Pakistani Economic Stress Watch

[nachiket]

^^Guys the above discussion is more suited for the endgame thread I mentioned above.

[Peregrine]

What would happen if inflation touches 50-60% and PKR falls to 200 vs Dollar. I would think there will be streams of refugees towards India. How would be react in such a scenario?

Given they way they are Islamised , they will probably fight and go westwards through Afganistan, Iran , Turkey to Europe by hook or crook, Some firing by BSF will keep them in check.

Aditya_V Ji :

I beg to differ. Any destabilization of Terroristan will have the Wagah Candle Kisser and Sickular Brigade along with the Khangress Goons will force the Indian Government to accept Tens of Millions - if not more -of Terroristani Muslims to be admitted into India as Iran would seal its Border with Terroristan. The same will happen in The case of Afghanistan and Ilon Blothel China.

Only Destination will be I N D I A! Please read my Post of 05 Apr 2019 18:13 on THIS PAGE

Cheers

[Peregrine]

Govt’s debt surges to Rs27.6tr by Feb-end

ISLAMABAD: The federal government’s debt has soared to Rs27.6 trillion with a net addition of Rs3.4 trillion in just eight months at a pace of nearly 14% due to low tax revenue, high expenditure and currency depreciation.

From July through February 2018-19, the government on an average added Rs14 billion a day to its debt, which included almost six and a half months of Pakistan Tehreek-e-Insaf (PTI) government, according to the State Bank of Pakistan’s (SBP) statistics.

There was a net addition of Rs3.4 trillion from July to February, which was higher by 13.9% when compared with June 2018 statistics.

Cheers

[Peregrine]

What would happen if inflation touches 50-60% and PKR falls to 200 vs Dollar. I would think there will be streams of refugees towards India. How would be react in such a scenario?

Given they way they are Islamised , they will probably fight and go westwards through Afganistan, Iran , Turkey to Europe by hook or crook, Some firing by BSF will keep them in check.

Aditya_V Ji :

I beg to differ. Any destabilization of Terroristan will have the Wagah Candle Kisser and Sickular Brigade along with the Khangress Goons will force the Indian Government to accept Tens of Millions - if not more -of Terroristani Muslims to be admitted into India as Iran would seal its Border with Terroristan. The same will happen in The case of Afghanistan and Ilon Blothel China.

Only Destination will be I N D I A! Please read my Post of 05 Apr 2019 18:13 on PAGE 64

Cheers

[Vips]

What would happen if inflation touches 50-60% and PKR falls to 200 vs Dollar. I would think there will be streams of refugees towards India. How would be react in such a scenario?

Given they way they are Islamised , they will probably fight and go westwards through Afganistan, Iran , Turkey to Europe by hook or crook, Some firing by BSF will keep them in check.

Aditya_V Ji :

I beg to differ. Any destabilization of Terroristan will have the Wagah Candle Kisser and Sickular Brigade along with the Khangress Goons will force the Indian Government to accept Tens of Millions - if not more -of Terroristani Muslims to be admitted into India as Iran would seal its Border with Terroristan. The same will happen in The case of Afghanistan and Ilon Blothel China.

Only Destination will be I N D I A! Please read my Post of 05 Apr 2019 18:13 on THIS PAGE

Cheers

My fav scenario, a cross grid formation along the entire border every 100-200 meters of BSF MMG Pickets/Post. The MMG will have interchangable barrels and will be supported by truck loads of belt fed ammo. Last but not the least the BSF will also have standing instructions to fire on the Indian side if any jholawala/candle kissing jaichand type groups come to support the jehadi immigration to India.

[yensoy]

We should be in a position where we will help them economically in exchange for non-revokable blocks of territory minus population which will then be integrated into India. That is a fair deal. We can start with Kartarpur sahib and Sharda peeth in exchange of say 200M $.

[Kashi]

Why would they go for it when they've already signed off large amounts of their territory to China for even bigger sums?

[yensoy]

Because they are still broke and still need the money to pay for their habits.

