Pakistani Economic Stress Watch

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Shanmukh
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Re: Pakistani Economic Stress Watch

Postby Shanmukh » 02 Oct 2018 23:56

Peregrine wrote:"Therefore, we have reduced the loan from China under CPEC for rail projects from $8.2 billion to $6.2 billion," he added, referring to the China-Pakistan Economic Corridor (CPEC).

Rasheed said the government remains committed to the Karachi-Peshawar Main Line-1 (ML-1) project but added that he wishes to further reduce the cost to $4.2 billion from $6.2 billion.


Thanks very much, Peregrine-garu. Does anyone have the actual plan to reduce the money from 8.2 billion to 4.2 billion? I confess I am very interested in knowing how they actually plan to reduce the costs by this much. Are they going to build only one rail, as opposed to the two rails currently planned? Are they going to build rails in recycled plastic instead of steel?

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Re: Pakistani Economic Stress Watch

Postby Aditya_V » 03 Oct 2018 11:55

I think they can just take the Fauji cut and kickbacks and abandon the actual "project".

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Re: Pakistani Economic Stress Watch

Postby Vips » 03 Oct 2018 18:38

Shanmukh wrote:
Peregrine wrote:"Therefore, we have reduced the loan from China under CPEC for rail projects from $8.2 billion to $6.2 billion," he added, referring to the China-Pakistan Economic Corridor (CPEC).

Rasheed said the government remains committed to the Karachi-Peshawar Main Line-1 (ML-1) project but added that he wishes to further reduce the cost to $4.2 billion from $6.2 billion.


Thanks very much, Peregrine-garu. Does anyone have the actual plan to reduce the money from 8.2 billion to 4.2 billion? I confess I am very interested in knowing how they actually plan to reduce the costs by this much. Are they going to build only one rail, as opposed to the two rails currently planned? Are they going to build rails in recycled plastic instead of steel?


As expected the Chinese are not willing to loosen the painful Danda.

The minister dodged questions when asked how the cost of Main Railway Line (ML-I) had been reduced by $2 billion from $8.2 billion to $6.2 billion as claimed by Railways Minister Shaikh Rasheed Ahmed.

"I have noticed this today that Sheikh Rasheed is making some efforts (to reduce the cost) but not to my knowledge. Nothing has come in front of me to suggest that the cost has come down," he said. :rotfl:

Bakhtiar said there could be many offshoots of the CPEC where third countries could be involved in trilateral arrangement for infrastructure development, like China-Pakistan-Japan, China-Pakistan-Saudi Arabia or China-Pakistan-Germany. (The beggars sure dont dream small)


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Re: Pakistani Economic Stress Watch

Postby Peregrine » 03 Oct 2018 19:46

Shanmukh wrote:
Peregrine wrote:"Therefore, we have reduced the loan from China under CPEC for rail projects from $8.2 billion to $6.2 billion," he added, referring to the China-Pakistan Economic Corridor (CPEC).

Rasheed said the government remains committed to the Karachi-Peshawar Main Line-1 (ML-1) project but added that he wishes to further reduce the cost to $4.2 billion from $6.2 billion.


Thanks very much, Peregrine-garu. Does anyone have the actual plan to reduce the money from 8.2 billion to 4.2 billion? I confess I am very interested in knowing how they actually plan to reduce the costs by this much. Are they going to build only one rail, as opposed to the two rails currently planned? Are they going to build rails in recycled plastic instead of steel?
Shanmukh Ji :

I will believe "The Rail Project" will only be on paper and the money will be in the pockets of Rashid and the other of the Ilk!

Cheers Image

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Re: Pakistani Economic Stress Watch

Postby dhyana » 04 Oct 2018 01:32

Pakistan to be fourth most populous nation by 2030

Climate woes & population

Their own experts predict that The Land of The Pure's population will overtake that of Indonesia shortly. Way too many abduls for comfort on our border. But, the CPEC will magically take care of all their problems.

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Re: Pakistani Economic Stress Watch

Postby Prem » 04 Oct 2018 02:17

dhyana wrote:Pakistan to be fourth most populous nation by 2030

Climate woes & population

Their own experts predict that The Land of The Pure's population will overtake that of Indonesia shortly. Way too many abduls for comfort on our border. But, the CPEC will magically take care of all their problems.

With actual growth rate of little above 3 %,By 2030, Paki will be close to 330 Million and 400 Million by 2035 .
By then Indian GDP will be crossing 20 Trillion while Paki Economy will be equal to Diwali celebration .

