World Bank; WDI.


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Re: Pakistani Economic Stress Watch

Postby BijuShet » 16 Nov 2010 23:05

From Same report as above Page 3
Table 2.2: Total Debt Servicing as % of GDP (1988-2005)

Years -- Total Debt Servicing
------------ as % of GDP
1988-89 -- 08.2
1989-90 -- 07.7
1990-91 -- 07.2
1991-92 -- 07.7
1992-93 -- 08.0
1993-94 -- 08.3
1994-95 -- 09.2
1995-96 -- 08.5
1997-98 -- 10.7
1998-99 -- 11.7
1999-00 -- 09.8
2000-01 -- 08.3
2001-02 -- 10.0
2002-03 -- 06.2
2003-04 -- 05.3
2004-05 -- 04.8


External debt has grown less speedily than domestic debt. In 1980-81, external debt was more than 36 percent of the GDP and domestic debt was less than 23 percent. During 1991-92 the domestic and the external debt had come close to each other. In mid 90’s both of the debts increased fast in the democratic time period and total public debt reached up to more than 110 percent of GDP in 1998-99, than since 1999-00 both types of debt has a declining trend and now stood at 65.4% of GDP in 2004-05 in which 32.8% is domestic and 32.6% of GDP is the external debt.

The domestic debt to GDP ratio increased very fast throughout the decade of the 80s, especially in 1980-87 and later in 2000-05. This shows up some achievement in debt management in recent years but it is still a big burden on our economy.

Because of high debt burden, the economy of Pakistan is badly affected in terms of debt servicing. Pakistan paid as much as 11.7% of GDP as debt servicing in 1998-99. Fortunately, in return of strategic support to US and US allies war against terrorism, number of foreign loans are rescheduled so debt servicing has a declining trend since 2001-02. For details see table 2.2. The bad effects of external debt are not only principal amount payments, interest payments (which normally doubled the actual amount) but also controlled decisions by other forces that provide loans.

The decline in the debt servicing is due to exogenous factor. Any how, this is a good support for Pakistan to use the fiscal space and increase development expenditure or to use them to get rid of most high interest loans.


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Re: Pakistani Economic Stress Watch

Postby Prem » 16 Nov 2010 23:12

Trick is to bring them back to 1999-2000 economic level by hurting the textile export and making every NRP a terrorist in WEST . This will shut down 2 major sources of hard currency infusion into the 'economy '. Rest will fall apart in no time.

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Re: Pakistani Economic Stress Watch

Postby Lalmohan » 16 Nov 2010 23:15

NRP funds flow from west are mostly done via islamic 'charities' - and you know where that goes...
not sure that the western NRP's are sending much cash back themselves
but gulf based ones certainly are

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Re: Pakistani Economic Stress Watch

Postby BijuShet » 16 Nov 2010 23:16

From ADB - Country Strategy and Program 2002-2006: Pakistan : I. Development Agenda
B. Current Political, Macroeconomic, and Social Trends

Roots of Pakistan's Debt Crisis
Box 2: Roots of Pakistan's Debt Crisis
The macroeconomic problems faced by Pakistan today are the result of poor economic management and deteriorating governance over the last two decades. In the 1980s, large aid flows, as a consequence of Pakistan's role in the war in Afghanistan against the Soviet Union, allowed the Government to postpone much-needed macroeconomic reforms. During the 1980s the fiscal deficit averaged over 7 percent of gross domestic product (GDP), and current account deficit averaged almost 4 percent. In addition, the nationalized commercial banks and state-owned development finance institutions were used as instruments of patronage to provide cheap credit to favored entrepreneurs and politicians. Tariffs were kept at a high level and exports of agricultural raw materials were heavily taxed, thus ensuring excessive profits for those able to get investment licenses. Inefficient industries flourished; corruption was institutionalized; the financial sector was weakened; and loss-making public enterprises, as well as public debt, expanded.

