Pakistani Economic Stress Watch

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ramana
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Re: Pakistani Economic Stress Watch

Postby ramana » 11 Nov 2010 08:03

Maybe digging details of these guys might help:

http://www.pakautocar.com/bmw_dealers_s ... istan.html

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Re: Pakistani Economic Stress Watch

Postby shiv » 11 Nov 2010 09:27

Well I was right and wrong. But more wrong than right. :oops:

BMW sales in Pakistan in 2010 have increased 180% :shock: to a total of 14 :lol: this year. 8 sold last year. Yemen bought 39 BMWs.

It is possible that BRF readers bought more BMWs this year than all of Paquistann.

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Re: Pakistani Economic Stress Watch

Postby Prem » 11 Nov 2010 09:44

Do they mention which series ,3,5 ,7 or M ? :rotfl:

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Re: Pakistani Economic Stress Watch

Postby Lalmohan » 11 Nov 2010 13:44

isnt the vehicle of choice in paquistan the toyota landcruiser?

on tax collection - i think we even heard mamma clington say that pak is way behind in collections recently and needs to do more. therefore the state directly requires foreign fund injection to stay afloat

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Re: Pakistani Economic Stress Watch

Postby Charlie » 12 Nov 2010 03:26

Can anyone here do a write up on what an avg Paki college grad does. In which sectors does he go to work? How much he earns? What are the growth prospects?

As far as I know...they dont have any significant industries except that they make these toilet towels that are exported to US/West. But their standard of living is almost same as ours at this point of time.

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 12 Nov 2010 03:35

Prem wrote:Do they mention which series ,3,5 ,7 or M ? :rotfl:


Used or new?

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Re: Pakistani Economic Stress Watch

Postby shiv » 12 Nov 2010 06:07

Charlie wrote:Can anyone here do a write up on what an avg Paki college grad does. In which sectors does he go to work? How much he earns? What are the growth prospects?

As far as I know...they dont have any significant industries except that they make these toilet towels that are exported to US/West. But their standard of living is almost same as ours at this point of time.


In general the rich Paki has a standard of living higher than the middle class Indian. Pakistan has a very small middle class and estimates that I have seen (and myself done) from 2004 to 2010 put the "middle class" at about 12% (About 22 million) which stands out in comparison to India's middle class of 250-300 million or higher.

However (until the recent floods) whenever you read about Pakistan or see photos - you tend to see images of the RAPE class who are far more wealthy than the average Indian. But their numbers are small. It is very difficult to obtain the numbers of engineering graduates that are coming out of Pakistan every year. There are so many scams and ghost edu institutions and the country is in such a mess that the figures either do not exist or a difficult to dig up. I have tried that from time to time and the last time I tried was about 6 months ago. Will try again now that you ask. It is likely that Pakistan is graduating less than a tenth of the number that India is graduating in a year. I believe a lot of wealth Pakis study abroad. Pakistan is literally like two "backward states" of India. Without partition we would have had BIMARUP rather than BIMARU - with the P for Pakistan.

I don't think college life in Pakistan is much different from that in India except that there is a lot more Islam imposed, and where there isn't the RAPE kids are a lot more wealthy. In India we have humongous numbers of poor SDREs who travel by bus, or walk to college and will actually need that education to make a living later.

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Re: Pakistani Economic Stress Watch

Postby amit » 12 Nov 2010 09:05

shiv wrote:In India we have humongous numbers of poor SDREs who travel by bus, or walk to college and will actually need that education to make a living later.


Just to add a footnote to a great post.

... And many of these poor SDREs will use the education to make more money and contribute to the Indian economy than any of the RAPEs of their generation will do in Pakistan.

It's already evident (just look at the background of many of the top entrepreneurs and business leaders in the country) now and will be more so within the next 10 years or so, that this will be the greatest game changer. And the Nooklear deterrence and terrorist cannon fodder will not protect the Land of the Pure from the cascading effect of this. {This last para is for Paklurks, who may happen to have a brain, and even more wondrously, know how to use it to think.}

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Re: Pakistani Economic Stress Watch

Postby Airavat » 12 Nov 2010 09:19

State of Pakistan's manufacturing and services sectors

Specifically, production levels are still low in a number of industries despite a high growth, and the manufacturing capacity is largely under-utilized in many industries. For instance, the refining industry is operating at around 76 percent utilization level as against over 86 percent utilization in the last few years. Similarly, Pakistan’s largest steel mill is going through severe financial constraints. The mill is facing acute raw material shortage and is not able to utilize a large part of its capacity despite strong demand. Resultantly, import payments during Jul-Mar FY10 increased by 18.5 percent on petroleum products and 35.8 percent on pig iron over Jul-Mar FY09.

Furthermore, the existing production levels in automobiles and cement sector are quite low compared with the available capacities. In case of automobiles, low production levels are seen mainly in cars with engine capacities within 1000 cc, which cater to the demand of medium-income group and mostly financed through banks.

