Pakistani Economic Stress Watch

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anupmisra
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Re: Pakistani Economic Stress Watch

Postby anupmisra » 30 Jul 2018 21:51

Pakistan set to seek up to $12bn IMF bailout
Posting the article in full as this is a subscriber account. Also, read the comments.

https://www.ft.com/content/4421a5a8-917 ... 80cedcc421

Pakistan is drawing up plans to seek its largest ever bailout from the IMF, with senior finance officials set to present the option to Imran Khan soon after he takes office.

Any loan from the IMF, which officials believe is necessary to resolve the country’s escalating foreign reserves crisis, would see the fund impose restrictions on public spending. Such limits would make it difficult for Pakistan’s charismatic new leader to fulfil some of his election promises such as building an “Islamic welfare state”.

Mr Khan, Pakistan’s former cricket captain, spent the weekend negotiating with potential coalition allies after winning 115 seats — 22 seats short of a majority — and overturning decades of dominance by the country’s two main ruling families.

One government adviser said: “We are in a rough area and need help. I can’t imagine we could do that without the IMF’s support.”

The person said the country was likely to need a loan of between $10bn and $12bn — double the $5.3bn the fund lent the country last time in 2013 — in what would be Pakistan’s 13th IMF bailout.

During the election campaign, Mr Khan pledged to spend public money on providing access to healthcare for all, upgrading schools and expanding the social safety net.

But analysts warned these promises would be hard to fulfil given the reality of Pakistan’s economic situation. 

Pakistan’s foreign currency reserves have declined rapidly in recent months, as higher oil prices have pushed up the costs of imports, while exports continue to lag.

According to the latest published figures on July 20, the State Bank of Pakistan had just $9bn in reserves — not even enough to cover two months’ worth of imports.

So far, Islamabad has kept going with the help of loans from Beijing — it borrowed at least $5bn from Chinese commercial banks in the past financial year — and by allowing the Pakistani rupee to depreciate 20 per cent against the dollar. Western economists say they believe the currency is still overvalued and think it could fall at least another 10 per cent.

Mr Khan has not yet said how exactly he plans to deal with the balance of payments crisis he now faces, though he told the Financial Times shortly before the election that his shadow finance minister Asad Umar was developing a policy.

Many analysts, however, believe a return to the IMF is inevitable, and will come with damaging consequences for short-term economic growth and Mr Khan’s own political reputation.

They say the fund is likely to demand a range of actions in return for providing a bailout, including raising electricity tariffs, cutting subsidies for the agriculture sector and selling lossmaking public companies. This year the IMF projects that Pakistan’s fiscal deficit could hit 7 per cent, against a target of 4.1 per cent, meaning the fund is likely to demand deep cuts in planned public spending.

Charlie Robertson, global chief economist at Renaissance Capital, said this could lead to a 1 percentage point slowdown in gross domestic product.

“This is the first time Imran Khan gets his hands on power and he is going to have to make some very tough decisions. He will have to break election promises, at least in the short term,” Mr Robertson said.

One other option remains open to Mr Khan: he could seek to negotiate a deal with Saudi Arabia to defer oil payments, something the Gulf country agreed to in 1998.

Sakib Sherani, a former adviser to the finance ministry, estimated that energy-related imports could account for a third of the country’s total imports this year. “An economic slowdown may also curtail energy imports but still this would be huge,” he said.

Additional reporting by Shawn Donnan and Katrina Manson in Washington

Copyright The Financial Times Limited 2018. All rights reserved.


COMMENTS (214)
 
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Suggested IMF bail out conditionalities:

1) Stop supporting terrorism in Pakistan, and exporting it overseas. Disband terror groups and arrest all militants.

2) Disarm your nukes. Handover to the IEA and OPCW. To be overseen by the OSCE.

3) Put the military in the barracks, and ensure that parliament has control over the military and ISI ie parliament approves budgets, appoints/promotes generals and the director of the ISI

4) Break up state monopolies run by the military and introduce pro market reforms

5) Slash your defense spending by 80%, and enter into peace talks with India to ensure that each side respects each other's sovereignty (note point number 1 above)

6) Release all political prisoners including Nawaz Sharif and Balouch independence activists

7) Enter into peace negotiations with Balouch independence activists, and give them full autonomy (Pakistan army to be responsible for integrity of external borders, but under command of Balouch independence activists)

8) Undo Islamisation and Saudisation e.g. close all madrasas, ban the teaching of the quran and other religious texts that spread bigotry. 

9) Focus teaching on science and technology, not the hallucinations of a 6th century Arab warlord. Instead promote heroes such as Mandela, Martin Luther King, Gandhi and Dalai Lama who people should emulate.

10) Separate Islam from the state. Religion is a private affair and not a way of life. Ban blasphemy laws that target Christians, Sikhs and Hindus. Jinnah had wanted a secular state where Muslims would be the majority but all minority rights would be respected.