With the withdrawal of Soviet Union from Afghanistan in the late 1980s, foreign aid flows to Pakistan declined sharply, precipitating the first of several economic crises during this period. Between 1988 and 1998, Pakistan negotiated three programs with the International Monetary Fund, but because of frequent changes of government and lack of political will these were never fully implemented. The fiscal deficit continued to average over 7 percent of GDP, and the average current account deficit increased to almost 5 percent. Public debt expanded rapidly, and debt servicing even more so because of the increasing use of expensive short-term debt to finance the external deficit, and high cost national saving schemes to finance the domestic deficit. The impact of the 1998 economic sanctions, in the aftermath of the nuclear tests, resulted in the collapse of the exchange rate and the beginning of a full-blown economic crisis. In 1998, total debt (both domestic and external) exceeded the GDP, total debt servicing accounted for 67 percent of all Government revenues, and external debt servicing accounted for 55 percent of export earnings, i.e., Pakistan's debt indicators were worse than most heavily indebted poor countries. The situation has improved somewhat since 1998, and in 2001 the ratio of total debt servicing to Government revenues had declined to 57 percent and external debt servicing to exports to 37 percent.

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Re: Pakistani Economic Stress Watch

Postby BijuShet » 16 Nov 2010 23:42

amit wrote:You know I just hope that Poak's $50 billion debt is written off. :)
...
That's why their Finance Minister is so shit scared of a debt write off. I just hope they do it!


Amitji, I posted 3 posts prior to this one to explain the debt position of TSP. This year TSP will pay 5.6 Billion USD (paid $4.632 billion as principal amount while $1.007 billion was paid as interest on the entire foreign debt and liabilities.) for its debt servicing. If all debt was forgiven then we would have 5.6 Billion sloshing in TSP's pot. Do you see the danger of leaving that much money on the table especially when it comes to TSP. Their debt burden is crushing them slowly and will only get worse. Why would we want to alleviate those troubles and allow them to spend the money elsewhere (i.e. use against us).

To add to my previous posts here is another one from State Bank of TSP that shows Pakistan's debt servicing data(from 1997 to 2001) as well as some other very interesting numbers and ratios. This is straight from the horses mouth but then again this is being TSP all these numbers could be horse manure just as well.
Pakistan's internal debt File Format: Microsoft Word - Quick View

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Re: Pakistani Economic Stress Watch

Postby BijuShet » 16 Nov 2010 23:51

From (this year's) Dawn - Aug 07 2010 article about debt servicing cost to TSP (posting in full). Next post is from 2008 (2 years in the past).

Debt servicing claims $5.6bn
By Shahid Iqbal Saturday, 07 Aug, 2010
Karachi Aug 6: Pakistan paid a staggering $5.6 billion as debt servicing during the last fiscal ended on June 30, which was 43 per cent of the official foreign exchange reserves of the country.

The State Bank reported on Friday that the country paid $4.632 billion as principal amount while $1.007 billion was paid as interest on the entire foreign debt and liabilities.

This massive payment was possible mainly because of continued higher inflows from IMF, overseas Pakistanis, US aid and loans from other donor agencies.

Analysts said the increasing debt servicing has the potential to put the country once again in trouble while the only thing that may correct the situation was the effort to maintain and increase the foreign inflows.

The foreign debt of the country sharply rose during the last fiscal as the government borrowed from international donors to remain liquid for such huge payments while it has been facing current account deficits for years.

The foreign debt increased by $3.295 billion to $55.628 billion during the last fiscal. It included $8.077 billion IMF loan mostly received as the emergency loans to avoid default.

The foreign exchange liabilities of the country noted slight decline as it reached $1.122 billion from $1.274 billion a year ago.

According to the report, the amount paid by the country for debt servicing (principal plus interest) in fiscal 2010 was 43 per cent of the foreign exchange reserves reflecting the serious lack of depth in the country’s payment ability.

If the external flows come down due to certain reasons, the country might have to face the same situation as it did face in 2008. The last fiscal witnessed record inflows of $8.9 billion from overseas Pakistani workers, around $8 billion aid from IMF and inflows from other sources including US aid to help Pakistan fighting terrorism in its Northern areas.

These inflows saved Pakistan from widening of current account deficit which reduced to around $3.5 billion during the last fiscal. Analysts believe that situation like red alert is always there at the external front.

The higher debt servicing has been a serious problem for the country which used to force governments in Pakistan to get emergency help from the international donors like IMF.

The volume of debt servicing is rising each year with the increasing foreign debt. Next year the total debt repayment might be more than the payment of 2010 and the inflows could be less than last year which means sharp fall in the country’s foreign exchange reserves.

“The situation could be once again the same as it was in 2008 as the foreign inflows are not sustainable,” said Atif Ahmed, a currency expert.

He said both IMF loan and remittances could drop with their own reasons. Remittances might face decline due to global recession while the IMF has already paid over 60 per cent of emergency loan of $11.3 billion.