Composition of Services sector: average percentage share over 5 years

Transport & communications 19.5
Wholesale & retail trade 33.6
Finance & insurance 10.6
Public admin. & defense 11.5
Community & personal 19.5
Ownership of dwellings 5.3

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Re: Pakistani Economic Stress Watch

Postby Pratyush » 12 Nov 2010 09:27

Amit,

Even it they have a brian, will they be allowed to use it. Considering any attempt to do so will result in them getting their 72 at the hands on one pure one or another.

So a lose lose game for the Pakistanies.

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Re: Pakistani Economic Stress Watch

Postby Charlie » 12 Nov 2010 09:52

Top Pakistani Exports to US
The following products were the top-selling products from Pakistan imported into the United States during the first 5 months of 2010.

Each product’s percentage of total value of shipments from Pakistan to America is shown within brackets.

Cotton towels excluding dishtowels … US$130.1 million, up 40.5% (9.9% of total)
Cotton sheets … $78.6 million, up 17.7% (6%)
Men’s cotton shirts, knitted … $69.6 million, up 32.9% (5.3%)
Cotton hosiery excluding net or lace … $57.9 million, up 3.3% (4.4%)
Bathroom and kitchen linen excluding towels ... $49 million, up 24.7% (3.7%)
Printed bed linen … $43.9 million, down 16.8% (3.3%)
Men’s cotton t-shirts excluding underwear, knitted … $37.6 million, up 63.1% (2.9%)
Men’s and boys’ cotton pullovers … $37.6 million, down 10.3% (2.63%)
Quilts and comforters … $33.4 million, down 12.4% (2.56%)
Bar mops of cotton terry … $2.2 million, up 34.5% (2%).

Men’s cotton t-shirts continue to be the fastest-growing products imported from Pakistan into the United States, followed by Pakistani-made cotton towels.


Top Pakistani Imports from US
For the 5-month period ending May 2010, the following Pakistani imports from the United States had the highest dollar values.

Diammonium phosphate fertilizer … US$55.1 million, up 425.9% from 2010 (9.6% of total)
Civilian aircraft including parts … $51.2 million, up 141.1% (6.8%)
Other parts of military aircraft … $29.7 million, down 42.3% (3.9%)
Raw cotton 1.125 inches or more … $26.7 million, down 44.7% (3.5%)
Wheat or meslin flour … $24.6 million, up from nil (3.3%)
Raw cotton over an inch but under 1.125 inches … $23.7 million, down 59.2% (3.1%)
Medication containing hormones, non-veterinary … $16.9 million, down 4.7% (2.2%)
Parts for munitions of war including grenades … $15 million, up 6,894% (2%)
American Pima cotton 1.125 inches or more … $13.2 million, up 500.1% (1.75%)
Used automobiles … $13.1 million, up 121.9% (1.74%).

Among the top 10 Pakistani imports from America, bomb parts for grenades, mines and torpedoes showed the highest percentage gain. Those deadly supplies from the United States were up by almost 7,000% over the first 5 months of 2009.


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Re: Pakistani Economic Stress Watch

Postby Brad Goodman » 12 Nov 2010 18:38

Remittances reach $3.5bn in 4 months

posting in full as it might be useful data collection

KARACHI: Remittances sent by overseas Pakistanis are growing at a faster pace as these reached $3.5 billion in the first four months of the current fiscal year, giving hope for cumulative $10 billion inflows by the end of this year.

Data released by the State Bank on Thursday showed that remittances increased by 13.32 per cent during July-October for a total inflow of $3.501 billion. In terms of dollars, it was an increase of $411.61 million.

At the time of financial crisis due to devastating floods, the high remittances growth could minimise the size of current account deficit. The current account deficit during the first quarter of 2010-11 rose to $545 million but it was mainly due to surplus in September

During September, the current account was surplus with $447 million which reduced the July-September deficit by 7.1 per cent.

According to State Bank, in October 2010, an amount of $855 million was sent home by overseas Pakistanis, up 12.77 per cent or $96.81 million compared to $758 million received in the same month last year.

The remittances have taken a vital position in economy as these are the second biggest source of foreign exchange after exports.

The monthly average remittances for July-October 2010 period come out to $875.35 million as compared to $772.45 million during the same corresponding period of the last fiscal year, registering an increase of 13.32pc.



So I guess the follow-up could be to get a break-up figures by country from where pakis are remitting money to fuel terroristan. Also then drill down to see what kind of activities the do these jihadis engage in those places. Example most pakis in US are either cabbies or own shops. With very tiny percentage in IT or ITES. In Gulf it is labor class.

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Re: Pakistani Economic Stress Watch

Postby Lalmohan » 12 Nov 2010 18:46

i've met some middle class paquis in europe who are well educated (on paper) and have emigrated since there are no jobs back home - most were quite bitter and hopeless about prospects of decent employment

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Re: Pakistani Economic Stress Watch

Postby Brad Goodman » 12 Nov 2010 18:47

not sure if this was posted here

Pakistan Oct trade deficit at $1.23 billion

ISLAMABAD: Pakistan’s trade deficit narrowed to $1.23 billion in October from $1.39 billion in October last year, the Federal Bureau of Statistics said.