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Re: Pakistani Economic Stress Watch

Postby Vips » 04 Oct 2018 18:58

How Pakistan fell into China’s debt trap.

The figures by the State Bank of Pakistan show that China's bi-lateral debt to Pakistan stood at 7.2 billion USD by June 2017 and this increased by over 3 billion USD in four years. Moreover the currency swaps in Pakistan stood at 1.5 billion USD, which in turn took the figures to 8.7 billion USD.

The Industrial and Commerce Bank of China, Pakistan branch secured a loan of 2.7 billion USD from its parent firm and later swapped it with the Pakistan rupee and this took the debt up to 12.1 billion USD.

A report in the http://www.cadtm.org says that in addition to this, Pakistan's debt liabilities to direct investors from China stood at around 3.5 billion USD and the biggest investment in the last few years is from China mobile adding to the total amount of 17.1 billion USD. Pakistan's debt liabilities have risen from 83 billion USD to 88.9 billion USD until December 2017 and the amount has grown further after that.

The report while citing experts says that Pakistan will have to pay back 100 billion USD by 2024 of the total investment of 18.5 billion USD, which China had invested on account of banks loans in 19 early harvest projects most of them relating to the energy sector under CPEC. The interest on these loans will be around 7 per cent per annum payable in 25 to 40 years and this would mean Pakistan would be paying China around 8 billion USD per year starting 2018 for the next 43 years, the report further notes.


:rotfl:

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Re: Pakistani Economic Stress Watch

Postby Supratik » 04 Oct 2018 19:03

Fooked.

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Re: Pakistani Economic Stress Watch

Postby Shanmukh » 05 Oct 2018 00:14

Peregrine wrote:
I will believe "The Rail Project" will only be on paper and the money will be in the pockets of Rashid and the other of the Ilk!

Cheers Image


The next few PMs of Pakistan will have a blast of a time with this repayment to Chinese on the horizon. They should advertise it as `Come and have a blast, it may be your last.' :lol:

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Pakistani Economic Stress Watch

Postby Peregrine » 05 Oct 2018 16:24

Peregrine wrote:I believe "The Rail Project" will only be on paper and the money will be in the pockets of Rashid and the other of the Ilk!
Cheers Image
Shanmukh wrote:The next few PMs of Pakistan will have a blast of a time with this repayment to Chinese on the horizon. They should advertise it as `Come and have a blast, it may be your last.' :lol:
Shanmukh Ji :
AAP KI SEVA MEIN :

X Posted on the Terroristan Thread

IMF only viable option, PM Imran Khan told - Shahbaz Rana

ISLAMABAD: An International Monetary Fund (IMF) bailout package remains the only viable option for Pakistan to arrest deterioration in macroeconomic situation and restore shattering confidence of markets, Pakistan’s negotiating team informed Prime Minister Imran Khan on Thursday.

Khan was chairing a meeting on the IMF programme, which was attended by Finance Minister Asad Umar, the State Bank of Pakistan (SBP) Governor Tariq Bajwa and Adviser to PM Dr Ishrat Husain.

The briefing took place on the day when the SBP announced that official foreign currency reserves have dropped to nearly four years low of just $8.4 billion. Last time, on November 21, 2014, the country’s reserves had slid to $8.5 billion.

Pakistan needs to raise $20b to avoid payment crisis

A Pakistani team that held negotiations with the IMF from September 27 to October 4, briefed the PM about the outcomes of the talks, said sources in the Finance Ministry. The PM was said to be told that in order to restore confidence of the market the IMF was the only option. It remains to be seen if the IMF will makes its LOAN subject to the Condition that the IMF LOANS not to be used to "Repay CPEC-OBOR-other Chinese or Saudi Arabian Debts

The premier was also told that no major and continued financial relief was in sight from the friendly countries. On its part, the IMF has also reached to a conclusion that fund was the last viable option for Pakistan, as the Pakistani authorities could not share a concrete plan that could ensure smooth flow of dollars to meet international debt obligations, said sources in an international financial institution.

Pakistan is in search of at least additional $11 billion in next nine months to repay its old debts and finance the imports. The IMF team was led by its Washington-based mission chief Harald Finger. The Pakistani side was represented by officials from the SBP and the Ministry of Finance.

The PM did not immediately take a decision on putting a formal bailout request to the IMF. Sources said the PM is still hopeful that Saudi Arabia and China will temporary bailout Pakistan but claimed that recent developments in connection with the China-Pakistan Economic Corridor (CPEC) have made both Beijing and Riyadh uncomfortable.