11) Take concrete steps towards inter community harmony where Islamic factions stop blowing up rival civilians and I could go on......Pakistan is in such a mess......


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kdr 7 minutes ago
Luckily, Bangladesh got out of Pakistan's clutches in 1971 and is doing pretty well economically. No panhandling here. The Pakistani Army's pogrom finished off 3 million muslims in Bangladesh. It was a heavy price to pay but they are reaping the rewards. We keep forgetting the large scale slaughter of fellow muslims by the Pakistani Army.https://en.wikipedia.org/wiki/1971_Bangladesh_genocide 


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kdr 19 minutes ago
One year's defense budget should solve the problem. 

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BlueCrow 1 hour ago
I wonder how much it costs them to maintain their nuclear deterrent...

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78654 39 minutes ago
@BlueCrow  not much at all sadly. Its relatively easy now that the hard work is done. They spend more on the army in general though.

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Blah Blah 13 minutes ago
@BlueCrow or their terrorist infrastructure 

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SPA 2 hours ago
Whats the big deal per person this is a fraction of what the European countries and US owes.

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kdr 22 minutes ago
@SPARight. But they issue debt which others buy. This is Pakistan's external debt in hard currency.  

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Blah Blah 10 minutes ago
@SPA but no one wants to lend them any money. people trust US and the EU, they are still reliable despite issues. Pakistan is a different case altogether. Even a Dolphin would have figured out what a scam CPEC is - classic "loan to own" but Pakistanis love nothing better than having a patron saint er...patron state. Pakistan would rather train its citizens to be terrorists than on anything useful such as science and tech. 

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Kaleem Mirza 3 hours ago
I doubt the US will bail out Pakistan through the IMF.

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kdr 21 minutes ago
@Kaleem Mirza  Tell that to Donald J Trump. It is only Xi who will be willing to waste Chinese people's hard earned money on this cock and bull venture. 

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Kaleem Mirza 3 hours ago
Pakistan needs comprehensive debt restructuring and reprofiling, arguably to go cap in hand to the IMF for the 13th time suggests deep-seated structural malaise in the economy.  Its time the citizenry of Pakistan wake up and realise the gravity of the underlying economic train wreck that is the Pakitan economy.  Weak governance, vested interests, rampant corruption and societal degradation is the legacy of 70 years democratic and, military rule.  It's time for a change!  Borrowing from abroad: remittances, WorldBank/IMF, KSA, UAE, China and expatriates have been the failed strategy of the last 70 years.  Pakistan is a bankrupt nuclear power.

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78654 38 minutes ago
@Kaleem Mirza  Also the official economic figures hide a massive black economy that accounts for a significant chunk of the real economy, if Pakistan government can bring this into the light and collect tax revenues, it won't need a bailout. But, that relies on getting the entrenched parasite class to start paying taxes.

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NJ Red Bank 4 hours ago
Country is roughly 70 years old. On its 13th IMF bailout, that is a bailout about every 5.3 years. Why does the IMF exist? Pakistan is a model of moral hazard.

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Hamlet 5 hours ago
« Many analysts believe that a return to the IMF is inevitable ». Return? Pakistan has been borrowing from the IMF for decades, never really paying back in full, always securing a new program to allow both Pakistan and its creditors to pretend that the country is honoring its commitments. Meanwhile, the reforms and spending controls supposed to be the conditions for the loans, are never really implemented.

And now again, when big repayments to the IMF are due the next few years, Pakistan wants to borrow yet again. And chances are good that Pakistan will get the new loans, for political reasons, because the US wants to keep Pakistan friendly in the fight aganst islamic extremists.

The IMF and the international community has long been taken for a ride. It is time to say no.

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askeptic 5 hours ago
@Hamlet

Good point.

And you never know, the IMF might spot your wise words, and offer you the job. I mean replace Mme Christian Legarde! Its not every day that a smart mind gets spotted.


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Hamlet 1 hour ago
@askeptic

Thanks but no thanks...too busy enjoying retirement.

Yes the IMF needs someone who is reasonably smart. As well as able to convince its biggest shareholders. Most of the time the Fund’s Management and Staff do a good job under difficult conditions, and they know what needs to be done even in the most desperate cases despite their many critics. However, Pakistan clearly ranks as one of the IMF’s really big embarrassments after so many lending arrangements.


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78654 35 minutes ago
@Hamlet  also don't forget a large chunk of any loans from the IMF gets eaten up by the endemic corruption across every strata of society in Pakistan.

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Itsacrazyworld 6 hours ago
The military theme here is not the most relevant one It is the spend vs income equation.

While the spend side of the Pakistan equation is bad (mismanagement, corruption etc), the real problem is the income side. Less than 1% of the population pay tax, the super rich often evade tax altogether, feudals and industrialists refuse to pay utility bills .... the list is endless.

Imran needs to enforce tax collection and the rule of law. This will help on both the spend and income part of the equation


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askeptic 6 hours ago
@Itsacrazyworld

With respect, you are deviating from editorial guidelines now ... 

