Pakistani Economic Stress Watch

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Peregrine
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Pakistani Economic Stress Watch

Postby Peregrine » 07 May 2019 00:54

S&P BSE SENSEX

Index Current : 38,600.34 - Pt. Change : -362.92 - % Change : -0.93%

Market Capitalization of BSE Listed Co. (Rs.Cr.) : 1,50,37,633.14 – $ 1 / I R = 69.6125

Market Capitalization of BSE Listed Co. (U S $.) : 2,160.19

P S E

Index Current : 35,605.42 - Pt. Change : -517.53 - % Change : -1.45%

Market Capitalization of P S E Listed Co. (U S $.) : 50.54 Billion - Based on 98.55% of Market Capitalization on 03-05-2019

B S E : P S E : : 42.74 : 1


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Re: Pakistani Economic Stress Watch

Postby venug » 07 May 2019 00:56

Unable to understand the game plan of TSP anymore. So they are replacing their economic strike team with Pakis with connections to IMF, is this stipulated by IMF? or is it the anticipation of TSP that IMF will look at the IMF officials in TSP's Min of finance and open it's purses? what about the conditions that TSP has to divulge CPEC loan terms? with IMF officials taking key positions in min of finance, it is TSP's way to letting IMF know the loan terms without actually divulging the loan terms to the world?

Peregrine ji, BTW thanks for the info you posted in response to my last post.

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Pakistani Economic Stress Watch

Postby Peregrine » 07 May 2019 01:45

venug wrote:Unable to understand the game plan of TSP anymore. So they are replacing their economic strike team with Pakis with connections to IMF, is this stipulated by IMF? or is it the anticipation of TSP that IMF will look at the IMF officials in TSP's Min of finance and open it's purses? what about the conditions that TSP has to divulge CPEC loan terms? with IMF officials taking key positions in min of finance, it is TSP's way to letting IMF know the loan terms without actually divulging the loan terms to the world?

Peregrine ji, BTW thanks for the info you posted in response to my last post.
venug Ji :

1. You are welcome - I trust it is about FATF.

2. Indeed - letting IMF know the loan terms without actually divulging the loan terms to the world. I am sure that it will be on the basis of "Divulging it to the IMF on a Strictly Private and Confidential on the Parts which only Heineken Pilsner Bier can Reach"!

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Pakistani Economic Stress Watch

Postby Peregrine » 07 May 2019 02:54

'IMF had Asad Umar removed; Reza Baqir delivered the message Ahmed Mansoor

ISLAMABAD: Pakistan Peoples Party’s (PPP) senior leader Syed Khursheed Shah on Sunday said the Pakistan Tehreek-e-Insaf-led (PTI) government had removed Asad Umar as finance minister on the insistence of the International Monetary Fund (IMF).
In a video statement, the former opposition leader in the National Assembly claimed that Reza Baqir, the IMF economist who was appointed as governor of the State Bank of Pakistan (SBP) on Saturday, was used as a middleman to convey the international lender’s reservations over Umar’s performance.
“According to my information, Reza Baqir – since he was with the IMF in Egypt – was used in the move to sack Umar. Through him [Baqir] messages were conveyed that the IMF was not happy with Umar,” said Shah.
“IMF representatives thought he [Umar] was ill-prepared at times or simply did not know enough, and there would be no breakthrough in negotiations if he was not removed,” he added.
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Re: Pakistani Economic Stress Watch

Postby venug » 07 May 2019 03:11

Yes Peregrine ji, it was about next FATF meeting.

It appears TSP GUBOed enough to IMF’s satisfaction, appears TSP will get the bail out now. This doesnt seem good, I thought this is it, TSP will go bully up :)

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Re: Pakistani Economic Stress Watch

Postby Peregrine » 07 May 2019 04:03

venug wrote:Yes Peregrine ji, it was about next FATF meeting.

It appears TSP GUBOed enough to IMF’s satisfaction, appears TSP will get the bail out now. This doesnt seem good, I thought this is it, TSP will go bully up :)
venug Ji :

Oh yes! The Terroristanis are screaming in Japanese after having had A Hot Chilly South Indian Dinner the night before!

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Re: Pakistani Economic Stress Watch

Postby ramana » 07 May 2019 04:07

Hawkji, FATF is top of agenda for NaMo.
Fikar not.