Imran Khan will share his mind on the IMF package in the next few days, a senior government functionary told The Express Tribune on condition of anonymity.

IMF conditions

One of the reasons for pending a decision is the IMF’s harsh condition that Pakistan should adopt a free float exchange rate regime rather than the existing managed exchange rate. Under the managed exchange rate regime, the SBP is still pumping its already sacred foreign exchange reserves in market.

The sources said this is also one of the reasons behind $627million reduction in the reserves in just one week that ended on Sep 28, reducing the gross official reserves to just $8.4 billion. They said the IMF projected a fair value of rupee above Rs145 to a dollar as against the current rate of Rs125 to a dollar.

The sources said the second tough condition of the IMF is to increase the interest rates at least minimum 2.5% to 4%. At present, the key interest rate is 8.5%, which the IMF wants to see in the range of 11% to 12.5% to contain inflation and narrow down current account deficit.

During the concluding session, Asad Umar told the IMF that Pakistan will have to see whether the government can raise 4% interest rates. The minister also said the government would also have to review whether it can implement a free float exchange rate regime. Neither the finance minister nor the spokesman of the Ministry of Finance responded to the requests for comments.

IMF request for CPEC contract details declined

The sources said Asad Umar told the IMF team that Pakistan wanted to follow a structural reforms programme that could ensure sustained economic growth.

The IMF’s other conditions are enactment of the Public Finance Management law and a clear roadmap for implementation of Financial Acton Task Force (FATF) plan. The IMF also wants that Pakistan should lower the flow of the circular debt from over Rs625 billion to around Rs350 billion.

The IMF’s assessment is that if Pakistan did not immediately pick its option to handle the crisis, the balance of payments position would further worsen. The sources said in case Pakistan did not opt for an IMF package, some of the projected loans from the World Bank and the Asian Development Bank would not materialize. This would expand the financing gap beyond $12 billion.

The IMF has termed recent fiscal and monetary adjustments by Pakistan inadequate. The IMF assessed that the budget deficit may widen to over 5.5% of the gross domestic product (GDP) or Rs2.1 trillion, even after the additional revenue measures introduced through a mini-budget.

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Re: Pakistani Economic Stress Watch

Postby arun » 05 Oct 2018 18:56

IMF staff teams press release datelined October 4, 2018 conveying their preliminary findings after a visit to the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan.

Affirms that the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan has no option but to thrust out its much refurbished green kaashkol and plead for alms even while pursuing a Mohammadden supremacist line claiming it is a case of Kaafirs parting with jaziya out of fear of the Sole Islamic Nuclear Weapon State :lol: .

No mention that the IMF is fearfully or otherwise going to replenish the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan’s much patched green kaashkol with this self- claimed jaziya 8) .

IMF Staff Concludes Visit to Pakistan
October 4, 2018

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.

*Pakistan is facing significant economic challenges, with declining growth, high fiscal and current account deficits, and low levels of international reserves.

*Recent policy measures are steps in the right direction, but not yet sufficient. Decisive policy action and significant external financing will be needed to stabilize the economy.

*Once stabilization is beginning to take hold, increasing focus is warranted on critical reforms to foster sustained and inclusive growth and strengthen institutions.

A staff team from the International Monetary Fund (IMF), led by Harald Finger, visited Islamabad from September 27-October 4, 2018 to discuss Pakistan’s economic situation and exchange views on necessary policies for economic stabilization and sustainable and inclusive growth. At the end of the visit, Mr. Finger made the following statement:

“Pakistan is facing an increasingly difficult economic situation, with high fiscal and current account deficits, and low international reserves. This mostly reflects the legacy of an overvalued exchange rate, loose fiscal policy and accommodative monetary policy. The fast rise in international oil prices, normalization of US monetary policy, and tightening financial conditions for emerging markets are adding to this difficult picture. In this environment, economic growth will likely slow significantly, and inflation will rise.

“The team welcomes the policy measures implemented since last December. These include 18 percent cumulative depreciation of the rupee, interest rate increases of cumulatively 275 bps, fiscal consolidation through the budget supplement proposed by the minister of finance, a large increase in gas tariffs closer to cost recovery levels, and the proposed increase in electricity tariffs. These measures are necessary steps that go in the right direction.