The thesis to be established any which way is that Pakistan military is a really terrible thing, and all of us must do our best to do just that. "Relevance" etc are not a bar.


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1 Observer 3 hours ago
@askeptic @Itsacrazyworld I guess the point is that, in any case,  the military  was not a better economic manager (except perhaps under Ayub). e.g. they did not tackle the long term issues such as infrastructure. At the same time they stunted the development of democratic institutions.


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Re: Pakistani Economic Stress Watch

Postby dhyana » 31 Jul 2018 10:57

U.S.' Pompeo warns against IMF bailout for Pakistan that aids China

U.S. Secretary of State Mike Pompeo warned on Monday that any potential International Monetary Fund bailout for Pakistan’s new government should not provide funds to pay off Chinese lenders.


“Make no mistake. We will be watching what the IMF does,” Pompeo said. “There’s no rationale for IMF tax dollars, and associated with that American dollars that are part of the IMF funding, for those to go to bail out Chinese bondholders or China itself,” Pompeo said.


Wait, did the Land of the Pure think it could pis- off the US and still expect unfettered largesse from the international worthies (IMF, WB, etc.)? Me thinks the screws are slowly turning. Not to worry, their Iron Brother can bail them out with another high-interest commercial loan. GUBO indeed.
Last edited by dhyana on 31 Jul 2018 12:10, edited 1 time in total.

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Re: Pakistani Economic Stress Watch

Postby Neshant » 31 Jul 2018 11:56

China has no choice but to keep pouring money into Pakistan or risk seeing it's loans turn bad.

If they end up owning the infrastructure in lieu of debt default, it will be even more proof that OBOR is a debt trap scheme designed to transfer foreign assets to China's control. And if they don't own it, it will continue to operate in the red indefinitely with no prospects of loan repayment.

Then again, they have over-invoiced Pakistan by a factor of 5X for the infrastructure built so they may have already factored negative profitability into the deal.

China is hoping IMF will squeeze Pakistan to pay it's (China) loans. But that won't happen.

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Re: Pakistani Economic Stress Watch

Postby venug » 31 Jul 2018 14:59

https://twitter.com/chellaney/status/10 ... 61345?s=21
DEBT TRAP: One of the new Pakistani government's first tasks will be to seek a $12-billion IMF bailout to forestall a default. But Pompeo puts a spoke in the Pakistani wheel by saying US will oppose a bailout that seeks to pay off Pakistan's Chinese loans.
http://www.scmp.com/news/asia/south-asi ... money-goes

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Re: Pakistani Economic Stress Watch

Postby SSridhar » 31 Jul 2018 15:03

US warns against IMF bailout for Pakistan that aids China - reuters
US secretary of state Mike Pompeo warned on Monday that any potential International Monetary Fund bailout for Pakistan's new government should not provide funds to pay off Chinese lenders.

In an interview with CNBC television, Pompeo said the United States looked forward to engagement with the government of Pakistan's expected new prime minister, Imran Khan, but said there was "no rationale" for a bailout that pays off Chinese loans to Pakistan.

"Make no mistake. We will be watching what the IMF does," Pompeo said. "There's no rationale for IMF tax dollars, and associated with that American dollars that are part of the IMF funding, for those to go to bail out Chinese bondholders or China itself," Pompeo said.

The Financial Times reported on Sunday that senior Pakistani finance officials were drawing up options for Khan to seek an IMF bailout of up to $12 billion.

An IMF spokeswoman said: "We can confirm that we have so far not received a request for a Fund arrangement from Pakistan and that we have not had discussions with the authorities about any possible intentions."

Pakistan is struggling to avert a currency crisis that has presented the new government with its biggest challenge. Many analysts and business leaders expect that another IMF bailout, the second in five years, will be needed to plug an external financing gap.

Pakistan, which already has around $5 billion in loans from China and its banks to fund major infrastructure projects, had sought another $1 billion in loans to stabilize its plummeting foreign currency reserves.

Officials in the Trump administration, including U.S. Treasury Secretary Steven Mnuchin, have criticized China's infrastructure lending to developing countries, arguing that this has saddled them with unsustainable debt.

The $57 China-Pakistan Economic Corridor, a series of port and rail improvements associated with China's One Belt One Road infrastructure push, has led to massive imports of Chinese equipment and materials, swelling Pakistan's current account deficit.

Pakistan has had 14 IMF financing programs since 1980, according to fund data, including a $6.7 billion three-year loan program in 2013.

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Re: Pakistani Economic Stress Watch

Postby arun » 31 Jul 2018 15:47



US and the World will be right to keep close watch on the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan if the approach the IMF begging for a bailout. Just today news of fraudulent diversion of funds of a Multilateral Organization by the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan by has come in. Audit of World Bank borrowings by World Bank affiliate, Independent Evaluation Group (IEG), has led to “apprehensions that the money was simply used to enhance foreign exchange reserves and finance the budget”.