The trade deficit in September this year was $1.16 billion.

Exports stood at $1.98 billion in October this year, against $1.57 billion a year ago, according to the bureau’s data posted on its website late on Thursday.

Imports were worth $3.22 billion, compared with $2.97 billion in October last year.

The country’s trade deficit for the first four months of the 2010/11 fiscal year was $5.1 billion compared with $4.54 billion in the year-ago period.


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Re: Pakistani Economic Stress Watch

Postby ramana » 12 Nov 2010 22:26

^^^^
The country’s trade deficit for the first four months of the 2010/11 fiscal year was $5.1 billion compared with $4.54 billion in the year-ago period.





Means annual projected trade deficit is ~ 3 times i.e. ~$15B!

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Re: Pakistani Economic Stress Watch

Postby SureshP » 12 Nov 2010 23:06

The brewing economic pot!
Published: November 12, 2010
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Strange as it may sound, economic opportunities seem to be coming Pakistan’s way from
unthought-of global developments and there are already clear indicators that economic activity
per se at home is significantly picking up at least on the micro front. We can measure this either
in quantitative or in monetary terms, i.e. in case of the former the movement of commodities
traded and produced in volume terms and for latter in value terms and this preferably over an
internationally benchmarked currency (say the dollar). In my book while the value increase is
welcome, the litmus test of an upward movement in economic activity is when the volumes of
goods and commodities a country turns over during a given period register an increase. The good
sign in our case is that in the recent months the value of Pakistani exports has gone up and there
is an upward swing in quantum terms. Textiles, which constitute nearly 70 percent of Pakistan’s
exports have seen a big jump in value terms (owing to a global shortage and climbing price of
cotton) and more importantly also in quantitative terms being up on a month-on-month basis from
May to September 2010.
With the global investors and financiers losing confidence, and even interest in the financial
markets owing to factors such as the recent economic crisis and financial meltdown, their focus
for investment has instead has turned towards commodities, grains in particular. So as a result,
cotton is on a year-on-year basis going up by more than three times (currently trading at $1.40 at
NY spot rates), Corn about 120 percent ($6/bushel), and the list goes on. The prices of wheat,
sugarcane, rice, cocoa, etc all have at least doubled. Fortunately for Pakistan, this presents a
golden opportunity. We seem to be entering a period of significant enhancement in our revenue
inflows to finally start posting trade and current account surpluses. We have already seen this
happen with the current account balance in August 2010!
Exports in FY-2010 exceeded the official target by $1.0 billion rising to $19.38 billion - already
nearly 10 percent higher than $17.68 billion recorded in FY-2009. The Commerce Ministry feels
that exports rose as a result of production and market diversification, both in terms of range of
products exported, their destination and their higher value-addition. If so, this is yet another
Textiles and ready-to-wear garments exports of $10.244 billion up from $9.572 billion in FY-2009,
rice exports worth $2.3 billion and fruits, vegetables and jewellery were the key items exported.
With international prices of these grain commodities and gold trading at their all-time highs, it will
have a good effect on our export revenues during the months ahead! Also, other new high-value
products like electric power meters, PET bottle grain resin and glitter for fashion garments are
being added to exports. Our import bill for FY-2010 was $34.70 billion, a shade less than $34.82
billion in FY-2009, as the import growth was primarily restrained by declining prices of oil.
Likewise, the trade deficit (TD) narrowed down 10.54 percent to $15.32 billion from $17.13 billion
in FY-2009, because of higher exports. Pakistan’s current account deficit (CAD) narrowed down
in FY-2010 to $3.507 billion from $9.261 billion in FY-2009, according to the State Bank of
Pakistan (SBP). This development mainly attributed to the narrowing down of the balance of
trade, a decline in the prices of imported oil, and a record inflow of remittances from overseas
Pakistanis. The remittances in FY-2010 totalled a record $8.906 billion.
With a strong upward futures graph because of the above recounted reasons, we have great
potential of posting healthy current account surpluses. With an expanded home market activity
due to booming commodity prices, there exists an unparalleled economic opportunity in the
Pakistani market place in the coming months!
So then why the gloom and doom amongst the people and experts? Well, mostly because, there
exists an unsaid and perceived mistrust in the governing ability of the present government. That
they will yet again squander this golden chance by not availing it in a manner that it yields
transparent, people-friendly, equitably distributed and optimum results. Corruption, cartels,
lobbies and powerful interest groups would tend to direct the flow of revenues where it gets
concentrated in a few hands, rather than benefiting the people at large (97 percent of the banking
profit in Pakistan this year was posted by just five banks)! The fear is that once again we might
see an enhanced economic activity turn into runaway inflation, instead of providing more jobs and
relief to the people.
Also, some analysts are of the view that improvements on the current account side could be
nullified, if the government is not prudent in selecting the portfolio of its fiscal spending. Care
needs to be taken as to where the money supply is routed (remember Shaukat Aziz’s
government committed the cardinal sin of directing cheap capital that comes a nation’s way once
in 50 years to promoting consumption of non-productive consumer goods at the expense of the
manufacturing sector).
Long-term gains, instead short-term profiteering, need be kept in view. These extra revenues
should be used to make provisions for visibly rising costs in industrial inputs, food and oil, and for
debt repayment that will hit us sooner than we realise. Pakistan has a sizeable multilateral and
bilateral debt on which servicing will resume in the coming months. Last but not least, the SBP
report says that the foreign companies operating in Pakistan repatriated much lower dividends
and fees in FY-2010 as compared to FY2009, which helped the CAD. This may not be the case in
2011.
To sum up, the government does not have to reinvent the wheel, but to simply learn from and
follow the example of China that recently announced its new five-year plan and lo and behold, it
focuses upon, mainly, two things:
 Market Economy with Socialist Characteristics.
 Jihua (previous plans) stand replaced with Guihua (long-term programmes and
strategy).
This Chinese plan introduces some precise and indicative targets that the government will strive
to achieve in the coming years. Again, mainly two things have been focused upon: Growth and
Employment. The new long-term agenda will shun the earlier single-minded pursuit of growth and
replace it with growth with “all-round” development, containing pollution and quickly arresting
widening economic inequalities. According to the European Union Chamber of Commerce in
China, the weight of ‘manufacturing industries’ in China’s economy almost tripled between 2003
and 2008 and this was the main reason for China’s rapid and sustainable emergence as the new
global economic superpower.
We now have arrived at a point where we must insist that our political leaders guide us along the
path to a future that leads to long-term sustainability, justice and prosperity for all Pakistanis.
Fortunately, an opportunity to make it happen is in the making. The danger, however, is that if they
again fail to deliver, the consequences would be far more disastrous than before!
The writer is an entrepreneur and an economic analyst.
Email: kamalmannoo@hotmail.com.