BTW has shipping insurance to TSP ports increased or not?

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Pakistani Economic Stress Watch

Postby Peregrine » 07 May 2019 04:58

ramana wrote:Hawkji, FATF is top of agenda for NaMo.
Fikar not.

BTW has shipping insurance to TSP ports increased or not?
ramana Ji :

Have consulted my Uncle Google and have been advised as follows :

1. Swedish Club adds Pakistan to War Risk Areas

2. War risk insurers evaluating India-Pakistan tensions

Swedish Club adds Pakistan to list of war risk areas, but UK War Risks Club has no plans to follow suit and DNK takes lead from Joint War Committee, marine insurance leaders have told Lloyd’s List.

Uncle Google said there is not a Dickie Bird from the other Protection and Indemnity Clubs or War Risk Clubs.

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Re: Pakistani Economic Stress Watch

Postby manjgu » 07 May 2019 07:45

if IMF loan is released , how can Napakis be put on FATF? i think FATF black listing is not gonna happen... it will be grey !!

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Re: Pakistani Economic Stress Watch

Postby khan » 07 May 2019 09:14

IMF money will be released because IMF will not get repaid if they don’t release the money.

The main question is, how much control do they get of Pakistani spending for the next tranche of money? Enough control to cut the militaries budget?

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Re: Pakistani Economic Stress Watch

Postby Vips » 07 May 2019 10:38

And the fun begins.....



First 5 Minutes highlights:

Federal Board of Revenue ka head IMF ne appoint karwaya hai. Inka Boss IMF mein ek Indiah hai (Gita Gopinath Hai)

State Bank of Pakistan ka head IMF ne appoint karwaya hai. Yeh 2006 se jis company mein partner hai (New Silk Route - NSR) uska malik aur CEO Indian hai (Parag Saxena)

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Re: Pakistani Economic Stress Watch

Postby Atmavik » 07 May 2019 10:55

Vips wrote:And the fun begins.....



First 5 Minutes highlights:

Federal Board of Revenue ka head IMF ne appoint karwaya hai. Inka Boss IMF mein ek Indiah hai (Gita Gopinath Hai)

State Bank of Pakistan ka head IMF ne appoint karwaya hai. Yeh 2006 se jis company mein partner hai (New Silk Route - NSR) uska malik aur CEO Indian hai (Parag Saxena)


ei dekho.. 7th generation electro magnetic vaar fare. yahood-e-hanood sasish is muqamall. idiot is worried about their finanacial so vriginity being violated even though their physical soveriginty is violated from west and now east.

they think this is East India company again. not sure if they have a problem with east or India or shocked that someone is coming.

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Re: Pakistani Economic Stress Watch

Postby Manish_P » 07 May 2019 12:28

Markets welcome Ramazan with massive price hike

Consumers brace for a costlier Ramazan this year as prices of almost all essential items including meat, ghee, cooking oil, flour, onion, chicken, and fruits have seen a significant increase during the last few weeks.


One of the comments
That’s why I purchased all the meat 3 months ago and deep froze it.

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Re: Pakistani Economic Stress Watch

Postby menon s » 07 May 2019 12:36

Shabbar zaidi is appointed as Chief of FBR (federal board of revenue), he is a sane chap, but he will be pushed out , sooner if not later. why?
Shabbar zaidi, says that 60% of Pakistani economy is unaccounted for, and revenue cannot be increased, unless and until, they are mainstreamed.

Looks good, but, those who control the black economy, are also politicians who are now sitting, in the PTI, PMLN and PPP. Notably the sugar barons.
They wont let this poor chap survive long.

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Re: Pakistani Economic Stress Watch

Postby Vips » 07 May 2019 18:26

Gaur farmaiye from 23:50 onwards.... :rotfl:



Pakistan government imposed a levy on petroleum products for making funds available for "modernising of refineries". It was supposed to be for 3 years only but has been collected now for 18 Years and is still continuing. There is no separate clarification or accountability for the amount/funds collected and how/where it is being used. When Imran was in the opposition he made noise about it and as soon as he was (s)elected he was given a briefing about this. The person was told to contact the petroleum minister the next day in his office. The next day this person was made to wait for the minister and was given just a minute to give his documents after which no action has been taken.....