[Bart S]

Also, the Chinese have just thrown them some morsels here and there mixed in with usurious loans, so they haven't really gotten any 'bigger sum' of money from the Chinese. If they want anything resembling a fair deal they would have to deal with the West or India.

[K Mehta]

Take that you kuffars
Pakistan has abolished statistics
Na raheiyga baans na bajegi bansuri

[Anujan]

Serious question:

Why is Pakistan economy suddenly in Pakistan?

Did borrowing related to CPEC projects get invested in unproductive infrastructure and therefore economy did not benefit and Pakistan was suddenly saddled with debt?

Oil prices have been low and stable. Internationally capital has been relatively cheap. They have China and Saudis propping them up. Why the sudden turn into Pakistan?

Their economy was always iffy. But suddenly it seems to have taken the turn for the worse. Why?

Only serious analysis/answers please.

[jamwal]

In all seriousness, they've been sliding down slowly and gradually due to their own strategic brilliance and multiple other reasons . Modi just poured some lube on the slide to make the process faster.

[Vivasvat]

Economic Roundup April 6, 2019
https://youtu.be/HZfY4W7f4qM

naPak awaam is crying, regretting bringing IK to power. Lots have lost a livelihood, and more will lose their jobs.

[CalvinH]

I can list few:

CPEC projects didn't helped Pakistan much. Major investment was in power generation but its not been able to reduce the circular debt from the private power generation players. I am not sure why this is the case. At least one major plant from CPEC is not functional anymore

PKR devaluation is leading to higher factor cost for industries despite stable global oil/gas prices. Its also leading to Inflation that is further corroding the productivity. This is reflecting in lower exports despite cheaper PKR. Thus trade deficit is increasing instead of decreasing.

PSEs are bleeding real money. Government is not able to stop this bleeding.

International capital borrowing has never been cheap for Pakistan. Its worse now with FATF issues. The lending from friendly countries was used for debt servicing and managing current account deficit. So its not going to improve the credit situation of Pakistan.

Remittances are not keeping pace. The growth was 100% between 2010-2014 vs close to 30% between 2014-2018 (please check)
-----------------------------------
Its surprising that Pakistan's economic condition is worsening significantly since Im the dim came to power. My own guess is that real things are now showing up. These were shoved under the carpet in PML-N government that drained the reserves and kept them hidden. Cheaper oil helped.

Paki FM who was saying few months ago that they will negotiate with IMF on their own terms is now saying that they nation will become bankrupt if they dont go to IMF.

[habal]

pakistan always had balance of payments crisis, what prevented it from it going full blown was

1. US aid and coalition support funds. This helped pakistan roll over external borrowings and use remittances and exports for growth.

2. CPEC was supposed to bring in funds, but there was a big accounting fraud/mismanagement on purpose or otherwise of repaying all CPEC debt in dollars. This is what broke camel back. It was found that all Chinese 'investment' in CPEC was dollar denominated debt to be paid back with 6% interest.

Net Net, no coalition funds, no military aid, no financial aid from US even with which they had a hard time repaying external borrowings and now on top CPEC dollar-denominated debt.

Mismanagement of economy and energy sector also meant highest energy tariffs in region and world, making exports uncompetitive altogether. Actually one reason for increase in energy tariffs was IMF demand to increase energy tariff whenever pakistan went to it for a program.

No water economy: mismanagement of water which is channelised to a few big farmers and landowners in punkjab.

Landholding: No land reforms done and biggest landlord sublets his land to a snaller jagirdar who in turn rents out land to farmer. Only farmer works, rest of chain only collects rent. 50% of income has to be given by farmer to landholder.

No incentive to increase agricultural output for farmer.

Apart from this army, police, sundry crooks all want a cut from handful of profit-making entities. Thus they too shut shop or partially shut shutters, no motivation to increase productivity.

NET NET no trade, no agriculture, no industry, no water management, circular-debt laden energy sector, non-transparent and prohibitive pricing for electric energy, cpec dollar debt, no coalition or US govt dollars, maturing IMF debt from past, loans/bonds raised from past all combine together to create perfect storm.