“The only possible way to avoid default like situation in future Pakistan will have to go for rescheduling of loans,” said Atif adding that in this case the loans would be costlier

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Re: Pakistani Economic Stress Watch

Postby BijuShet » 16 Nov 2010 23:51

From a 2008 Dawn article about Debt servicing.

Debt servicing eats up half of reserves {Non functioning URL so posting a cached version}
By Shahid Iqbal

KARACHI, Aug 9, 2008: The amount of debt servicing has increased to become the strongest contender for the dollar, the most precious item for Pakistan as rising oil bills already slashed the reserves to just half within ten months.

The State Bank reported on Saturday that the country paid $3.029 billion as the debt servicing for 2007-08, which is just half of the central bank’s foreign exchange reserves.

The huge outflow deprives the country by $350 to $400 million each week from its reserves pushing the country fast towards the old days when it was about to default during 1998-99.

The fast decline of reserves has already cast negative impact on value of the local currency against all foreign currencies. The rupee lost over 17 per cent against the dollar in last seven months.

“The Pak rupee has the lowest value against the dollar in the region as both India and Bangladesh have succeeded to tackle the bullish oil bills and kept their currencies stronger than ours,” said an analyst.

“If the country has to pay $3 billion as debt servicing this year, then it will have no reserves to pay back for its oil bills, meet the trade and current account deficits,” said the analyst.

Latest figures showed that the State Bank’s reserves, which are used to pay the foreign bills, fell to $6.968 billion till August 1, 2008.

Calculations made by research houses show that the country is bound to borrow to pay-off the debt servicing, which may increase this year.

“The rescheduling period of Paris Club loans will be over next year, which means that the country will have to pay much bigger amount as part of the principals of the loans that may increase the return on debt by $1 billion,” said the analyst.

The total loan of Paris Club is still $13.928 billion. The country’s total debt and liabilities have increased by $5.808 billion only last year making the total as $46.389 billion.

The Paris Club loans were rescheduled after the 9/11, which saved Pakistan from default. Then the country improved its foreign exchange reserves to $16.486 billion till October 2007.

However, the political instability slashed the inflows of foreign exchange in the country while the outflow through massive trade deficit, eroded the country’s reserves faster than ever to remain at $10.159 billion.

Over the 1980s, with the cold war in full swing, Pakistan had access to abundant foreign aid, which coupled with a large volume of remittances from expatriates, kept the growth of total debt in check.

The internal debt of the country has also been rising very fast as the government borrowed Rs689 billion from the State Bank alone during 2007-08.

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Re: Pakistani Economic Stress Watch

Postby svinayak » 17 Nov 2010 00:27

amit wrote:
I think the last bit is about to change. The military part will keep on due to their large military economic complex. But their ability to finance states like Pakistan to counter a rising power like India will become severely limited. That's going to be the game changer.

Pakistan is a side note for US military and economic growth in the next 25 years. If it becomes too expensive they will find a way for others to share the burden by creating the right crisis in the world.

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Re: Pakistani Economic Stress Watch

Postby harbans » 17 Nov 2010 05:39

^If Russia decides to partner NATO in Afghanistan as Bhadrakumar has stated in his article, then a supply route through Central Asia with Russia's influence is on the works. The US then can and will be able to concentrate more on extending the Predator influence..possibly right into the heart of Lahore and Muridke. God Bless Russia.

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Re: Pakistani Economic Stress Watch

Postby shiv » 17 Nov 2010 07:04

BijuShet wrote: This year TSP will pay 5.6 Billion USD (paid $4.632 billion as principal amount while $1.007 billion was paid as interest on the entire foreign debt and liabilities.) for its debt servicing. If all debt was forgiven then we would have 5.6 Billion sloshing in TSP's pot. Do you see the danger of leaving that much money on the table especially when it comes to TSP. Their debt burden is crushing them slowly and will only get worse. Why would we want to alleviate those troubles and allow them to spend the money elsewhere (i.e. use against us).


Pakistan's main lenders appear to be IMF and World bank. I don't know about ADB and there may be some bilateral agreements with China/middle east and Pakhanastan.

The "West" has 30+ percent stake in World Bank with the US having 16%. China has about 4%
In the IMF the US has 16% - with the "West" again having over 30%. China has 6%
ADB - Japan and the US - 30%. China nil. India has a stake.