World Bank is not the first multi-lateral organisation victim of shenanigans of the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan. IMF has also been a victim back in the very late 90’s.

Today’s news of diversion of fraudulent World Bank funds:

World Bank’s policy loans worth $900m fail to achieve goals

IMF Press release of April 28, 2000 regards “misreporting of fiscal data to the IMF between 1997 and 1999”:

IMF NEWS BRIEF NO. 00/23 : IMF Executive Board Reviews Pakistan Misreporting, Remedial Steps

All the above without getting into “exaggeration and inflation” reported by NYT about the US getting swindled out of Coalition Support Funds (CSF) by Munna Major Non ANATO Ally, the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan.

U.S. Officials See Waste in Billions Sent to Pakistan

By DAVID ROHDE, CARLOTTA GALL, ERIC SCHMITT and DAVID E. SANGERDEC. 24, 2007 …..

In interviews in Islamabad and Washington, Bush administration and military officials said they believed that much of the American money was not making its way to frontline Pakistani units. Money has been diverted to help finance weapons systems designed to counter India, not Al Qaeda or the Taliban, the officials said, adding that the United States has paid tens of millions of dollars in inflated Pakistani reimbursement claims for fuel, ammunition and other costs.

NYT

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Re: Pakistani Economic Stress Watch

Postby Trikaal » 31 Jul 2018 17:39

No IMF bailout means either China pays up or Pakis go bust. Very real chance of a situation similar to Iran, Zimbabwe.

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Re: Pakistani Economic Stress Watch

Postby SSridhar » 31 Jul 2018 19:17

But, the US will eventually allow payments, with its pound of flesh (probably in Afghanistan) extracted.

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Re: Pakistani Economic Stress Watch

Postby sanjaykumar » 31 Jul 2018 19:30

Well let’s get on with partition of these reserves then.

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Re: Pakistani Economic Stress Watch

Postby abhijitm » 31 Jul 2018 20:50

Ain't we one of the sponsor of IMF? Don't we have a say in whom IMF bails out?

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Re: Pakistani Economic Stress Watch

Postby A_Gupta » 31 Jul 2018 20:54

https://bcfocus.com/news/pakistan-brink ... ike/19816/
Pakistan on the brink of an economic crisis; Cryptocurrency trade volumes start to spike
he Central Bank of Pakistan had released a statement in April saying Pakistan would not encourage the trade of cryptocurrencies within the country. However, this has hardly deterred the Pakistan crypto community, despite the increase in Bitcoin price lately. In addition to this, the central bank is making it extremely difficult for the citizens of Pakistan to access US dollars, according to report from Bloomberg.

This has caused a major hurdle in the cross border monetary transactions, which is why most of them are turning towards cryptocurrency for easier money transfer.


However, the above is at best a thermometer from which to gauge the crisis; the absolute volume of cryptocurrency trading in Pakistan is low.
https://www.forbes.com/sites/billybambr ... 1d21c04b44

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Re: Pakistani Economic Stress Watch

Postby chanakyaa » 31 Jul 2018 21:27


A successful experiment called Pakistan, first against India and now selectively against China will continue. Money to Napakis will continue to flow. What is interesting is how uncle quickly disassociated itself from Napakis only after ensuring that Napaki’s welfare was picked up by Eleven and that they wouldn’t be left high and dry. It is interesting how money works. The biggest contributor to EyeMF runs current account deficit which borrows from others to contribute to EyeMF.

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Re: Pakistani Economic Stress Watch

Postby souravB » 31 Jul 2018 21:58

abhijitm wrote:Ain't we one of the sponsor of IMF? Don't we have a say in whom IMF bails out?

USA alone has roughly 17% voting power and comprising it's NATO allies the number touches 40-45%. In contrast China alone has 6% vote, India has roughly 2.5%.
IMF voting rights

But rhetorics aside, USA has in the past and will bail out Pakis depending how much "Do more" it can wringe out from them. India will be a spectator and won't be able to do much as Pakis still can provide some strategic GUBO to Unkil. Now Unkil's interest does not necessarily align with our interest. While we may say all, Unkil is happy with selective few groups of peace lovers who comes to their backyard. No major change in Bakis is to be expected in this round of "Rona Dhona", will take 3-4 more iterations of this free-loading on the world for us to realize our ultimate goal.
Hoping to see Nuclear disarmament of Bakis in my lifetime. cheers.