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Re: Pakistani Economic Stress Watch

Postby BijuShet » 13 Nov 2010 03:23

Shivsaar and others were discussing auto sales in TSP so I figure this may help compare Indian Auto Market size to TSP Auto Market size. We may thus figure out the size of TSP's middle class and their buying power. Figures below are for monthly sales of cars, trucks, bikes etc.

From Pak Tribune : Car sales increase by 14 per cent
12th Nov, 2010 13:02:39 PM

KARACHI: Car sales continued to rise in October despite an increase in vehicle prices and depressed demand from flood-hit areas.

During the month, 11,911 cars were sold compared to September’s figure of 10,405 units, an increase of 14 per cent, according to data released by the Pakistan Automobile Manufacturers Association on Thursday.

Higher sales despite rising prices have left some analysts baffled. “Surging Japanese yen against the rupee, lower agricultural income and depressed demand from flood-affected areas along with high interest rates are a recipe for lower car sales,” commented BMA analyst Sana Bawani.

“The rupee has already depreciated by 15 per cent so far in 2010 and car-makers have kept announcing price increases,” she added. “Continuous price increase may in fact be the reason for the rise in demand for cars.”

She asserted that “car dealers anticipate that prices will rise further and they may be stocking up to lock in higher profits.”

Production of cars also stepped up as 12,168 cars were produced in October compared with 10,021 units in the preceding month.

Sales of trucks, buses slow down

Sales and production of trucks and buses declined in the month under review as 211 units were manufactured against 326 units produced in September. Sales also dampened to 237 units from 343 units in the preceding month.

Meanwhile, sales of motorcycles and three-wheelers improved slightly to 67,565 units from 61,233 units, after lacklustre demand in the first three months (July-September) of the current fiscal year.

InvestCap analyst Abdul Azeem downplayed the impact of losses to the auto sector due to recent floods in the country. “Prices of cotton and sugarcane have skyrocketed in recent days,” said Azeem highlighting that this will off-set losses faced by agriculturists.

“Going forward their earnings will improve and so will their ability to afford new automobiles,” he added.

Experts appear divided over the future trend in car sales, as they concur that prices of cars are likely to keep rising in coming weeks because of weakening rupee against Japanese yen.

End.

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Re: Pakistani Economic Stress Watch

Postby Arjun » 14 Nov 2010 12:31

Good overview document on Pak economy from the ADB. This is dated early 2010...does not incorporate consequences from the flooding- http://www.adb.org/Documents/Books/ADO/2010/PAK.pdf

Trade deficit is not really that big of an issue, even as % of GDP still less than Indian figure... what is really killing Pakistan is the capital account deficit (low FDI / FII inflows); external debt repayment, inflation, fiscal deficit, and low foreign exchange buffer.

What seems to be primarily sustaining Pakistan is the remittances from its workers abroad, and the aid / external debt from multilateral institutions.

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Re: Pakistani Economic Stress Watch

Postby Arjun » 14 Nov 2010 13:08

Armitage and Sam Berger want the US to provide preferential access to Pakistani textiles: US study urges market access for Pakistani textile products

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Re: Pakistani Economic Stress Watch

Postby RamaT » 14 Nov 2010 14:32

Lalmohan wrote:you know shiv - your model above corresponds quite well to the apartheid era south african economy
world class ultra modern amenities and infrastructure for 2-3m and full-on 3rd world for 30m
replace feudals with white farmers and landowners and the rest pretty much fits


This is an apt starting point for a comparison.. however the conclusion that Pakistan is going to fall apart is not the inevitability that this thread assumes.