“Additional decisive policy action, anchored in a comprehensive strategy, and significant external financing will be needed in the near term. Policies should include more exchange rate flexibility and monetary policy tightening, further fiscal adjustment anchored in a medium-term consolidation strategy, and strengthening the performance of key public enterprises together with further increases in gas and power tariffs. Together, these steps would help reduce current account pressures and improve debt sustainability. Importantly, to protect the more vulnerable segments of society, there is a need to further strengthen social protection through the Benazir Income Support Program. These policies will help stabilize the economy and lay the foundations for sustainable and inclusive growth.

“Once stabilization is beginning to take hold, the focus should increasingly shift to reforms to foster sustained and inclusive growth and strengthen key institutions. Priority areas include modernizing the tax system and public financial management, strengthening fiscal federalism arrangements, improving governance and eliminating losses of public enterprises, enhancing the SBP’s autonomy, intensifying AML/CFT efforts, improving the business climate and anti-corruption efforts, and fostering the economic inclusion of the poor, youth, and women.

“The team is grateful to the authorities for open and constructive discussions. The team met with Minister of Finance, Revenue and Economic Affairs Asad Umar; Minister of Planning Khusro Bakhtiar, Advisor to the Prime Minister for Commerce Abdul Razak Dawood, Advisor to the Prime Minister for Institutional Reforms and Austerity Ishrat Hussain, SBP Governor Tariq Bajwa, Finance Secretary Arif Ahmed Khan, FBR Chairman Mohammad Jehanzeb Khan, other senior officials, and representatives of the private sector and development partners.”

IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: RANDA ELNAGAR

PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG


From IMF Website :

IMF Staff Concludes Visit to Pakistan

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Re: Pakistani Economic Stress Watch

Postby Trikaal » 05 Oct 2018 19:29

Summary:
IMF wants Pkr to be devalued to 150 Pkr to a dollar
IMF wants Interest rates to rise above 10%
IMF wants Pakistan to make public CPEC-OBOR bill amount and terms(because that is what it is, a bill, not an investment or a loan)

All 3 are like body blows to Paki economy and prestige. They might survive but they will be belly crawling for a long time.

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Re: Pakistani Economic Stress Watch

Postby Neshant » 06 Oct 2018 19:29

Interesting that China will not front more money to Pakistan.

Despite the massive over-charging China has done on CPEC projects, it won't write down Pakistan's debts by any significant amount.

Instead it wants IMF to do the dirty job of squeezing Pakistan to get the govt to increase taxes and tighten belts hoping it can then get the money it loaned to Pakistan back.

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 06 Oct 2018 19:53

Neshant wrote:

Interesting that China will not front more money to Pakistan.


Cheena would love to (lend, but not invest) but the pakis are the ones who declined. Investments as equity would be a straight writeoff on a bad deal but loans will stick with the deal until they are settled (almost always in favor of the lender).

Despite the massive over-charging China has done on CPEC projects, it won't write down Pakistan's debts by any significant amount.

Yes, they won't. That has been their game plan all along. Unpaid debt and subsequent (but expected) default will give the cheenis the right to call in the note and take ownership of the asset which would have been fronted by the pakis as collateral. That's how the cheenis did it in Siri Lankah and Zambia! SeePack is a land grab scheme. It has been one since day one when duspercenti suggested it first.

Instead it wants IMF to do the dirty job of squeezing Pakistan to get the govt to increase taxes and tighten belts hoping it can then get the money it loaned to Pakistan back.

Actually, the cheenis were initially dead set against IMF stepping in for tactical reasons. Pakis would have to disclose all the terms of the SeePack loans. But with the saudis and qataris backing off, IMF is the only way out. With the IMF, I am very curious to learn more about the lending terms and the promised returns.

By the way, a cheeni business colleague of mine said to me the other day that calling china, cheena, is an insult to the cheenis. Why? That's what the Japanese called them during the occupation. Cheena is a derivation of the Sanskrit name Cina.

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 06 Oct 2018 19:56

arun wrote:
IMF Staff Concludes Visit to Pakistan
October 4, 2018

IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: RANDA ELNAGAR


Couldn't have picked a better press officer to press home the GUBO session.

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Re: Pakistani Economic Stress Watch

Postby nam » 06 Oct 2018 20:01

With the Pak going international with their bowl, time for us to speed up BMD test and announce some major arms purchase like we did with S400.

Hope GoI & Services announce these, along with some ratcheting up of threat of more Surgical strikes and hammering on LoC

We want the Pak to spend more cash on buying arms.