[vimal]

Economic Roundup April 6, 2019


naPak awaam is crying, regretting bringing IK to power. Lots have lost a livelihood, and more will lose their jobs.

The interviews of mango abdul's is shockingly unanimous on blaming the great Khan. Feel like ISI is now slowly turning the screw on the great Khan. Time for a "Mere aziz humwatano".

And btw entire program uses the word bomb for everything bad happening. It seems pures are used to bum so much that they compare everything to bum.

[partha]

How does IMF bailout decision process work ? And how much can we influence that ?

FATF clearance is needed for IMF bailout and India is in the panel at FATF to review Pakistan's case Pakis have been crying about it.

[partha]

The interviews of mango abdul's is shockingly unanimous on blaming the great Khan. Feel like ISI is now slowly turning the screw on the great Khan. Time for a "Mere aziz humwatano".

Didn't Zardari announce a sit in protest in Islamabad (he conveniently didn't give a date)?. Shariffs are also out of jail. So it looks like some back room negotiations are happening between opposition and GHQ.

[CalvinH]

Overall Pakistani economy was able to sustain on coalition Military and economic support + remittances between 2004-2014. However, the money wasn't put to productive economical use. After 2014 PMLN government managed using CPEC funds and draining their forex reserve to keep PKR strong while believing that CPEC investments in Infra would turn them around.

Pakistan is going downhill fast with no respite on the horizon. Even the IMF bailout would not last long.

[Mort Walker]

My fav scenario, a cross grid formation along the entire border every 100-200 meters of BSF MMG Pickets/Post. The MMG will have interchangable barrels and will be supported by truck loads of belt fed ammo. Last but not the least the BSF will also have standing instructions to fire on the Indian side if any jholawala/candle kissing jaichand type groups come to support the jehadi immigration to India.

If anything, I do not think the IA or the BSF have the ethos of shooting civilians of Paki caravans full of elderly, women and children, even if they contain jihadi men in them. This will become a real problem in the next 2-3 years because these caravans will have Paki minority Hindus, Shia and Ahmadiyya who will face ethnic cleansing when the Paki economy goes tits-up in the next few years. In any case, it's too early to worry about this. The first order of business it to push TSP over the edge economically, but that won't be too hard since they're so good at self-destruction.

[sanjaykumar]

Just leave them be.

Never interrupt your enemy when he is making a mistake-Napoleon.

[MeshaVishwas]

In my view, it is a combination of factors including the sheer uncompetitive exports(which has not risen much in Dollars) , the excessive imports and chronic circular debt.
They still have a low tax base and over reliance on foreign remittance and this could be a potential disaster if no change is seen.
And addressing the Musharraf in the room, the Defence budget is simbly unsustainable.(and we need this to keep rising)
Also, the Oil deferred payment mechanism with the Saudi Barbarians and the UAE suggests that Oil prices which did go over $80 for Brent, briefly, did impact the Current Account massively and any similar up moves by Crude Oil will be terrible for their CAD.

[vimal]

We should keep spicing up the borders regularly to help them slide along faster.

[nachiket]

Serious question:

Why is Pakistan economy suddenly in Pakistan?

Did borrowing related to CPEC projects get invested in unproductive infrastructure and therefore economy did not benefit and Pakistan was suddenly saddled with debt?

Oil prices have been low and stable. Internationally capital has been relatively cheap. They have China and Saudis propping them up. Why the sudden turn into Pakistan?

Their economy was always iffy. But suddenly it seems to have taken the turn for the worse. Why?

Only serious analysis/answers please.

I think the tldr version is that pakis have been living way beyond their means for far too long and the chickens are coming home to roost. This has happened several times earlier and they always got away with IMF bailout and/or foreign loans from SA, China, etc.

But now the IMF bailout conditions have become stricter and the Chinese and Saudi loans aren't cutting it. For too long they kept the PKR overvalued for H&D reasons, eating up their forex reserves in the process, and pakis got addicted to cheap imports. Similarly they got addicted to cheap fuel and electricity too, despite power distribution sector being in ever growing circular debt and the fuel bill increasing in dollars but not being passed through to consumers.