There are several major forces, both internal and external, keeping Pakistan coherent. Unlike SA, where there were several negative external pressures which wore down that system until it could not manage the internal stresses and so had to change.

3.5 friends, as everyone here calls them - When both the USA and China are counted among them, the 1st and 2nd largest economies on the planet, then that's a really big advantage. Loans/grants/etc, the Pakis are willing to sell themselves for the next hit of money and these two are happy to oblige.. for decades, if need be.

The army - The center of the Paki elite. If things ever got truly hairy they would re-instate military rule. Corrupt, but less so than the civilians and they'll make sure the buses run on time. Economy grew at 9% rate under Musharraf.

External Remittances from migratory Pakis - Helping manage the deficit.

Nooks - Self explanatory, keeps military pressure on them at bay and gives room to muddle through.

India - No pressure applied and always willing to reconcile, even moreso with US pressure. There is not incentive for the elites of Pak to compromise on their demands as they see India willing to be reasonable and 'meet them in the middle' eventually, so why not kick the can down the road and see what they can pull in the meantime. Kargil did show the direct route won't work, hence the parliament and Mumbai. India needs teeth to scare the dog back into its hole.

Inertia - The current system is flawed, corrupt, unjust and utterly morally bankrupt in its failure to help the non-elites. However, it functions well enough that the elites have managed to keep being the elites for 50 years.. and with the constant ability to keep going they've got the national psychology behind them.

In the Paki case the net effect is to help their current status quo and buy them time to figure a way out, which may be possible with the discovery of $1 trillion in commodities under their feet. So, unless some major events can counter these(and other.. not a complete list) forces I just don't see them falling down, for the next decade at least.

Some thoughts on what could lead to them failing..

1. US leaves Afghanistan, stops caring about Paki's again and cuts off the blank check.

2. China economy slows down and their need for commodities wanes causing a serious drop in world prices of commodities.

3. Continued deforestation and second or third major floods which destroy a major portion of industrial base, not just rural farmland.

If some combination of these events were to happen then that would be a major jolt to their system, but without this I don't see a plausible scenario for their failure... just wishful thinking.

Any arguments to counter my viewpoint and make the case for their failure in the next 5 - 10 years, deeply appreciated.

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Re: Pakistani Economic Stress Watch

Postby SSridhar » 14 Nov 2010 16:29

RamaT wrote:3.5 friends, as everyone here calls them - When both the USA and China are counted among them, the 1st and 2nd largest economies on the planet, then that's a really big advantage. Loans/grants/etc, the Pakis are willing to sell themselves for the next hit of money and these two are happy to oblige.. for decades, if need be.

RamaT, there is a difference in the help given by the US and PRC. The US gives hard cash, and in large and generous scoops, whereas PRC is involved in projects like Chashma, highways, dams etc.

The army - The center of the Paki elite. If things ever got truly hairy they would re-instate military rule. Corrupt, but less so than the civilians and they'll make sure the buses run on time. Economy grew at 9% rate under Musharraf.

That may not be true, the highlighted part. But, the US is invariably more generous whenever the PA rules. It was either intentional, or circumstances so developed or circumstances were created to make TSP indispensable to the US.

Some thoughts on what could lead to them failing..

I too believe that they are not going to implode completely any time soon if they manage their situation prudently. I am convinced now that the Pakistani economy might not be allowed to fail so completely that it led to disintegration. It could be terror that might unravel them. But, I would add another condition here. If the Pakistanis anger the US sufficiently that they decided enough was enough, then we can see some fireworks. It will then be PRC vs. US & India vis-a-vis TSP. PRC might still not want TSP to go downunder. Increasingly, TSP is pledging itself to the PRC pawnbroker.

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Re: Pakistani Economic Stress Watch

Postby chetak » 14 Nov 2010 16:44

How easily these guys get into their begging bowl mode!!


http://www.dawn.com/2010/11/14/international-community-must-help-pakistan-malik.html


International community must help Pakistan: Malik
DAWN.COM
(38 minutes ago) Today

ISLAMABAD: Interior Minister Rehman Malik on Sunday said that if the international community cannot give funds then it should not keep telling Pakistan to “do more” either.

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Re: Pakistani Economic Stress Watch

Postby Arjun » 14 Nov 2010 18:11

We should leave it to the markets (credit default swaps market in this case) as being the most efficient judge of the propensity of sovereign default by a nation. For the last year or so Pakistan has consistently appeared in the Top 4 of the list of nations most likely to default, superseded only by countries like Greece and Argentina: http://www.cmavision.com/images/uploads/docs/CMA_Global_Sovereign_Credit_Risk_Report_Q3_2010.pdf

When Argentina defaulted in 2001- that led to sharp devaluation of the Argentine peso, contraction in GDP by 10% the following year, and the country being locked out of the international capital markets for several years.....However there is some thought that the cost of default is not high enough... This article provides good perspective- http://www.economist.com/node/15814868

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 14 Nov 2010 18:23

PDF being held after three-year gap
No, not that PDF (not the deaf and dumb variety). The other PDF (begging, imploring and pleading variety).