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Re: Pakistani Economic Stress Watch

Postby Gagan » 31 Jul 2018 23:26

NaPaki is a financial black hole.
Massa has a 70 year tough experience managing this terrorist spewing migraine

They 400% encouraged NaPakis to go to the Chinese, and be their headache, and quickly walked out via the Patli Gali

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Re: Pakistani Economic Stress Watch

Postby Gagan » 31 Jul 2018 23:27

WRT People demanding that Khan saab make the rich, powerfool and Feudals pay taxes, will do well to remember that Niazi Saab is very likely a HUGE tax evader himself

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Re: Pakistani Economic Stress Watch

Postby Falijee » 31 Jul 2018 23:48

ACTUAL WORDS OF MIKE POMPEO , RE PAKI GOING TO IMF TO RELIEVE "FINANCIAL STRESS" . ABSOLUTELY NO DOUBT THAT MASSA WOULD EXTRACT A PRICE. AND NO ONE SHOULD BLAME THEM . YOU CANT BAD MOUTH YOUR BENEFACTOR AND EXPECT FINANCIAL RELIEF WHEN YOU NEED IT . THAT IS NOT HOW IT IS DONE IN WORLD AFFAIRS . ! NUCLEAR BLACKMAIL MAY NOT WORK THIS TIME :twisted:

What US actually said about IMF LoanEconomy and Business self.pakistan

submitted 6 hours ago by PCBciao444

I feel Dawn has deliberately misquoted the comments to create more drama.

MICHELLE CARUSO-CABRERA: One of the countries that's really gorged on One Belt, One Road is Pakistan. So much so they've taken on all kinds of debt. They might actually have to go to the IMF, the International Monetary Fund, for a bailout because they've taken on so much Chinese debt. The IMF is funded by U.S. taxpayer dollars. Many other countries as well, but if they go to the IMF for a bailout, there's a chance that U.S. taxpayer dollars are going to go towards Chinese directed companies as-- as part of that bailout. Are you concerned about that? Are you monitoring that?

MIKE POMPEO: So two thoughts. First, there's new leadership in Pakistan and we welcome engagement with them in a way that we think will benefit each of our two countries. Second-- make no mistake-- we will be watching what the IMF does. There's no rationale for IMF tax dollars-- and associated with that, American dollars that are part of the IMF funding-- for those to go to bail out Chinese bondholders or-- or China itself.

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Re: Pakistani Economic Stress Watch

Postby Gagan » 01 Aug 2018 00:43

Loaded question which could have had only one answer from Mike Pompeo.
Kudos to the questioner in this case

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Re: Pakistani Economic Stress Watch

Postby Gagan » 01 Aug 2018 01:09

The big question is, are the chinese physically or electronically transferring those Bailout Billions into a Pakistani Bank?
These are surely to show the world that there is some bank balance, Govt of Pakistan, most likely can't touch these funds.
I further suspect, that these funds remain in Hong Kong, and ISPR / Paki news papers say that a loan has been given to protect H&D

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Re: Pakistani Economic Stress Watch

Postby yensoy » 01 Aug 2018 08:15

Bloomberg articlehttps://www.bloomberg.com/view/articles/2018-07-31/pakistan-s-bailout-is-really-china-s

Pakistan's bailout is really China's
The IMF is encouraging moral hazard across the Belt and Road countries.

By Christopher Balding
August 1, 2018, 5:00 AM GMT+8


In all likelihood, Pakistan will seek a $12 billion bailout from the International Monetary Fund this week, its 12th since the 1980s and the largest one yet. This time, the IMF should think twice: Pakistan's debt crisis isn't the result of an economic shock. It's the result of reckless Chinese lending. Any new aid package will only worsen the risk of similar problems arising elsewhere.
...<snip>...
In considering its aid package, then, the fund should exclude any repayment of Chinese debt or demand an exceptional haircut on it. It must make clear that it distinguishes between commercial projects gone awry and foreign-policy ventures that look an awful lot like a debt trap. If China's leaders want to splurge overseas on dubious projects, that's their business. But the IMF shouldn't have to clean up when things go wrong.

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Pakistani Economic Stress Watch

Postby Peregrine » 02 Aug 2018 21:55

X Posted on the Ātaṅkavadīsthan Thread

Chinese and American Loan augments Terroristan's Reserves!

Foreign exchange: In a major relief, SBP's reserves surge 15% to $10.35b

KARACHI: In an interesting turn of events, the foreign exchange reserves held by the central bank have increased by a massive 14.86% on a weekly basis, according to data released on Thursday.

The development came after China announced that it would immediately give a $2-billion loan to Pakistan, a move meant to arrest the slide in official foreign currency reserves and provide much-needed breathing space to the new government.

According to officials in the Ministry of Finance, the loan will be categorised as official bilateral inflow. Over $1 billion has already been transferred to the State Bank of Pakistan’s (SBP) accounts.

On July 27, the foreign currency reserves held by the SBP were recorded at $10,349.7 million, up $1.34 billion compared with $9,010.7 million in the previous week.

The central bank attributed the increase to official inflows.

Overall, liquid foreign reserves held by the country, including net reserves held by banks other than the SBP, stood at $17,079.7 million. Net reserves held by banks amounted to $6,730 million.

Earlier, the reserves had dipped to alarmingly low levels, forcing the SBP to let the rupee depreciate massively on four separate occasions since December 2017, sparking concerns about the country’s ability to finance a hefty import bill and meet debt obligations in coming months.