We have our answer on how the Paki defence forces are thriving and are able to increase their funds allocation in a country with decreasing exports and decreasing Real GDP situation.

The levies on petroleum products and power consumption is collecting more then 60 Billion rupees and no administration (Zardari,Sharief and Imran) has control on its use. The fund is most likely being collected for and used by the Pakistani defence forces without any oversight and accountability.

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Pakistani Economic Stress Watch

Postby Peregrine » 07 May 2019 20:19

S&P BSE SENSEX

Index Current : 38,276.63 - Pt. Change : -323.71 - % Change -0.84%

Market Capitalization of BSE Listed Co. (Rs.Cr.) : 1,49,11,852.54 - $ 1 / I R : 69.43

Market Capitalization of BSE Listed Co. (U S $.) : 2,147.89 Billion

P S E

Current Index : 35,631.06 - Change : 25.64 - Percent Change : 0.07%

Market Capitalization of P S E Listed Co. (U S $.) : 50.58 Billion - Based on 100..07% of Market Capitalization on 06-05-2019

B S E : P S E : : 42.47 : 1


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Pakistani Economic Stress Watch

Postby Peregrine » 08 May 2019 02:36

X Posted on the I W T Thread

Federal govt revises up cost of Dasu hydropower project

ISLAMABAD: The federal government on Monday revised upward the land acquisition cost of under-construction Dasu hydroelectric power project by another 40% to address concerns of local population, which has increased its total cost to Rs510 billion.
Headed by Minister for Planning and Development, the Central Development Working Party (CDWP) increased the land component cost of the project from the original Rs12 billion to Rs39.6 billion. It was the second revision in the land cost, as earlier the last government had also jacked up the total cost to Rs19.1 billion from the original Rs12 billion.

Note : The project is part of the hydropower development projects included in the Vision 2025 Program developed by WAPDA in 2001, and the Power Policy 2013 of Government of Pakistan (GOP).

$3.78b Dasu dam loan may get lapsed, warns World Bank - Zafar Bhutta - : October 22, 2018

PM intervenes to save $4.3b Dasu dam project

U S DOLLAR RATE AGAINST TERRORISTANI RUPEE IN 2011 – US$ 1 = T. R. 86. Now US$ 1 = T. R. 141.50. IMF wants T.R. @ 150 to the US$ and the T.Govt has authorized its Electricity and Gas Companies to charge at T. R. @ 180 to the US$!

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Pakistani Economic Stress Watch

Postby Peregrine » 08 May 2019 17:04

SX outlook remains gloomy ahead of tough IMF programme ahead of tough IMF programme - Salman Siddiqui

KARACHI: The Pakistan stock market snapped its five-day losing streak with moderate buying at three-year low levels on Tuesday, but the outlook remains negative-to-neutral ahead of entering a likely stringent International Monetary Fund (IMF) loan programme and a tax-heavy budget announcement.
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Re: Pakistani Economic Stress Watch

Postby Vips » 08 May 2019 18:05

"Anal"yst on paki talk show is crying that Pakistan asked for $12 Billion from IMF and is getting just $6 Billion and that to in Installments!!!
He further says isse ek saal hamara kaam chalega. Agle saal kya hoga? kaha se layege hum $20-22 Billion joh hame lautane hai. :rotfl:

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Re: Pakistani Economic Stress Watch

Postby Aditya_V » 08 May 2019 18:45

ANy Paki rupee Devaluation as per IMF, atleast 150-160 levels?

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Re: Pakistani Economic Stress Watch

Postby Vips » 08 May 2019 19:47

All the IMF steps are being done in gradual manner or else aam abduls will want to do AOA. The next step IIRC is to increase gas price by another 6-8 Paki toilet papers.

The exchange rate will be at 180 to every US$ eventually and so will be the prime lending rate at 12.50%.