The main losers in a loan write off to Pakhanastan would be the main stakeholders. And once the money is sloshing around in Pakistan, they will pay hard cash to China for arms. So a loan write off would no just be bad news for the main stakeholders - it would just make the illegal China-Pakistan nexus stronger. Of course in the long term what Amit said is right.

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Re: Pakistani Economic Stress Watch

Postby SSridhar » 17 Nov 2010 07:37

shiv wrote:ADB - Japan and the US - 30%. China nil. India has a stake.

China has a 5.9% share in ADB. Remember the successful Chinese objection to ADB funds for Arunachal Pradesh ?

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Re: Pakistani Economic Stress Watch

Postby vera_k » 17 Nov 2010 07:54

It looks like the export of fake currency notes is a serious Pakistani business. It is only a matter of time before they graduate to printing USD from INR.

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Re: Pakistani Economic Stress Watch

Postby shiv » 17 Nov 2010 08:02

vera_k wrote:It looks like the export of fake currency notes is a serious Pakistani business. It is only a matter of time before they graduate to printing USD from INR.


There might be Indian lack of foresight here. The US (I am old) has high tech notes. India does not even have that tech and the paper and much of the tech is implemented abroad. That is how Pakistan managed to get genuine Indian paper some years ago. That source may now have dried up - so they are using Paki paper the idiots.

The sooner India invests in indigenous production of the paper and high tech features - perhaps even embedded microchips the sooner India can screw Pakistan's fake currency business.

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Re: Pakistani Economic Stress Watch

Postby shiv » 17 Nov 2010 08:03

SSridhar wrote:
shiv wrote:ADB - Japan and the US - 30%. China nil. India has a stake.

China has a 5.9% share in ADB. Remember the successful Chinese objection to ADB funds for Arunachal Pradesh ?

OK there was some confusion in my Googal research. ADB was started by US, Japan and Taiwan.

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Re: Pakistani Economic Stress Watch

Postby BijuShet » 17 Nov 2010 20:37

SSridhar wrote:
shiv wrote:ADB - Japan and the US - 30%. China nil. India has a stake.

China has a 5.9% share in ADB. Remember the successful Chinese objection to ADB funds for Arunachal Pradesh ?


shiv wrote:OK there was some confusion in my Googal research. ADB was started by US, Japan and Taiwan.

Shivsaar check out the table in the link about ADB members, capital stock, and voting power (as of 31 December 2009)

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Re: Pakistani Economic Stress Watch

Postby Lalmohan » 17 Nov 2010 21:17

imagine if india moved to an e-cash environment - not so far fetched given the proliferation of mobile handsets and m-commerce in india
given the authentication and security systems in place, does it not greatly reduce the propensity for cash based infiltration?
side note - suddenly cash bribes will become remarkably de-valued...
(yeah i know, until they figure out the next scam...)

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Re: Pakistani Economic Stress Watch

Postby ramana » 17 Nov 2010 21:44

vera_k wrote:It looks like the export of fake currency notes is a serious Pakistani business. It is only a matter of time before they graduate to printing USD from INR.


Duringthe Afghan jihad against SU, the uS gave $20 printing blocks to the TSP to print the stuff. The proviso was that stuff whould not be circulated in US. If you recall a number of articles in the early 90s of fake $20 bills being picked up in Goa and other tourist destinations. Javed Naqvi used to follow the story a lot. Later the US changed $20 bill in mid-90s. So been there done that. It was the lack of action by US that encouraged the TSP to print Indian currency.


All this from a WSJ article on ALQ funding in the later 90s.

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Re: Pakistani Economic Stress Watch

Postby darshhan » 17 Nov 2010 22:33

^^Ramana ji.Is this true?

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Re: Pakistani Economic Stress Watch

Postby ramana » 17 Nov 2010 23:00

Boss with my own eyes I read the WSJ report in the late 90s. Then I understood the Javed Naqvi constant reports of fake $20 bills in Mumbai, Goa etc.

Naqvi (RNI) was trying to portary India as awash in fake notes..

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Re: Pakistani Economic Stress Watch

Postby darshhan » 18 Nov 2010 00:28

This was the height of short sightedness on the part of Americans(presumably CIA).This is truly out of world.A country giving its own printing press to another nation(that too a country like Pakistan) so that they can print fake dollars.God bless America.

By the way why was it done?Was it just to gratify different warlords and mujahideen?