In April, the SBP’s reserves had increased $593 million due to official inflows. Pakistan also raised $2.5 billion in November 2017 by floating dollar-denominated bonds in the international market in a bid to shore up official reserves.

A few months ago, the foreign currency reserves surged due to official inflows including $622 million from the Asian Development Bank (ADB) and $106 million from the World Bank. The SBP also received $350 million under the Coalition Support Fund (CSF).

In January, the SBP made a $500-million loan repayment to the State Administration of Foreign Exchange (SAFE), China.

Cheers Image

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Re: Pakistani Economic Stress Watch

Postby arun » 04 Aug 2018 09:53

Former IMF Executive Director representing the US writes an article titled “Pakistan, the United States, and the IMF”.

Informs that the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan “According to IMF data, the fund has had 21 programs with Pakistan since 1958, 14 of which since 1980.” The Islamic Republic is one hell of a serial, repeat and persistent borrower from the IMF.

Regards CPEC aka Conning Pakistan to Enrich China, Sobel has this to say:

“The fund must also ensure that its resources are not used to bail out unsustainable Chinese CPEC lending. The fund needs to have at its fingertips comprehensive data on all CPEC lending—its terms, maturities, and parties involved. Chinese lending should be on realistic terms and consistent with Pakistan’s sustainability. Otherwise, China should reschedule or write down its loans, sharply reducing the value of its claims.”

Pakistan, the United States, and the IMF

Sound advise but then the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan are known to lie about economic details and indeed the IMF was itself was victim. IMF Press release of April 28, 2000 regards “misreporting of fiscal data to the IMF between 1997 and 1999” follows:

IMF NEWS BRIEF NO. 00/23 : IMF Executive Board Reviews Pakistan Misreporting, Remedial Steps

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Re: Pakistani Economic Stress Watch

Postby isubodh » 04 Aug 2018 12:20

Prem wrote:Since inception , Pakistan have been living on borrowed money and time . The economic collaspe of Pakistan is not a question of if but when . Currently, The whole world is in financial turmoil and its adverse effect on Pakistan's viabilty is inevitable . Its time we start keeping vigil on Paki economic indicators and collect data for signs of this eventual failure .


What happens if IMF or similar institution doesn't bail out Pak ? Import stop, Inflation, Currency Devaluation. Then what ? Possible Civil war ? What are the implications for India ?

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Re: Pakistani Economic Stress Watch

Postby Trikaal » 04 Aug 2018 18:51

^No dollars means no imports. That means energy crisis. No fuel for vehicles, no electricity for factories. Currency devalues and hyperinflation sets in which makes food ridiculously expensive. Imports of all sorts stop and manufacturing sector collapses.

This can be prevented if Saudi start accepting payment in PkR and Chinese keep rewriting loans but none other than IMF can save them in the long run.

Implications for India is refugee crisis as hoardes of beggars try to cross in search of food and employment options. Basically think of a second Bangladesh on Western Front. Can be solved easily with some shooting practice, thanks to an already fenced border. Thar region could be somewhat tricky though.

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Re: Pakistani Economic Stress Watch

Postby A_Gupta » 04 Aug 2018 19:22

^^^ Pakistan threatens to sell nukes for hard currency to anyone, unless they are bailed out?

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Re: Pakistani Economic Stress Watch

Postby Trikaal » 04 Aug 2018 21:31

^In that case, Uncle Sam invades since most of the buyers have much bigger grudges against America. That will be a different can of worms.

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Re: Pakistani Economic Stress Watch

Postby arun » 07 Aug 2018 09:41

X Posted from the Terroristan thread.

anupmisra wrote:Pakistan may fail to persuade IMF for bailout, says EIU

Pakistan has adopted IMF’s financing programs 14 times since 1980.


https://www.thenews.com.pk/print/351500 ... t-says-eiu



The Mohammadden Terrorism Fomenting Islamic Republic of Pakistan is lot more dedicated serious serial, repeat and persistent borrower from the IMF then The News suggests.

“According to IMF data, the fund has had 21 programs with Pakistan since 1958, 14 of which since 1980.”

Mark Sobel :

Pakistan, the United States, and the IMF

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Re: Pakistani Economic Stress Watch

Postby Arima » 07 Aug 2018 12:07


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Re: Pakistani Economic Stress Watch

Postby A_Gupta » 07 Aug 2018 15:24

June news item
http://www.4-traders.com/EXXON-MOBIL-CO ... -26798198/

PS: the find does not reflect in XOM stock price.

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Re: Pakistani Economic Stress Watch

Postby hanumadu » 07 Aug 2018 15:39

Arima wrote:Pakistan: Exxon Is Close To Making A Mega Oil Discovery

https://oilprice.com/Energy/Crude-Oil/Pakistan-Exxon-Is-Close-To-Making-A-Mega-Oil-Discovery.html


Damn, god is cruel. Giving oil to the worst scum in the world.