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Re: Pakistani Economic Stress Watch

Postby Trikaal » 06 Oct 2018 23:47

nam wrote:With the Pak going international with their bowl, time for us to speed up BMD test and announce some major arms purchase like we did with S400.

Hope GoI & Services announce these, along with some ratcheting up of threat of more Surgical strikes and hammering on LoC

We want the Pak to spend more cash on buying arms.

If they don't have cash, how will they respond? Instead we should time such anouncements and purchases to deliver regular spread-out shocks to keep them spending money over a longer period and especially when they are starting to show signs of recovery.

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Re: Pakistani Economic Stress Watch

Postby nam » 07 Oct 2018 00:05

Trikaal wrote:If they don't have cash, how will they respond? Instead we should time such anouncements and purchases to deliver regular spread-out shocks to keep them spending money over a longer period and especially when they are starting to show signs of recovery.


Beg, steal, sell buffaloes whatever. It they dont have money, we need to put them under pressure more.

Let them get more loans at higher rates, but Pak needs to spend on arms more. You dont allow them to recover.

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Re: Pakistani Economic Stress Watch

Postby g.sarkar » 07 Oct 2018 00:08

Just a small question: When I do not pay my monthly car loan payment, the lender re-possesses my car. The same goes for my house. But Pakistan is a sovereign nation. Can it tell its creditors to go where Sun don't shine? Or we can not pay, re-negotiate the loan with better terms? In the past many nations have payment problems (nations in South America for example), but I do not remember creditor nations taking over strategic assets.
Gautam

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Re: Pakistani Economic Stress Watch

Postby Bart S » 07 Oct 2018 00:27

g.sarkar wrote:Just a small question: When I do not pay my monthly car loan payment, the lender re-possesses my car. The same goes for my house. But Pakistan is a sovereign nation. Can it tell its creditors to go where Sun don't shine? Or we can not pay, re-negotiate the loan with better terms? In the past many nations have payment problems (nations in South America for example), but I do not remember creditor nations taking over strategic assets.
Gautam


The first one, they certainly can, but that will have disastrous knock-on effect for their economy, investments, trade and foreign relations and even they are are not stupid enough to do that if they can help it, despite the usual bravado that threatens to do it.

Second, it is what they have been doing every few years for the last 70 years. Much better option for the Pakis, except that this time around they have managed to politically/strategically piss off all the people who would be making such decisions (other than China).

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Re: Pakistani Economic Stress Watch

Postby Aditya_V » 07 Oct 2018 06:19

Expect this time winter pollution in the Pakjab and North india to be bad this year. What the Pakis are doing is too cut down imports fuel is being supplied to only major cities. Gas from Baluchistan is being used to generate electricity for these big cities. The rest of the population being left out in the cold has to use firewood

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Re: Pakistani Economic Stress Watch

Postby JohnTitor » 07 Oct 2018 10:39

Manish_P wrote:IMF appoints Gita Gopinath as Chief Economist

Oh you Pakis

:mrgreen: :rotfl:


She's married to Iqbal Dhaliwal

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Re: Pakistani Economic Stress Watch

Postby Bart S » 07 Oct 2018 11:04

JohnTitor wrote:
Manish_P wrote:IMF appoints Gita Gopinath as Chief Economist

Oh you Pakis

:mrgreen: :rotfl:


She's married to Iqbal Dhaliwal


Is there a point to that observation? Are you implying anything in particular?

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Re: Pakistani Economic Stress Watch

Postby chetak » 07 Oct 2018 11:48

Bart S wrote:
JohnTitor wrote:
She's married to Iqbal Dhaliwal


Is there a point to that observation? Are you implying anything in particular?


Yes saar,

it's either one b@ll or one hair, what are you implying?? :)

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Re: Pakistani Economic Stress Watch

Postby arun » 07 Oct 2018 12:06

JohnTitor wrote:
Manish_P wrote:IMF appoints Gita Gopinath as Chief Economist

Oh you Pakis

:mrgreen: :rotfl:


She's married to Iqbal Dhaliwal



Bangalore born Iqbal Singh Dhaliwal, who is ex IAS of Tamil Nadu cadre, is indeed husband of Gita Gopinath.

Check out MIT’s Abdul Latif Jameel Poverty Action Lab for his bio:

Iqbal Singh Dhaliwal

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Re: Pakistani Economic Stress Watch

Postby Karthik S » 07 Oct 2018 12:16

Bart S wrote:
JohnTitor wrote:
She's married to Iqbal Dhaliwal


Is there a point to that observation? Are you implying anything in particular?