Just look at the rona dhona about Petrol price increasing to 100PKR/liter. 100 PKR! That is 50% less than what we pay in India and those entitled brats are still complaining.

Eventually spending money you don't have will catch up with you. There is no alternative to what the pti govt. is doing by devaluing the PKR, and increasing fuel and other prices. pakis will just have to get used to it.

[Singha]

once upon a time, a pak general did indeed make a joke about yindu bania vs pak sherdil mentality'

the yindu will take what little s/he has and work a lifestyle around it, eating sookhi roti and veggies modestly and trying to save for the future

the paki sherdil would rather have some chicken in the pot and live large than worry about the future

[Rahul M]

My fav scenario, a cross grid formation along the entire border every 100-200 meters of BSF MMG Pickets/Post. The MMG will have interchangable barrels and will be supported by truck loads of belt fed ammo. Last but not the least the BSF will also have standing instructions to fire on the Indian side if any jholawala/candle kissing jaichand type groups come to support the jehadi immigration to India.

If anything, I do not think the IA or the BSF have the ethos of shooting civilians of Paki caravans full of elderly, women and children, even if they contain jihadi men in them. This will become a real problem in the next 2-3 years because these caravans will have Paki minority Hindus, Shia and Ahmadiyya who will face ethnic cleansing when the Paki economy goes tits-up in the next few years. In any case, it's too early to worry about this. The first order of business it to push TSP over the edge economically, but that won't be too hard since they're so good at self-destruction.

propaganda in the border areas about how eevil yindoos treat paki momeens should help.

[Vips]

If they face hunger in shitland, they will take the chance and attempt to cross over thinking there are 20 crore followers of pissful religion in India and hence they will be able to get support and settle in. No option but to bobby trap (mine) atleast 1-2 kms wide stretch on the Indian side along the whole border and prepare the BSF/Army to do what is required to be done. Otherwise it is truly Game Over for Bharat.

[yensoy]

BSF/Army will not fire on unarmed non-criminal civilians, especially families. It will never happen and should never happen, it is against our dharma of soldiering.

Mines, on the other hand, have no such compunctions and should be liberally used. Seeing one blow up in front of you is a big deterrent.

I doubt there will be that kind of uncontrolled human exodus into India. The populated areas are very well fenced and patrolled; the unpopulated ones are truly remote & hard to reach with any probability of success especially for starving families. Even before this happens, there will be some kind of humanitarian support pouring in, even we may have to send some food across while we negotiate the defanging of t'stan, removal of its nukes and potential subdivision into 4.

[Nikhil T]

Madarsa economic theory - when you don’t like open market decisions, you threaten every market participant. Great job Taliban Khan.

Government announces crackdown as dollars vanishes in open market

KARACHI: Signs of panic are now appearing in foreign currency markets as the dollar touched Rs148 in open trading on Friday and the information minister announced that “a full-fledged operation against dollar hoarding and speculative currency trade” is going to be launched. Meanwhile, the finance minister issued a renewed assurance that the “rupee is in equilibrium” and “there is no reason for big devaluations”.

The open market has been shrugging off the government’s assurances for a long time. On Friday, the State Bank held its third meeting in five days with the heads of exchange companies to find ways of bringing the open market rate under control. Like the previous such meetings, this one too appeared to have ended inconclusively.

Following the meeting, Forex Association of Pakistan president Malik Bostan told Dawn that it had been decided that only genuine buyers could buy dollars from the open market. However, he said there was no discussion about any impending crackdown or law enforcement action of any sort.

Dealers say exchange rate hits Rs148 amid shortages

The meeting focused on the supply of dollars in the open market and appropriate rates for selling. However, the State Bank did not extend its offer to provide dollars to meet its shortage in the market, he said.

ARTICLE CONTINUES AFTER AD

Mr Bostan described “genuine buyers” as “travellers, students, pilgrims and people who need foreign exchange for health purposes”. When asked how they will determine whether a buyer is genuine or not, he said: “We will check their documents.”