Pakistan’s Finance Minister Hafeez Shaikh said on Sunday that Pakistan is currently going through a phase of transition. No $hit Sherlock

...the objective of holding the Pakistan Development Forum was not to obtain aid from the world. :lol:

If the above is true, then why this:
Countries participating in the Pakistan Development Forum were going to be made aware of the losses Pakistan suffered due to the floods and also of the various developmental measures taken by the government.

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 14 Nov 2010 19:53

Rupee shed 37pc value against dollar since April 2008
And, the blame goes to:

The rupee has shed 37 percent value against the dollar under the two and a half year rule of the current government due to ebbing investor confidence on the political system, analysts said on Saturday.


Jai Ho!

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Re: Pakistani Economic Stress Watch

Postby Ashoka » 15 Nov 2010 00:42

Somebody please please convince me this is not going to actually happen. This news has been around for a while now.



$50 bn = TSP's all foreign debt. Is the world going to be actually fool enough to grant such a panacea to TSP?

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Re: Pakistani Economic Stress Watch

Postby Brad Goodman » 15 Nov 2010 02:55

^^^ who has the stomach to take the $50B hit? Lets start with movers and shakers of the world

1) USA: Ombaba was dancing to koli tunes in mumbai for $10B how can he get anything for pakis

2) Cheena: Yes they have trillion in foreign exchange but cheena is a miser business man. Unless pakis sign up huge collateral like copper/ gold mines or something more valuable they are not going to invest a penny

3) Saudi: They dont care of writing off any debts for pakis they are already subsidizing oil imports and providing asylum to deposed leaders no real incentive to pay up

4) EU: you have seen how they reacted to Greece.

5) Japan: no incentive again

All paki masters 3.5 + are only interested in keeping paki head above water not pull it to dry lands. So some free trade in textile carrot or debt restructoring does the trick why do anything more. Its like you can give a whore $10 tip after her services just to keep her looking forward to your next visit . Giving her a diamond necklace is an overkill :rotfl:
Last edited by Brad Goodman on 15 Nov 2010 06:31, edited 1 time in total.

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Re: Pakistani Economic Stress Watch

Postby shiv » 15 Nov 2010 05:59

RamaT wrote: the conclusion that Pakistan is going to fall apart is not the inevitability that this thread assumes.

Whare does this therad assume that?

RamaT wrote:The army - The center of the Paki elite. If things ever got truly hairy they would re-instate military rule. Corrupt, but less so than the civilians and they'll make sure the buses run on time. Economy grew at 9% rate under Musharraf.

Are you trying to say that the army is not in control now?

Which part of the economy grew at 9%? The parts that were measured? Or the parts that don't even come under the purview of "economic indicators". How are you so sure that the latter did not grow at 15%, outpacing the piddly 9% of the "white" economy? Do you have any way of measuring and comparing the two? What percentage of teh Pakistan economy is white and how much is black. What proportion of Pakis live off the white economy and how many live by the black economy?

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Re: Pakistani Economic Stress Watch

Postby Ambar » 15 Nov 2010 06:54

Brad Goodman wrote:During September, the current account was surplus with $447 million which reduced the July-September deficit by 7.1 per cent.

According to State Bank, in October 2010, an amount of $855 million was sent home by overseas Pakistanis, up 12.77 per cent or $96.81 million compared to $758 million received in the same month last year.



So I guess the follow-up could be to get a break-up figures by country from where pakis are remitting money to fuel terroristan. Also then drill down to see what kind of activities the do these jihadis engage in those places. Example most pakis in US are either cabbies or own shops. With very tiny percentage in IT or ITES. In Gulf it is labor class.


Trouble is, a good amount of money is channeled through 'Hawala' and that hardly leaves a trace.Most labor class in ME countries prefer the hawala route than a legitimate channel because of the speed of delivery and lack of bank accounts.Pakis have gone a step further and are using this 'sharia' instrument to transfer funds outside EU and North America (remember, even Faisal Shehzad sent/received funds through hawala channels in NY).

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Re: Pakistani Economic Stress Watch

Postby shiv » 15 Nov 2010 08:17

Ambar wrote:Trouble is, a good amount of money is channeled through 'Hawala' and that hardly leaves a trace.


Absolutely. Economies existed before economists did and before economic data were published. Or indeed invented and defined.

"Economic data" published by a government refers only to the money that the government can actually measure or track. The structure of nation states is such that it requires the government to control a huge percentage of the economy so as to have control over which way the country goes.. If the government for example controls and measures only 20% of the economy - the government is weak and powerless. Technically such a government can be brought down. But it can also be supported by judicious infusion of funds to support "chowkidars"(Paki army) - i.e physical security for the government so that it survives.