If you live in the Milky Way galaxy, you'd know the answer.

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Re: Pakistani Economic Stress Watch

Postby Bart S » 07 Oct 2018 12:26

Karthik S wrote:
Bart S wrote:
Is there a point to that observation? Are you implying anything in particular?


If you live in the Milky Way galaxy, you'd know the answer.


Well, if the implication (loyalties, based on his first name etc, questionable debate anyway since he is now American and not Indian) is what I think it is, it is rather unfortunate since he is of Indian origin, an ex-IAS officer and comes from a services (BSF) family. Can't get more Indian than that. None of that precludes him from being anti-Indian or pro-Paki but his actions/words/leanings should be what he is judged on and not his name. Going by that logic, Umar Fayaz should automatically be a traitor and Mani Shanker Iyer should be a patriot.

Anyways, OT, and last from me on this.

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Re: Pakistani Economic Stress Watch

Postby Neshant » 07 Oct 2018 23:03

500,000 Chinese professionals to be moved into Pakistan doing what ?

-----

Surprisingly, recent news that China seeks to settle hundreds of thousands of its citizens in Gwadar went almost unnoticed in Pakistan, with few outlets publishing stories on it. According to the Economic Times, CPIC “bought the 3.6-million square foot International Port City and will build a $150-million gated community for the anticipated 500,000 Chinese professionals who will be located by 2022 and work in its proposed new financial district in Gwadar.”


https://thediplomat.com/2018/10/gwadar- ... se-colony/

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Re: Pakistani Economic Stress Watch

Postby suryag » 08 Oct 2018 00:43

Folks FWIW it is Iqbal Singh Dhaliwal

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Re: Pakistani Economic Stress Watch

Postby Peregrine » 08 Oct 2018 02:24

Neshant wrote:500,000 Chinese professionals to be moved into Pakistan doing what ?
-----
Surprisingly, recent news that China seeks to settle hundreds of thousands of its citizens in Gwadar went almost unnoticed in Pakistan, with few outlets publishing stories on it. According to the Economic Times, CPIC “bought the 3.6-million square foot International Port City and will build a $150-million gated community for the anticipated 500,000 Chinese professionals who will be located by 2022 and work in its proposed new financial district in Gwadar.”
https://thediplomat.com/2018/10/gwadar-emerging-port-city-or-chinese-colony/
Neshant Ji :

Why wolly? Soon thele will be a Felly Selvice between Mumabi and Gwadal so that Mumbaiwalas can enjoy Chinese Dish of Polk Fly Lice. :rotfl:

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Re: Pakistani Economic Stress Watch

Postby sanjaykumar » 08 Oct 2018 05:11

Iqbal is not an uncommon Sikh name, FWIW.

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Re: Pakistani Economic Stress Watch

Postby Mahesh_R » 08 Oct 2018 10:02

g.sarkar wrote:Just a small question: When I do not pay my monthly car loan payment, the lender re-possesses my car. The same goes for my house. But Pakistan is a sovereign nation. Can it tell its creditors to go where Sun don't shine? Or we can not pay, re-negotiate the loan with better terms? In the past many nations have payment problems (nations in South America for example), but I do not remember creditor nations taking over strategic assets.
Gautam

I had similar questions...

I think they have been doing this since 70's and this is not their first bailout... IMF has done couple of times before and I do not recall any repayments.
Apart from credit ratings hit which will impact FI into the country... is there any other impact if loan not re-payed to IMF ?

I do not think they can/have behaved like chin and ask part of land or port to be handed over...any historic examples how the defaulters have been handled by IMF ?

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Re: Pakistani Economic Stress Watch

Postby Aditya_V » 08 Oct 2018 10:19

Pakistan has is dependent on Military equipment, communication equipment, basic electronics, steel, Oil, Gas, you name it. They export Agricultural goods, some minerals and Textiles(thier only industrialized products), some sports equipment so the the world can kick their balls during the FIFA world cups etc. They are hardly in any position to thumb thier noses at creditors. They have been useful in keeping India in check- thier basic utility to the world- but this usefulness is only thier when India is weak- India becomes economically and technologically advanced- this utility also goes.

For Pakistan, options are reduce Oil imports and electricity production by keeping to available to RAPE class in Isloo, Rawal Pindi , Lawhore and Karachi. Leave the masses to relly on firewood, Hopefully this will remove a lot of green cover on thier side of the LOC to hide Bunkers, snipers and Launch pads.