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Re: Pakistani Economic Stress Watch

Postby Bart S » 08 May 2019 20:00

Vips wrote:"Anal"yst on paki talk show is crying that Pakistan asked for $12 Billion from IMF and is getting just $6 Billion and that to in Installments!!!
He further says isse ek saal hamara kaam chalega. Agle saal kya hoga? kaha se layege hum $20-22 Billion joh hame lautane hai. :rotfl:


Link please

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Re: Pakistani Economic Stress Watch

Postby Anujan » 08 May 2019 22:56

Vips wrote:"Anal"yst on paki talk show is crying that Pakistan asked for $12 Billion from IMF and is getting just $6 Billion and that to in Installments!!!
He further says isse ek saal hamara kaam chalega. Agle saal kya hoga? kaha se layege hum $20-22 Billion joh hame lautane hai. :rotfl:


IMF can take the money they are owed from the money that IMF would have loaned Pakistan anyway.

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Pakistani Economic Stress Watch

Postby Peregrine » 09 May 2019 03:52

X Posted on the Terroristan Thread

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Re: Pakistani Economic Stress Watch

Postby kit » 09 May 2019 07:56

Anujan wrote:
Vips wrote:"Anal"yst on paki talk show is crying that Pakistan asked for $12 Billion from IMF and is getting just $6 Billion and that to in Installments!!!
He further says isse ek saal hamara kaam chalega. Agle saal kya hoga? kaha se layege hum $20-22 Billion joh hame lautane hai. :rotfl:


IMF can take the money they are owed from the money that IMF would have loaned Pakistan anyway.


How does the give and take of IMF benefit them and Pakistan..accounting books and some leverage on monetary policies aside.? I think China shrewdly stepped aside letting IMF do the accounting" jobs .. suspect a beefier infrastructure "loan" and wholesale "work" BRI work to start once this is done. Nice.

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Pakistani Economic Stress Watch

Postby Peregrine » 09 May 2019 16:58

X Posted on the Terroristan Thread

Further rupee fall, interest rate hike expected - Salman Siddiqui

KARACHI: Pakistan is bracing for an economic jolt as the government is expected to allow a significant rupee depreciation and key interest rate hike in 2019. These steps will be taken to implement the International Monetary Fund’s (IMF) loan programme, a research house of a brokerage firm said on Wednesday.
In a paper on “Pakistan’s Economy: IMF Programme and its Implications”, Topline Research said the government was expected to let the rupee depreciate 13-17% to Rs160-165 against the US dollar by December 2019 and the key interest rate may be raised by 1.25 percentage points to the peak of 12% during the year.
Earlier, the central bank had let the currency depreciate by 34% to Rs141.3 to the greenback and increased the interest rate by five percentage points to 10.75% since December 2017.
Seemingly Terroristani Rupee is built on a Foundation of "Quick Sand." :rotfl:

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Re: Pakistani Economic Stress Watch

Postby menon s » 09 May 2019 18:00

60 billion imports, 20 billion exports and 20 billion in remittances: Means a Current account deficit of 20 bn every year.
Add to this their debt repayment in dollars, about 100 bn dollars due in next 6 years?

IMF might gift them, 6 bn dollars this year, WB might lend them, 12 bn dollars this year, ADB and others might rake in 3 bn dollars more, which will all be over, by December of 2019.

Who will lend them after that?

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Pakistani Economic Stress Watch

Postby Peregrine » 09 May 2019 18:09

Very Long Article. Feel it must be Preserved!

Pak-IMF deal may be announced tomorrow - Shahbaz Rana

ISLAMABAD.: The government and the International Monetary Fund (IMF) are likely to announce a staff-level agreement tomorrow (Friday) as the former has accepted most of the global lender’s demands — earlier termed harsh — that will lead to the unfolding of an inflationary budget loaded with taxes on June 11.

Both sides will hold the last round of talks today (Thursday) in which the remaining issues of the fiscal deficit and primary balance will be finalised, sources in the Ministry of Finance told The Express Tribune.

They added that the country did not have any other option but to concede to the IMF’s demands to remain afloat.

Pakistan and the IMF have started exchanging the proposed draft of the Memorandum of Economic and Financial Policies that will become the base for the three-year programme.

It is expected that the loan size will be equal to about 225% of Pakistan’s quota or $6.5 billion.

The country already owes $5.8 billion to the IMF on account of previous loans. If all the issues are resolved by Thursday evening, Pakistan and the IMF will sign their 22nd programme on Friday.

“Unlike in the past, the IMF should finalise the loan programme keeping in mind the ground realities of Pakistan including the Pakistan Tehreek-e-Insaf’s [PTI] representation in both houses of the parliament,” said Senator Shibli Faraz, the leader of the house in the Senate.