The problem in Pakistan is that the "world" represented by the USA and 3.5 recognise only the "Government of Pakistan and its army". That government has no control over much of the economy of Pakistan that survives on its own, without economists or statistics. But via the Paki army that government has physical control over much of Pakistan (mainly in Pakjab and Sindh). If that government we to fail Pakistan would have multiple power centers of Pahstuns, Baluchis and other landlords. That is the chaos that neither the USA nor China wants to see. The easiest "fix" is to support the Pakistan army. Supporting the Paki army means supporting an anti-India cause.

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Re: Pakistani Economic Stress Watch

Postby Prem » 15 Nov 2010 08:22

Pakistan seeks $50bn foreign debt waiver
By Khale- eq- Kahani
ISLAMABAD: As federal and provincial economic teams assured the international community on Sunday of their resolve to introduce wide-ranging taxation measures, including Reformed General Sales Tax (RGST) and taxes on agriculture and real estate, Interior Minister Rahman Malik made a plea for waiving the $50 billion foreign debt to help Pakistan move ahead with the war against terrorism.
On the other hand, representatives of the international community attending a two-day Pakistan Development Forum asked the government and people of Pakistan to take the lead in reconstruction and rehabilitation of flood-hit areas.Most of the foreign delegates repeatedly asked the authorities about steps they were taking to mobilise resources.Two provinces – Sindh and Punjab – informed the meeting that despite facing opposition they were moving ahead on the RGST and planned to raise substantial resources through tax on agriculture and property.Interior Minister Rahman Malik said that Pakistan was fighting terrorism as a frontline state and deserved that its $50 billion foreign debt was written off.

http://www.dawn.com/2010/11/15/pakistan ... aiver.html

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Re: Pakistani Economic Stress Watch

Postby Arjun » 15 Nov 2010 08:35

Seems to me Pakiland is setting the stage gradually for an eventual default on its obligations...or negotiating for drastic restructuring of the debt. Waiver is not going to happen.

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Re: Pakistani Economic Stress Watch

Postby shiv » 15 Nov 2010 08:42

The "world" as represented by the 3.5 seem to be telling the Paki government that they need to convert the black economy of Pakistan into accountable "white economy" that can then be used for development and repayment of loans. Pakis are unable or unwilling to do that. In a way they are doing us (India) a favor. If Pakistan really starts collecting tax and repaying loans - hey will get even bigger loans to fund more arms against India.

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Re: Pakistani Economic Stress Watch

Postby RamaT » 15 Nov 2010 09:33

SSridhar wrote:
RamaT wrote:3.5 friends, as everyone here calls them - When both the USA and China are counted among them, the 1st and 2nd largest economies on the planet, then that's a really big advantage. Loans/grants/etc, the Pakis are willing to sell themselves for the next hit of money and these two are happy to oblige.. for decades, if need be.

RamaT, there is a difference in the help given by the US and PRC. The US gives hard cash, and in large and generous scoops, whereas PRC is involved in projects like Chashma, highways, dams etc.


True.. but that is a transient phase. The Paki elites are interested in keeping power and attacking India.. being a client to a larger state lets them do that. The Chinese are mostly interested in achieving access to Gwadar and other ports in the Arabian Sea and keeping the Paki's as a thorn in India's side, which one is a larger motivation right now.. I'm not so sure. But once they are shipping oil from there into China and bypassing the sea lanes, then that will be the biggest reason for the Chinese to be in Pakistan as their economy will depend upon it, and so money/military/infrastructure aid will rain down. Regardless my original point of them sustaining themselves through China/US remains.

SSridhar wrote:
RamaT wrote:The army - The center of the Paki elite. If things ever got truly hairy they would re-instate military rule. Corrupt, but less so than the civilians and they'll make sure the buses run on time. Economy grew at 9% rate under Musharraf.

That may not be true, the highlighted part. But, the US is invariably more generous whenever the PA rules. It was either intentional, or circumstances so developed or circumstances were created to make TSP indispensable to the US.


Arguing the degree of which face of a two faced liar is more of a liar is an exercise in futility. My point was to look at the measurable fact.. and a measured 9% growth rate under Musharraf is fact. Whether that's because the Military took more or less out of the pot than the civilians would have, or that their ability to get more money from the US doesn't matter. The result was a Pakistan better off.. and the only way that collapse will occur there so that the current regime is removed is through a massive public crisis which requires a failure in the economy. If people are being fed, they won't riot.. as China has shown.

SSridhar wrote:
RamaT wrote:Some thoughts on what could lead to them failing..

I too believe that they are not going to implode completely any time soon if they manage their situation prudently. I am convinced now that the Pakistani economy might not be allowed to fail so completely that it led to disintegration. It could be terror that might unravel them. But, I would add another condition here. If the Pakistanis anger the US sufficiently that they decided enough was enough, then we can see some fireworks. It will then be PRC vs. US & India vis-a-vis TSP. PRC might still not want TSP to go downunder. Increasingly, TSP is pledging itself to the PRC pawnbroker.