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Re: Pakistani Economic Stress Watch

Postby Airavat » 18 Nov 2010 11:33

Pakistan has been ranked by the World Bank as the best place to do business in South Asia for three years in a row. The World Bank’s Doing Business Report, launched in 2002, compares the efficiency and enforcement of regulations that most commonly affect businesses, such as starting a company, registering property, paying taxes, etc.

The World Bank, along with leading institutional economists, argues that making government regulations simpler encourages more businesses to register and become part of the formal economy. Most estimates suggest that over half of Pakistan’s economy is undocumented.

The automation of the customs network, which allows the Karachi Port Trust to communicate directly with the terminal operators to compute customs liabilities, was viewed by the World Bank as an improvement, since it allowed for more efficient processing of cargo, allowing businesses to trade across borders faster. Most relevant for the country’s recent fiscal woes, Pakistan has ranked consistently near the bottom in the category of paying taxes, being ranked as one of the most difficult places in the world for businesses to pay taxes.

Best place to do business...........subject to the following constant:

Pakistan ranks second in terrorism risk after Somalia

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Re: Pakistani Economic Stress Watch

Postby symontk » 18 Nov 2010 13:00

Duringthe Afghan jihad against SU, the uS gave $20 printing blocks to the TSP to print the stuff. The proviso was that stuff whould not be circulated in US. If you recall a number of articles in the early 90s of fake $20 bills being picked up in Goa and other tourist destinations.


Not sure of this one, but heard that US had given dollar printing press to Iran and many of the US missions after the mullah take over was to get control of some part of it

Another is that during Vajpayee's regime, the indian notes were printed from europe and Pakistan managed to get hold of the press after this was stopped and that it explains the fake notes being better than RBI ones

May be this is all rumour, I dont think anyone would do that

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Re: Pakistani Economic Stress Watch

Postby SSridhar » 18 Nov 2010 13:03

ramana wrote:
vera_k wrote:It looks like the export of fake currency notes is a serious Pakistani business. It is only a matter of time before they graduate to printing USD from INR.


Duringthe Afghan jihad against SU, the uS gave $20 printing blocks to the TSP to print the stuff. . . . It was the lack of action by US that encouraged the TSP to print Indian currency.

Also, the RBI decommissioned a printing press which was disposed off carelessly (without destroying), that ended up with the Pakistanis, IIRC.

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Re: Pakistani Economic Stress Watch

Postby RamaT » 18 Nov 2010 13:38

Firstly, thanks for sharing the links and information in your posts.. I knew most of that story but that filled in some gaps. Sincerely appreciated.

shiv wrote:
RamaT wrote:
1. Oil shipped from the Arabian sea through them to China.
2. Mineral resource mining such as iron, copper, etc.

How can the above be countered by India?

Are there other angles that the Pakis are working with regards to China?


I see no practical way in which India can stop this. India can threaten, but India cannot do much without declaring war.

On the bright side I don't see anything of the sort happening as long as the US sits in Pakistan

Also on the bright side I don't see Pakistan providing the required security for China to pull this off - but let me make a separate (and repeat) post on this below.


(Limited) war is not too bad, one must have objectives and a plan to achieve them and then be good enough to execute. There are much worse things than having to inflict and feel a bit of short term pain than to have the larger strategic issue of Pakistan becoming a protectorate of China due to vested economic interests that we allow to develop.

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Re: Pakistani Economic Stress Watch

Postby RamaT » 18 Nov 2010 13:46

shiv wrote:Gwadar is currently a non starter for the Chinese.

I think a few things need to be summarized about Chinese connections to Gwadar
1) The US must leave first. Even if the US turns tail and runs - it will take at least till 2014
2) Pakis need to settle things with Balochis. I see no sign of that
3) After the US leaves he Chinese will have to build the infrastructure to connect Gwadar to China. Even at a blistering Chinese pace they have to work in Pakistan. Expect 3 years - after 2014 - that is 2017.


Working from your timeline, India has to have a mobile and effective force ready and able to be deployed by 2015 so that should those signs appear we take control of the Northern Areas, completely bisecting Pakis and Cheeni. This is assuming of course, that Pakistan has not abdicated that land to China by then, the PLA is already there, as documented.

I do not believe India will have the political will to anything along those lines before RG takes his throne.