Senator Faraz met IMF Mission Chief Ernesto Rigo along with three other legislators at the Parliament House.

They told the IMF official that the conditions set by the global lender for the new bailout package required new legislation and the PTI was not in a comfortable position to have these bills passed from both houses of the parliament.

PSX outlook remains gloomy ahead of tough IMF programme

The IMF mission chief highlighted the grave fiscal position of Pakistan and the privileges that various sectors enjoyed. The withdrawal of these tax concessions and privileges are among the conditions that Pakistan has accepted to secure the bailout package.

Where Pakistan is blamed for being a regular client of the IMF, there has also been criticism against the IMF for imposing conditions on the country that are not sustainable in the longer term. There are also apprehensions that because of the IMF’s tough conditions, the country might not be able to complete the programme. Nothing New

The sources said that during the last 10 days, IMF Resident Representative Teresa Daban remained persistent in her demand that Pakistan took all difficult measures upfront.

The mission chief at times appeared inclined to give certain concessions but Daban did not agree to that, the sources said.

Budget date

It has also been decided that the budget for the next fiscal year would be announced on June 11 as the Federal Board of Revenue (FBR) has expressed its inability to prepare tax proposals by May 22, which was the earlier date set for the budget announcement.

IMF asks Pakistan to maintain development spending

The Ministry of Finance has sent a summary to the prime minister for approving June 11 as the new date for unveiling the budget, according to a senior official of the ministry.

It is expected that with the IMF’s harsh conditions, the next budget will unleash a wave of inflation. The IMF has not budged from its demand that the government should impose heavy taxes equivalent to 1.7% of the GDP, the sources said.

The FBR had proposed that the new taxes should be equal to slightly 1% of the GDP and rest of the amount could be collected through enforcement measures. However, the proposal was turned down by the IMF.

The administrative affairs in the FBR have gone haywire during the past five days after Prime Minister Imran Khan announced the appointment of Shabbar Zaidi as the new chairman of the board.

The decision has not gone down well with the FBR’s senior officials, who met Adviser to the PM on Establishment Shehzad Arbab.

The FBR officials conveyed their reservations against Zaidi’s appointment during the meeting, including the conflict of interest that arose from the development. However, the officials were plainly told that it was the prerogative of the prime minister to appoint anybody as the FBR chairman.

The officials told the adviser that in the majority of corporate cases, Zaidi’s firm, AF Ferguson, was in a dispute with the FBR. They also expressed their reservations over the government’s continuous bashing of the tax machinery. They complained that the prime minister had not taken the FBR stakeholders into confidence before making the decision.

The outgoing chairman, Jehanzeb Khan, did not attend his office on Wednesday and spent his day at the Islamabad Club in his capacity of its administrator.

The outcome of the adviser’s meeting with FBR members suggests that they will not observe a strike against Zaidi’s appointment. Nevertheless, its officers will pursue a legal path by challenging the appointment in the Islamabad High Court (IHC) or the Sindh High Court, a senior FBR member told The Express Tribune.

‘IMF had Asad Umar removed; Reza Baqir delivered the message’

Establishment Division Secretary Dr Ijaz Munir has already informed the federal cabinet that the decision to appoint Zaidi was tantamount to the contempt of the IHC. In a judgement in June 2013, the IHC had declared that the FBR chairman could not be appointed from the private sector without ensuring a competitive process.

The prime minister has made surprising decisions during the past three weeks, including removing finance minister Asad Umar and State Bank of Pakistan (SBP) governor Tariq Bajwa.

Umar accepted the chairmanship of the National Assembly Standing Committee on Finance on Wednesday after refusing to become the federal energy minister.

The prime minister has appointed Dr Reza Baqir, who until last week was the IMF’s top man in Egypt, as the SBP governor.

The sources said the Pakistan-IMF talks received a major boost after Baqir joined the negotiations this week.

They said both sides reached an understanding on certain issues that remained unresolved during Bajwa’s time.

Now it is expected that the central bank would ask the government to seek budget financing from commercial banks instead of heavily relying on the SBP. The government’s borrowings from the central bank have already hit a record Rs7.4 trillion by the end of March. Rs. 7400 Billion is over US$ 50 Billion

Comments : 1. “This is clearly double counting of $5.8 billion. In principle, it should have excluded this sum from the commercial banks’ reserves,” said Dr Ashfaque Hasan Khan, former director general of Debt of Ministry of Finance.