That would be a nice scenario, however I don't see it happening(in the short term.. once China is the greater benefactor all bets are off) the Pakis know which side butters their bread. And the US is scared to death of the Paki nooks so every effort will be made to buy off the right people to keep the country upright and pointed in the 'right' direction.

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Re: Pakistani Economic Stress Watch

Postby Arjun » 15 Nov 2010 09:37

RamaT wrote:My point was to look at the measurable fact.. and a measured 9% growth rate under Musharraf is fact.

Can you provide some backup for this assertion?

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Re: Pakistani Economic Stress Watch

Postby RamaT » 15 Nov 2010 09:50

shiv wrote:
RamaT wrote: the conclusion that Pakistan is going to fall apart is not the inevitability that this thread assumes.

Whare does this therad assume that?


Um.. the first post of the thread by Prem? "The economic collaspe of Pakistan is not a question of if but when ."

shiv wrote:
RamaT wrote:The army - The center of the Paki elite. If things ever got truly hairy they would re-instate military rule. Corrupt, but less so than the civilians and they'll make sure the buses run on time. Economy grew at 9% rate under Musharraf.

Are you trying to say that the army is not in control now?


I am well aware that the Paki army wields major power, however there is overt and covert control. When they have overt control they don't have to worry about offending any interests and can steamroll their will without issue.

shiv wrote:Which part of the economy grew at 9%? The parts that were measured? Or the parts that don't even come under the purview of "economic indicators". How are you so sure that the latter did not grow at 15%, outpacing the piddly 9% of the "white" economy? Do you have any way of measuring and comparing the two? What percentage of teh Pakistan economy is white and how much is black. What proportion of Pakis live off the white economy and how many live by the black economy?


So can you tell me how fast the unmeasured parts of the economy grew? :rotfl:

I was basing my comment off the data here:

http://www.google.com/publicdata/explor ... l=en&dl=en

This is as good a source as I have found, if you have better I'd be very appreciative if you could point me to it.

I'm not a specialist in Paki economy and I don't wish to become one.. however large the black/rural economy is.. 10%, 30%, 50%, it's not going to grow at large rates without major industrialization and other modern inputs.. and those can be tracked.

*edited to fix proper quoting
Last edited by RamaT on 15 Nov 2010 11:25, edited 1 time in total.

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Re: Pakistani Economic Stress Watch

Postby RamaT » 15 Nov 2010 09:55

Arjun wrote:
RamaT wrote:My point was to look at the measurable fact.. and a measured 9% growth rate under Musharraf is fact.

Can you provide some backup for this assertion?


I'm using the World Bank Development indicators as browsable through http://www.google.com/publicdata and for some reason I made a mistake and read 2005 as 8.67%, should be 7.67.. so the above should read 8%. Mea Culpa, apologies.

This is Pakistan's growth rate as they've measured it since 1960.

http://www.google.com/publicdata/explor ... l=en&dl=en

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Re: Pakistani Economic Stress Watch

Postby Arjun » 15 Nov 2010 10:17

Over the last 15 years, Pakistan has shown 2 years of growth above 7% (though never above 8%) - 2004 and '05. This coincides with the years when the global economy was robust ( you can overlay a graph of India's growth and see that the highs are reached at the same time)...Don't think it has anything to do with the military being in power.

Of course all of this assumes that Pakistani statistics are accurate, which is a big IF.

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Re: Pakistani Economic Stress Watch

Postby shiv » 15 Nov 2010 10:24

RamaT wrote:
So can you tell me how fast the unmeasured parts of the economy grew? :rotfl:
<snip>
This is as good a source as I have found, if you have better I'd be very appreciative if you could point me to it.

however large the black/rural economy is.. 10%, 30%, 50%, it's not going to grow at large rates without major industrialization and other modern inputs.. and those can be tracked.


You have answered your own question.

Unmeasured economy would reflect only in personal well being of some Pakistanis. Otherwise it would reflect in "measurable factors" like literacy, healthcare, infrastructure (electricity/water) and tax collection. None of these has seen much change, but yet it is alleged that the Pakistan "economy has grown" by 9 or 8 or 7.67 or mea culpa per cent.

Now guess where this "growth" has reflected. Pakistan has shown an increase in the defence budget, the number of private TV channels owned and in number of malls built. At the same time there has been a "measurable inflow" of something more that 3 bilion USD per year into Pakistan - of which 1.5 billion is for defence alone.

Now guess how the "economic growth" is happening?

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Re: Pakistani Economic Stress Watch

Postby RamaT » 15 Nov 2010 10:29

Arjun wrote:Over the last 15 years, Pakistan has shown 2 years of growth above 7% (though never above 8%) - 2004 and '05. This coincides with the years when the global economy was robust ( you can overlay a graph of India's growth and see that the highs are reached at the same time)...Don't think it has anything to do with the military being in power.

Of course all of this assumes that Pakistani statistics are accurate, which is a big IF.


Sure, here you go:

http://www.google.com/publicdata/explor ... l=en&dl=en

If you look at '93 on when there was massive growth.. US/China/India the Paki's do ok.. but nowhere near like post 9/11 growth. The major distinction, this was the Musharraf era.


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