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Re: Pakistani Economic Stress Watch

Postby RamaT » 18 Nov 2010 14:36

Re-thinking the whole situation WRT Gwadar and Chinese railway, there is another way. One which is more constructive between India and China and turns Pakistan into an area where China loses significant interest quite quickly.

http://en.wikipedia.org/wiki/Aikido

http://www.novinite.com/view_news.php?id=121602

http://www.mcclatchydc.com/2009/03/08/6 ... could.html

http://www.thehindu.com/business/Econom ... 878595.ece

Both India and China wish to exploit Afghan mineral wealth, India should embrace China and use its influence to assist them in doing so, and at the same time work with the Chinese to become part of the Asia-Europe rail link. Links should be built up through Jammu and Kashmir to link up through Chinese territory. At the same time a link south should be developed through Uzbekistan down to Mazar-e-Sharif(linking nearby copper deposits). If the Chinese should choose to continue this artery eastward through Afghanistan to Iran, perhaps even down to Chabahar then it's not something we should object to(the Khan's will.. oh well, the Russians will somehow have to be assuaged).

This gives the Chinese what they want, an overland route for oil(not the most efficient route, but much better than shipping via tanker), trains can roll it in the beginning.. pipelines can be laid parallel later. It gives India what it wants, resources from Afghanistan, a link to the CAR(albeit through China) that we have lost since '47 and the drive into irrelevance for Pakistani geographical stranglehold. Almost as important, this would give a long-term, 10 - 15 year project where India/China could work together positively.. very important to ratchet down mistrust IMHO.

If realized, this would turn Pakistan into a backwater that whose economy would wither and fail far quickly than other options presented now.

Other than geography(manageable) and an agreement between China/India(impossible?) what would hold this back?

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Re: Pakistani Economic Stress Watch

Postby amit » 18 Nov 2010 15:04

RamaT wrote:Re-thinking the whole situation WRT Gwadar and Chinese railway, there is another way. One which is more constructive between India and China and turns Pakistan into an area where China loses significant interest quite quickly.

http://en.wikipedia.org/wiki/Aikido

http://www.novinite.com/view_news.php?id=121602

http://www.mcclatchydc.com/2009/03/08/6 ... could.html

http://www.thehindu.com/business/Econom ... 878595.ece

Both India and China wish to exploit Afghan mineral wealth, India should embrace China and use its influence to assist them in doing so, and at the same time work with the Chinese to become part of the Asia-Europe rail link. Links should be built up through Jammu and Kashmir to link up through Chinese territory. At the same time a link south should be developed through Uzbekistan down to Mazar-e-Sharif(linking nearby copper deposits). If the Chinese should choose to continue this artery eastward through Afghanistan to Iran, perhaps even down to Chabahar then it's not something we should object to(the Khan's will.. oh well, the Russians will somehow have to be assuaged).

This gives the Chinese what they want, an overland route for oil(not the most efficient route, but much better than shipping via tanker), trains can roll it in the beginning.. pipelines can be laid parallel later. It gives India what it wants, resources from Afghanistan, a link to the CAR(albeit through China) that we have lost since '47 and the drive into irrelevance for Pakistani geographical stranglehold. Almost as important, this would give a long-term, 10 - 15 year project where India/China could work together positively.. very important to ratchet down mistrust IMHO.

If realized, this would turn Pakistan into a backwater that whose economy would wither and fail far quickly than other options presented now.

Other than geography(manageable) and an agreement between China/India(impossible?) what would hold this back?


So you really think China is a benign power do you? It will actually share mineral resource in Afghanistan and CAR with India and give up its interference in J & K and all after we give the "Chinese what they want"? Wow, man a leap of faith I must say.

In the 21 st century the biggest clash between India and China will occur in their race to corner resources. It's already starting to happen and it will get uglier as we progress. Just look at the latest Chinese admission about the Dam on the Bhramaputra.

And you want us to believe that if we are very nice to the Chinese and allow them free pass in Afghanistan and CAR, they would turn very nice and share resource from the two regions with us? Really this is hilarious, you actually believe the Chinese will give us access to CAR via its territory!

:rotfl:

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Re: Pakistani Economic Stress Watch

Postby shiv » 18 Nov 2010 15:27

RamaT wrote:Re-thinking the whole situation WRT Gwadar and Chinese railway, there is another way. One which is more constructive between India and China and turns Pakistan into an area where China loses significant interest quite quickly.
..
Other than geography(manageable) and an agreement between China/India(impossible?) what would hold this back?



Wrong thread. A land route via India (Karakoram pass) and via the North East to Kolkata/Chittagong would be sensible. But the Chinese have to be sensible.


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