2. For the record, our net international reserves are now at negative $11 billion.

The new SBP governor will also ensure that the central bank does not frequently intervene in the exchange rate market and the value of the rupee is determined by market forces instead of the federal government.

In future, the SBP’s monetary policy stance will be to keep the real policy rate positive to anchor the inflationary expectations in a forward-looking manner. The central bank will continue to closely monitor the recent macroeconomic developments and their unfolding impacts on inflation, and will be ready to take further necessary actions if required.

As per the understanding with the IMF, over the medium-term, the SBP will gradually move towards a flexible inflation-targeting framework. In such a framework, more weight will be assigned to inflation as a nominal anchor without prejudice to growth.

The SBP will also eliminate existing exchange restrictions under Article VIII of the IMF’s Articles of Agreement. The central bank will bring an end to foreign exchange restrictions on advance import payments against the letters of credit and other administrative measures taken in the recent months to contain pressures on the balance of payments.

The SBP will prepare a more detailed plan to achieve compliance of all banks that fall below the minimum capital adequacy ratio.

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Pakistani Economic Stress Watch

Postby Peregrine » 09 May 2019 18:18

menon s wrote:60 billion imports, 20 billion exports and 20 billion in remittances: Means a Current account deficit of 20 bn every year.
Add to this their debt repayment in dollars, about 100 bn dollars due in next 6 years?

IMF might gift them, 6 bn dollars this year, WB might lend them, 12 bn dollars this year, ADB and others might rake in 3 bn dollars more, which will all be over, by December of 2019.

Who will lend them after that?
menon s Ji:

MISSION IMPOSSIBLE!

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Re: Pakistani Economic Stress Watch

Postby jash_p » 09 May 2019 18:56

Got watsup massage IMF asked tough conditions and Paki agreed will be send to Kaptan for approval.
1) Additional 350 billion RS taxes per year for two years.
2) Rupee will be depreciate slowly to 165 by end of year and free floating RS only in extreme condition intervene by SBP with IMF node.
3) Free NEPRA, OGRA, and SBP from Gov. Control
4) Privatization of money loosing Public Units.
5) Structural reform of tax collection and target to collect so deficit will be less than 7 % GDP.
6) Widen the tax base.
7) Increase development fund at expense of dead expenditure like defense, nonproductive construction.

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Re: Pakistani Economic Stress Watch

Postby Bart S » 09 May 2019 19:44

It might be fun to see the Pakis rona dhona at the inflation and high taxes, but long term the IMF terms are better for them. I would have been happier to see them continue to resist change.

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Re: Pakistani Economic Stress Watch

Postby venug » 09 May 2019 20:41

I guess it will be worthwhile to float the idea that TSP is paying off China with IMF money. Is it difficult to create fake documents in that direction? may be Rahul Gandhi and his team can help. Muddy the waters so much that IMF starts to question the loan documents/data regarding CPEC loans given to them by TSP. We want TSP to tank, changes prescribed by IMF can hurt aam abdul in the short term, but I am afraid that will make TSP's economy stabilize in the long run and bring fruit.

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Re: Pakistani Economic Stress Watch

Postby Peregrine » 09 May 2019 21:06

Bart S wrote:It might be fun to see the Pakis rona dhona at the inflation and high taxes, but long term the IMF terms are better for them. I would have been happier to see them continue to resist change.
Bart S Ji :

Per my Post above of 09 May 2019 18:09 – the Terroristanis state :

1. It is expected that the loan size will be equal to about 225% of Pakistan’s quota or $6.5 billion.

2. The country already owes $5.8 billion to the IMF on account of previous loans. If all the issues are resolved by Thursday evening, Pakistan and the IMF will sign their 22nd programme on Friday.

Please advise if this amount of 225% is the Annual Quote or Total quota of Loan from IMF

Thanks in advance.