As the meeting at the State Bank was under way, Finance Minister Asad Umar was busy trying to assuage sentiments in another section of the financial markets. In a video call to brokers at the Pakistan Stock Exchange, he did his best to rule out further devaluation.

Highly placed sources told Dawn that a meeting was held in Islamabad on Friday to specifically discuss the exchange rate. According to them, the meeting, chaired by the finance minister, decided to launch a crackdown on currency hoarders and speculators. “Verbal directives were issued by the interior secretary who directed the FIA (Federal Investigation Agency) to consult deputy governor of the State Bank for this crackdown,” the sources added.

Later, Information Minister Fawad Chaudhry took to the social networking website to announce the decision in a tweet riddled with typos. “Government has directed FIA to launch a full fledged operation against Dollar hoarding, and speculative currency trade the operation is being launched in coordination with State Bank and ministry of Finance,” he wrote. In less than four hours, the tweet had been liked by more than 5,100 people and re-tweeted on by 1,100 others and a lively exchange ensued in its replies.

The State Bank told Dawn later in the evening that it was unaware of any decision about a crackdown. When its spokesman’s attention was drawn to the information minister’s tweet, he only said that “we have not been officially approached” for initiating any crackdown.

He added that there was no law to arrest any person for buying dollars or keeping foreign exchange as investment, but if any institution was found involved in currency hoarding to manipulate the exchange rate, it could be investigated. “We have a mechanism with FIA to probe a case if there is any violation of banking laws and the State Bank can ask FIA to investigate such violations.”

On the street, exchange companies were quoting selling rates of Rs143 to a dollar, mainly because of the pressure from the State Bank, but these were not applicable in the market, according to currency traders.

A top currency dealer, with one of the largest networks in the country, said the dollar was sold as high as Rs148, while he was buying it at Rs146.50. People who sought to buy at the officially quoted rate were told there were no dollars available.

Malik Bostan said the foreign currency market today was dominated by buyers, meaning people trying to buy dollars.

Exchange Companies Association of Pakistan secretary general Zafar Paracha agreed. “Sellers are just 25 per cent of the current dollar trading that means 75pc are buyers, which has drastically reduced the volume of the market,” he claimed. He attributed this to various causes, including the continuing expectation of rupee devaluation and approaching Ramazan.

“During the holy month of fasting, more people travel to Saudi Arabia than in the rest of the year combined,” Mr Bostan said, adding that this month saw a spike in foreign exchange purchases from the open market. After this, comes the Haj season when a second spike is expected.

Asked if he is afraid of a crackdown by the FIA, Mr Bostan said: “We have done nothing wrong, why we should have any fear?” He was adamant that exchange companies were faced with a genuine shortage and were not involved in hoarding the greenback.

[Singha]

https://www.news18.com/news/world/trump ... _top_pos_6

the battle over who owns pakistans a$$ has began in right earnest. bipartisan group of US lawmakers oppose the IMF bailout proposal.

and then there's the saudis who are already in bed. how can 4 lovers occupy one double bed i wonder.

[shashankk]

Maturity of international bond: Pakistan to pay back $1.129 bn next week

ISLAMABAD: Pakistan will have to pay back over $1.129 billion next week on maturity of five year international bond at a time when the country’s net international reserves had already fallen into negative, The News has learnt.


Islamabad will have to make heavy repayments of over $3 billion in last quarter (April-June) period of the current fiscal 2018-19 with $1 billion in each month and the largest lump sum due amount of over $1 billion on account of maturity of international bond would become due next week.

“We will have to pay over $3 billion in last quarter of the current fiscal as principle and mark up on foreign loans and bonds,” said a top official while showing official record of repayments for remaining period of the ongoing fiscal here on Saturday.

Pakistan had launched $2 billion bond on April 9, 2014 during the tenure of the PML-N out of which $1 billion was generated on five-year note at a yield of 7.25 percent and another $1 billion for a period of 10 years at the rate of 8.25 percent. Now the maturity of five years bond of $1 billion would become due next week on April 9, 2019.