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Re: Pakistani Economic Stress Watch

Postby Viv S » 07 Aug 2018 15:47

Largest oil reserves found in Pakistan? Here’s why this may be fake news - Daily Pakistan

The financially-strapped Pakistanis were left pleasantly surprised after being informed by leading media outlets that largest oil reserves have been unearthed in the country, however, the ground realities confirm that the piece of news might appear to be fake.

Pakistani media is currently flooded with speculative and fake news owing to the fraught election season and possible appointments in days to come, however, one of the news story carried by multiple media outlets quoted minister for Maritime Affairs and Foreign Affairs Abdullah Hussain Haroon, as saying that ExxonMobil (multinational oil and gas company) has indicated that it was close to hitting huge oil reserves near the Pak-Iran border, which could be even bigger than the Kuwaiti reserves.

Though Haroon made the comments on Friday while addressing business leaders at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) adding that the government had already taken an undertaking from the company to set up a generation complex worth $10 billion.

However, the statement seems contrary to the facts and virtually another piece of FAKE news, an indication of which is multiple factors.

Firstly, ExxonMobil is not operating in Balochistan province and is not involved in any exploration. It is only working on an offshore field with ENI, PPL, and OGDC with a 25 percent interest.

Secondly, Pakistan Petroleum Information Service, which keeps a record of explorations in the country, has not mentioned the ‘so-called’ discovery of huge oil reserves on its website.

The oil discovery is reminiscent of the major reserves of gold, silver, copper and iron ore which were claimed to have been discovered from Punjab’s Chiniot district in 2015.

At that time, then Prime Minister Nawaz Sharif, chief minister Punjab Shehbaz Sharif and notable scientists felicitated the nation, with a hope that the minerals would boost the economy of the country, however, what happened to the discovery, is still unknown to many.

“The discovery of gold is a blessing of Allah Almighty,” chief minister Punjab had said at that time.

Moreover, Dr Samar Mubarkiman, a scientist who was assigned the task of processing the Chiniot project also confirmed the presence of gold and silver deposits, however, nothing substantial followed, three days after the exploration.

The discovery of huge Oil reserves and its exploration by ExxonMobil seems to be factually wrong despite the fact that the all-aware minister has confirmed the development.

Interestingly, ExxonMobil acquired a 25 percent stake in offshore drilling in Pakistan in May this year for which a ceremony was organized in the PM House between Government Holdings Private Limited (GHPL), PPL, ENI, OGDC and Exxon Mobil.

Previously, Italian energy giant Eni, Pakistan Petroleum Limited (PPL) and Oil and Gas Development Company (OGDC) held 33 percent share each in offshore drilling in Pakistan but the agreement restricted the share of the remaining three companies to 25 percent each.

ExxonMobil has major experience in the realm of offshore drilling, however, it has neither listed Pakistan on its website nor shared the news about the discovery of ‘huge oil reserves’ near the Pak-Iran border.

The impetus for disseminating such information, which is apparently contrary to the facts, might be to create a positive impression in the Oil and Gas market, however, when the reality comes to the fore, the investors are left high and dry.

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Re: Pakistani Economic Stress Watch

Postby Viv S » 07 Aug 2018 15:54

Offshore Indus Block G of which ENI & ExxonMobil are stakeholders, is south south-west of Karachi, nowhere near the Iranian border.

Not that oil should matter to Pakistan given that the incredible & innovative water-kit was invented there. Offering a superb mileage of 40 km per litre... of water.
Last edited by Viv S on 07 Aug 2018 17:12, edited 1 time in total.

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 07 Aug 2018 16:23

hanumadu wrote:Damn, god is cruel. Giving oil to the worst scum in the world.


No worries. God has a plan.

Ancient proverb - "Those whom the gods wish to destroy they first make mad." (or give them a loaded gun and monkey's brain!)

Golda Meir famously quipped - “Moses dragged us for 40 years through the desert to bring us to the one place in the Middle East where there was no oil”

Look at where Israel is today compared to her neighbors.

No worries.

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Re: Pakistani Economic Stress Watch

Postby Trikaal » 07 Aug 2018 16:44

Most of iran's oil fields are close to it's western border. Iran doesn't have a single oil field on baluchistan border. So how can Pakistanis find the largest oil field in baluchistan when iran has found nothing there? These fake news emerge all the time from baluchistan. In a few years they will start finding uranium deposits in baluchistan too

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Re: Pakistani Economic Stress Watch

Postby souravB » 07 Aug 2018 19:34

I wish they find oil there. they would then be sandwiched between Unkil and Cheen. If Russia joins then..... we have too many examples like Iraq and Venezuela to ignore them as coincidence. It is strategically imperative to keep the oil rich countries broiled in war. If Pakis don't have attention now, they will have it then. Baluchistan freedom movement will have more supporters. :D

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Re: Pakistani Economic Stress Watch

Postby Virendra » 16 Aug 2018 21:29

souravB wrote:I wish they find oil there. they would then be sandwiched between Unkil and Cheen. If Russia joins then..... we have too many examples like Iraq and Venezuela to ignore them as coincidence. It is strategically imperative to keep the oil rich countries broiled in war. If Pakis don't have attention now, they will have it then. Baluchistan freedom movement will have more supporters. :D

It is however, not strategically beneficial for India. To wish for such voltage global boxing to happen right at its doorstep.
Pakis should be put down, but in a way that at least tries to minimize harm to our own national interests.
What will burn in this scenario is Baluchistan, not Pakistan.