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Re: Pakistani Economic Stress Watch

Postby Bart S » 10 May 2019 00:41

Peregrine wrote:
Bart S wrote:It might be fun to see the Pakis rona dhona at the inflation and high taxes, but long term the IMF terms are better for them. I would have been happier to see them continue to resist change.
Bart S Ji :

Per my Post above of 09 May 2019 18:09 – the Terroristanis state :

1. It is expected that the loan size will be equal to about 225% of Pakistan’s quota or $6.5 billion.

2. The country already owes $5.8 billion to the IMF on account of previous loans. If all the issues are resolved by Thursday evening, Pakistan and the IMF will sign their 22nd programme on Friday.

Please advise if this amount of 225% is the Annual Quote or Total quota of Loan from IMF

Thanks in advance.

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From the IMF website:
Access to financing. The amount of financing a member can obtain from the IMF (its access
limit) is based on its quota. For example, under Stand-By and Extended Arrangements, a
member can borrow up to 145 percent of its quota annually and 435 percent cumulatively.
However, access may be higher in exceptional circumstances.


It's not clear without the terms of the loan being released but the Paki number lies in between the annual and cumulative limits.

It could be that the Pakis were given an exception to go over their 145% of quote annual limit, but IMHO it is more likely that they have been given 435% which comes to 225% after deducting their existing dues. But this is all speculation, looking at the terms when they are signed should give us the info.

Also from the IMF:
Under the Standby Arrangements, member countries are allowed to borrow over a period of one to two years to support macroeconomic stabilisation programmes and repayments are made within three to five years. Under the Extended Fund Facility, countries borrow for a period of three to four years and repayments are not due until five to ten years down the line.


The Pakis ain't going to repay anything in one to two years, so it is more likely that they are taking the Extended Fund Facility. The IMF will also not give them the money upfront, rather it will come in tranches, and the Pakis main source of funding is going to be non-IMF sources who are blocking loans till the IMF deal is signed and the Pakis get an IMF 'letter of comfort'.

Peregrine
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Pakistani Economic Stress Watch

Postby Peregrine » 10 May 2019 01:25

IP gas pipeline: Iran issues notice to Pakistan on moving arbitration court - Khalid Mustafa

ISLAMABAD: Tehran formally gave notice to Islamabad in February 2019 for moving the arbitration court for not laying down the pipeline in Pakistan’s territory in stipulated time under the IP gas line project and threatened to invoke the penalty clause of Gas Sales Purchase Agreement (GSPA).

Spokesman of Petroleum Division Additional Secretary Sher Afgan also confirmed the development that Iran in February 2019 gave a formal notice to Pakistan mentioning it will move the arbitration court. Both the countries during the two-day visit of Prime Minister Imran Khan to Iran on April 21-22 discussed the issues related to IP gas line particularly the scenario after the formal notice to Pakistan from Iran.

Earlier in 2018, according to official sources, the authorities in Iran had conveyed to Pakistan that it may move the arbitration court against Pakistan for unilaterally shelving IP gas line project invoking penalty clause of the GSPA. However, this time Iran formally gave the notice to Pakistan in February 2019 threatening to move the arbitration court for delaying the project.

The official sources said that during the visit of Prime Minister Imran to Iran, the top leadership took up the issue of IP gas line and told Pakistan leadership it will take back the notice only if the government of Pakistan extends the construction period of pipeline of 781 kilometres from Iranian border to Nawabshah under signed GSPA. ‘After coming back to Pakistan, prime minister asked the petroleum division to stay in touch with authorities in Iran and resolve the issue.’

The agreement was signed in 2009 for 25 years, but since then the project could not get the shape. Also most 9-10 years have elapsed since the signing of the agreement and the construction period for pipeline in Pakistan territory which comprises three years has been wasted. The Iranian authorities want Pakistan to mutually extend this period under GSPA. Iran has already asked Pakistan to review the price of gas under IP, but no talks on this issue have been held so far.

Before the formal notice from Iran in February 2019, Pakistan’s legal firm had sent about 15 legal questions to the legal team in Iran asking in the presence of renewed US sanctions against Iran on its nuclear programme how it is possible to materialise the gas transactions. Iran was of the view that there are no sanctions on gas transactions, as it is exporting gas to some EU countries and importing gas from Turkmenistan. However, Pakistan legal firm had asked for mechanism under which EU and Turkmenistan are materialising the gas transactions.