Trikaal
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Re: Pakistani Economic Stress Watch

Postby Trikaal » 08 Oct 2018 10:24

Mahesh_R wrote:I had similar questions...

I think they have been doing this since 70's and this is not their first bailout... IMF has done couple of times before and I do not recall any repayments.
Apart from credit ratings hit which will impact FI into the country... is there any other impact if loan not re-payed to IMF ?

I do not think they can/have behaved like chin and ask part of land or port to be handed over...any historic examples how the defaulters have been handled by IMF ?

Every IMF loan to Pakistan has been repaid. I remember Nawaz Sharif recently paid off their last IMF loan. That's the beauty of IMF loans, almost no one manages to default. Their conditions are such that they get their money back, even if they have to gut the host economy for that. It's not a free lunch, which is why so many hate it.

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Re: Pakistani Economic Stress Watch

Postby pankajs » 08 Oct 2018 13:49

There are 2 points to note.

1. There is no default because of loan evergreening. You get a bigger loan from the same entity to repay it's past loan. This is magic. The Chinese do it for their SOEs and till recently the Indian PSUs did it for their favourite industralist.

2. Everyone involved is happy with that Charade i.e. the Bakistain, IMF and the Americans. Till such time as one of them decides enough is enough it will continue. The rolling over continues in the Chinese system where as the RBI and GOI finally pulled the plug in India and thus we have the NPA crisis in the PSUs over the last 3 years.

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Re: Pakistani Economic Stress Watch

Postby Falijee » 08 Oct 2018 19:49

Peregrine wrote:
Neshant wrote:500,000 Chinese professionals to be moved into Pakistan doing what ?
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https://thediplomat.com/2018/10/gwadar- ... se-colony/
Neshant Ji :

Why wolly? Soon thele will be a Felly Selvice between Mumabi and Gwadal so that Mumbaiwalas can enjoy Chinese Dish of Polk Fly Lice. :rotfl:

Cheers Image


And Peregrine-ji Gwadari/Balochi Ayeshas available for "CPEC marital unions" ( and nightly pleasures !) :wink:

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Re: Pakistani Economic Stress Watch

Postby Falijee » 08 Oct 2018 20:05

Confirmed By An "Expert" : Pakiland Has No Option But To "Beg" From IMF :mrgreen:

Pakistan will have to take tough decisions if US blocks bailout
The Express Tribune
Oct 8, 2018

ISLAMABAD: In the last round of talks with US Secretary of State Michael Pompeo, Pakistan sought to refute an impression that US tax dollars and the IMF package may be used to pay back Chinese loans.
Islamabad has consistently emphasised that the Chinese loans were of long-term in nature and that they have got nothing to do with a possible IMF bailout package. Taqiyya :roll:
There is, however, little truth to this narrative. Take, for example, the case of M5 motorway project. Its tender documents barred firms, which were not nominees of the Communist party, from participating in the bidding process altogether. Moreover, the Exim Bank of China financed those firms that imported raw material including cement and purchased equipment from China – instead of buying from local manufacturers.
The same thing was said by Advisor Razak Dawood in his interview with Financial Times London, for which he was "attacked" tooth and nail :mrgreen:
It means that these projects effectively stimulated a declining Chinese economy – at the expense of Islamabad’s.
However, Islamabad is in a state of denial. The public realises there are grave problems associated with finances of the Belt and Road Initiative (BRI) but the inexperienced incumbent government is largely unaware of the extent of those problems.The 2015 deal to borrow from China has led to the climax of years of fiscal weakness and the debt trap. With billions already spent on Gwadar, we have yet to see any economic dividends from the development of this container-shipping hub.Instead, since 2016, Pakistan has witnessed essentially a continued currency crisis with the economy heading into stagflation – a pungent combination of recession and high unemployment.
. The "shrewd" Chinis have "cleaned out the Paki Treasury" . And pretty soon, they will clean out the pristine Arabian Sea , near and about Gwadar of all its sea and marine life to feed the Hungry Hans back home :mrgreen:
As an economy with structural weaknesses, reflected in its large external deficits and circular debt, the exchange rate is under unsustainable pressures. The process of letting the currency slip freely is not over yet and no one has an idea where it will end up if left largely to the market forces.
The stock market ( as an indicator ) is already showing a downtrend !
During 2018 elections, the Pakistan Tehreek-e-Insaf (PTI) found what it thought was a killer political theme this fall: say no to foreign aid – with the exception of that from our Chinese and Saudi friends. But now Finance Minister Asad Umar has dialed down the rhetoric and recognised the need for an urgent IMF package to keep the economy afloat.
And the Saudis disappointed the First Islami Atomi Takat by agreeing to "only" supply oil at concessional rates, not disbursing the $ 10 Billion "begged for " !
The new cabinet backs the IMF-proposed reduction in government spending, tax increases and rises in interest rate. Unfortunately, root causes of such fiscal problems that are studiously ignored do not disappear. For laying the groundwork that will allow his team to act swiftly, Umar needs to take firm action.
Umar will "learn on the job", but in the process will also make blunders ( it is hoped :mrgreen: )
Pompeo has openly expressed his reservations about bailing out a former non-NATO ally as the geopolitical offensive component in the BRI vision is getting more and more pronounced every day.
IMO, Qureshi was not able to "sweet talk" Pompeo and Massa to release held up US Fund , until Pakiland stops playing double games !
If the US pulls the plug on an IMF bailout package, the new government in Islamabad will have to make tough decisions. Blocking IMF loans is just a small part of this back-and-forth game between the US and Pakistan that began 70 years ago. What is different this time is that Beijing is now part of the equation.
The writer here is confirming Pakistan's "whoring" nature . :mrgreen:
The writer is a Cambridge graduate and is working as a strategy consultant :roll:

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Re: Pakistani Economic Stress Watch

Postby Katare » 08 Oct 2018 22:11

Trikaal wrote:Summary:
IMF wants Pkr to be devalued to 150 Pkr to a dollar
IMF wants Interest rates to rise above 10%
IMF wants Pakistan to make public CPEC-OBOR bill amount and terms(because that is what it is, a bill, not an investment or a loan)

All 3 are like body blows to Paki economy and prestige. They might survive but they will be belly crawling for a long time.


If Pakistan implements IMF plan with honesty, it's economy would come out of the woods and stand on its own two feet. I guarantee they will try to cheat their way out once they have the money and than they'll be back to IMF for more in couple of years.

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Re: Pakistani Economic Stress Watch

Postby Katare » 08 Oct 2018 22:33

Mahesh_R wrote:
g.sarkar wrote:Just a small question: When I do not pay my monthly car loan payment, the lender re-possesses my car. The same goes for my house. But Pakistan is a sovereign nation. Can it tell its creditors to go where Sun don't shine? Or we can not pay, re-negotiate the loan with better terms? In the past many nations have payment problems (nations in South America for example), but I do not remember creditor nations taking over strategic assets.
Gautam

I had similar questions...

I think they have been doing this since 70's and this is not their first bailout... IMF has done couple of times before and I do not recall any repayments.
Apart from credit ratings hit which will impact FI into the country... is there any other impact if loan not re-payed to IMF ?

I do not think they can/have behaved like chin and ask part of land or port to be handed over...any historic examples how the defaulters have been handled by IMF ?


State assets are not the collateral for the loans a nation's govt receives. The loan are given only when it is certain that the country can pay it back in the first place and as situation deteriorates the interest rate increases to mitigate the risk of loosing capital. No nation would willingly default because consequences for it are horrendous. Your overseas assets will be confiscated, you'll be cut out from the global financial systems and capital will flow out of the country like there is no tomorrow. For example a defaulter country won't be able to buy insurance for ships carrying the cargo like crude for it's need. Exporters (crude to food) would immediately stop supply of everything since no one sells anything to a bankrupt entity on credit. The entire nation would come to a standstill in couple of days. That is why no country does it intentionally, infect IMF's primary role is to help near bankrupt countries so they can stabilize their economies. The help comes in technical expertise and financial infusion. IMF loans are for short term and given with a clear plan (agreed and signed by receiving country) that ensures that the country will be stable for the duration of loan payback and during that period it would be able to pay back the loan.

Although nations genuinely go bankrupt sometime and than lenders loose their money. Russia went bankrupt and a lot of its debt were restructured or reduced substantially. Nations and multilateral lenders forgive loans or restructure them with grace periods. Bondholders (mostly private sector) get roasted loosing substantial chunk in no time.

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Re: Pakistani Economic Stress Watch

Postby Neshant » 08 Oct 2018 22:49

More bizarre-ness unfolding.

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Pakistani Poker: Playing Saudi Arabia Against China

https://www.zerohedge.com/news/2018-10- ... inst-china
Last edited by Neshant on 09 Oct 2018 04:55, edited 1 time in total.


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