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Re: Pakistani Economic Stress Watch

Postby Virendra » 16 Aug 2018 21:38

Trikaal wrote:^No dollars means no imports. That means energy crisis. No fuel for vehicles, no electricity for factories. Currency devalues and hyperinflation sets in which makes food ridiculously expensive. Imports of all sorts stop and manufacturing sector collapses.

This can be prevented if Saudi start accepting payment in PkR and Chinese keep rewriting loans but none other than IMF can save them in the long run.

Implications for India is refugee crisis as hoardes of beggars try to cross in search of food and employment options. Basically think of a second Bangladesh on Western Front. Can be solved easily with some shooting practice, thanks to an already fenced border. Thar region could be somewhat tricky though.

Thar is a desert (you know that). With proper surveillance and tight control on the sparse towns, sub urbs. Situation can be controlled.

Whichever way Pakis implode and whenever it happens. Regardless, there will be a guaranteed refugee crisis for us.
So honestly, this should be a matter of proactive moves and preparation for our government.

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Re: Pakistani Economic Stress Watch

Postby souravB » 16 Aug 2018 23:37

Virendra wrote:It is however, not strategically beneficial for India. To wish for such voltage global boxing to happen right at its doorstep.

It might be, if we play our cards right. There is already a freedom struggle brewing in Balochistan, if they have oil their narrative will get focus from the powers be and with some diplomatic clout we might call them as Freedom fighters.
Now, once that happens Sindh and KPK will also follow suit. In any case there will always be a buffer country between Balochistan and India.
And most importantly we'll gain a friendly country with oil deposit.
But alas this news it seems is a hoax just like the mountain of gold. :cry:

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Re: Pakistani Economic Stress Watch

Postby Trikaal » 17 Aug 2018 07:01

These balochis smoke hashish and then start seeing all sorts of things- mountains of gold, fountains of oil, 72 virgins, etc. Need to take their claims with a bucket of salt.

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Re: Pakistani Economic Stress Watch

Postby dhyana » 17 Aug 2018 08:21

Pakistan’s economic crisis and the IMF

More elucidation of the oxymoronic lunacy that masquerades as "Paki Economic Planning"...

The immediate reasons for the current crisis can be found in hugely misconceived energy policy and power projects. Former Prime Minister (PM) Nawaz Sharif’s government wanted to build additional power generation capacity in a short period to alleviate the country’s chronic power shortage problem. It approved 21 power projects at an expected total cost of $35 billion. These plants were mainly to be fueled by imported coal. Not all of this $35 billion “investment” is in the form of equity. The debt to equity ratio for many of the power projects is 75 percent debt and 25 percent equity with the return on invested equity reported to be as high 34.5 percent.


Pakistan, for decades, has followed a set of policies that have encouraged investments in real estate, guaranteed profit projects, and industries enjoying unfair tax exemptions. This has discouraged industrialisation on a broader scale and contributed to Pakistan’s failure to achieve the high growth rates and to its poor exports record. Since 1980, exports from India and Bangladesh have grown at a rate that is more than five times that of the growth of Pakistani exports.


why these power projects (which account for over 50 percent of investments go through the $62 billion CPEC program for Pakistan) are not investments. It is a misnomer to call anything a “private investment” when profit is guaranteed by the government. This is the case with almost all CPEC power projects because the equity holders are guaranteed to earn rates of return believed to range from 17 to 34 percent. Such “investments” are, in effect, quasi (government) debt because the government is obligated to pay an agreed internal rate of return on invested equity regardless of whether the projects actually make money.


Morons.

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Re: Pakistani Economic Stress Watch

Postby arun » 17 Aug 2018 18:18

While the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan finds no mention in the below graphic culled from Economic Times (IMF metric hints RBI has more ammunition to defend the rupee) being posted to show how precarious the foreign exchange reserves situation in Pakistan is with Pakistan even trailing much stressed Brotherly Momin 4.5 friend Turkey who is headed IMF's way. Thus among the BRICS India rounding to 2 decimal places is at 1.51 and trails Russia who are in a very sound position of 2.77. Turkey is a precarious 0.74 and the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan is at 0.43.

The IMF states “Assessing Reserve Adequacy (ARA) dataset presents a new measure for assessing adequacy of reserve holdings”:

Image

For data on the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan who are too pissant to make the above graphic and for that matter India’s and 76 other Emerging Market countries as well, see IMF website here:

IMF : Ratio of reserve/ARA metric


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