However, instead of reply on the legal questionnaire, Iran in February 2019 sent a formal notice to Pakistan, saying it is going to move arbitration court. Pakistan wants Iran to take back the notice as Pakistan tried its best for arranging funds required to lay down the pipeline in its territories, but in the presence of the US sanctions it failed to get financing from any international agency.

Under existing GSPA, Pakistan is bound to pay $1 million per day to Iran from January 1, 2015 under the penalty clause. An in case Iran moves arbitration court, then Pakistan will have to pay billions of dollars as penalty. This is the very reason that Pakistan is trying from pillar to post to persuade Iran to take back the notice.

Under the agreement with Iran, the project was to be implemented under segmented approach meaning by that Iran had to lay down the pipeline on its side and Pakistan had to build the pipeline in its territory. The project was to be completed by December 2014 and come on stream from January 1, 2015. Under the penalty clause it was agreed by both sides that if Pakistan fails to have intake of Iranian gas from January 1, 2015, it will have to pay $1 million per day as penalty. Ah Well. Terroristan's "Solicitors in London" will say "Gentlemen you have a Case". The case will be Argued for a Few Years. Finally they will lose the Case and the Terroristanis - having Big Hearts - will end up Paying may be a Cool Billion Dollars or Two!

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Peregrine
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Pakistani Economic Stress Watch

Postby Peregrine » 10 May 2019 03:51

Bart S Ji :

Thanks your Post 10 May 2019 00:41.

I appreciated the position now.

However, be that as it may, the Col. Cargills of Terroristan will most certainly will return with their Kashkols and "Beg for More".

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menon s
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Re: Pakistani Economic Stress Watch

Postby menon s » 10 May 2019 11:13

Hajam sethi...is back....
Paints a very gloomy picture of what lies ahead for PK.
https://twitter.com/najamsethi/status/1 ... 4535345160

Anujan
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Re: Pakistani Economic Stress Watch

Postby Anujan » 10 May 2019 11:21

https://tribune.com.pk/story/1969593/2- ... ficulties/

CPEC’s first power project mired in financial difficulties

Answering queries through a translator, Port Qasim Electric Power Company (PQEPC) Chairman Sheng Yuming said the circular debt in the power sector of Pakistan had remained a very challenging issue. His company, which operates two coal-fired power plants of 660 megawatts each, is also “facing the challenging problem of payment of arrears by Pakistan”.

“We have around $150 million (over Rs21 billion) late payments now,” he said, while responding to media queries at first anniversary of the start of commercial operations of the imported coal-fired power project set up at a cost of over $2 billion.

partha
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Re: Pakistani Economic Stress Watch

Postby partha » 10 May 2019 13:10

menon s wrote:Hajam sethi...is back....
Paints a very gloomy picture of what lies ahead for PK.
https://twitter.com/najamsethi/status/1 ... 4535345160

It is indeed very gloomy. One thing to keep an eye on is how the RAPEs react. Many have western passports and are dual nationals. If they start taking one way PIA flights out of Pakistan, we'll know sh*t has hit the fan. Our agencies should also monitor flight of capital out of Pakistan. If it reaches unusually high levels, that's another strong indicator that situation has reached a breaking point. RAPEs are well connected and their behavior could give lot of clues. One such RAPE who lives in London said IMF is calling the shots about who the next SBP chairman should be after the last chairman resigned lo and behold IMF fellow got appointed the very next day.

partha
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Re: Pakistani Economic Stress Watch

Postby partha » 10 May 2019 13:24

Anujan wrote:https://tribune.com.pk/story/1969593/2-cpecs-first-power-project-mired-financial-difficulties/

CPEC’s first power project mired in financial difficulties

Answering queries through a translator, Port Qasim Electric Power Company (PQEPC) Chairman Sheng Yuming said the circular debt in the power sector of Pakistan had remained a very challenging issue. His company, which operates two coal-fired power plants of 660 megawatts each, is also “facing the challenging problem of payment of arrears by Pakistan”.

“We have around $150 million (over Rs21 billion) late payments now,” he said, while responding to media queries at first anniversary of the start of commercial operations of the imported coal-fired power project set up at a cost of over $2 billion.

Internationalization of circular debt. A great victory. Pakistan's circular debt is no longer just Pakistan's problem but also China's problem. AK phyrr!!!


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