Source : https://www.thenews.com.pk/print/454433 ... ional-bond

[Peregrine]

Pakistan's GDP growth to shrink to 3.4pc this fiscal: World Bank – APP

Pakistan's economic growth, after reaching an 11-year high of 5.8 per cent in FY18, is expected to see a decline over the next two years, the World Bank has predicted.

GDP growth will decelerate to 3.4pc in fiscal year 2018-19 and further drop to 2.7pc in FY20 as fiscal and monetary policies are tightened to address macroeconomic imbalances, said the latest edition of the South Asia Economic Focus: Exports Wanted published on Sunday.

The report comes the same week, the United Nations and the Asian Development Bank, both, painted a gloomy picture of Pakistan's position in the region with regard to its GDP growth in 2019.

Cheers

[Peregrine]

Maturity of international bond: Pakistan to pay back $1.129 bn next week

the battle over who owns pakistans a$$ has began in right earnest. bipartisan group of US lawmakers oppose the IMF bailout proposal.

and then there's the saudis who are already in bed. how can 4 lovers occupy one double bed i wonder.

Singha Ji:

Only Three-a-Breast with Terroristani in the Middle having "One" on Top - Simple!

Cheers

[Peregrine]

Fear reigns supreme as PSX slide continues

As the panic-prone investors jettisoned their shares on April 4, sending the benchmark index down to the year’s lowest level (37,516 points), most marketmen whispered that the blame lay squarely on Finance Minister Asad Umar.

Mr Umar had announced, in no uncertain terms, that the country had only two options: either go to the IMF or opt for bankruptcy. He painted a picture of the economy as bleak as he could: GDP growth will be low this year and even lower in the next year while the rupee will further plummet against the dollar.

Cheers

[Peregrine]

S&P BSE SENSEX

Index Current : 38,700.53 - Pt. Change : -161.70 - % Change : -0.42

Market Capitalization of BSE Listed Co. (Rs.Cr.) : 1,51,26,751.24 – $ 1 / I R 69.7950

Market Capitalization of BSE Listed Co. (U S. $.) : 2,167.31 Billion

P S E

Index Current : 36,921.91 - Pt. Change : -599.90 - % Change : -1.60%

Market Capitalization of PSE Listed Co. (Rs. Tr.) : 7,579,300,843,251 - $ 1 / T R 143.00

Market Capitalization of PSE Listed Co. (U S. $.) : 53.00 Billion

B S E : P S E : : 40.89 : 1

Cheers

[Vips]

You kafir look at how we are making a relentless march. Mard-e-momeen will not be bogged down till we achieve 72:1.

Look at how for every one Indian rupee we give you, you have to in exchange give us 2 of our rupees back. We are smarter then you.

[Anujan]

Sorry I am not an economist and this might come out stupid.

What exactly is "circular debt"

As I understand it, A owes B 50$, B owes C 50$ and C owes A 50$ and therefore it is a circular debt?

Why cant they all then get into a room and decide to cancel each other's debts?

[nachiket]

Sorry I am not an economist and this might come out stupid.

What exactly is "circular debt"

As I understand it, A owes B 50$, B owes C 50$ and C owes A 50$ and therefore it is a circular debt?

Why cant they all then get into a room and decide to cancel each other's debts?

In the case of Independent Power Producers (IPP) in pakiland, the government sells them the fuel to run their plants and in turn buys the power they produce. Power producers sell to mango abduls and recover money theoretically. But paki mango abduls do not pay bills and the power rates are too low anyway. Lot of power also gets stolen. Paki government is also bankrupt and cannot make up for the IPP's losses.They in turn cannot pay paki government for the fuel. So what can they do? They can say all debt is forgiven but then how do the power producers make money and continue producing power? Only option is to borrow from outside to pay off the previous debt. And the cycle continues, while external debt keeps increasing. Other option is to stop producing power and finally realize paki dream of becoming 7th century Arabia.

[Suraj]

Sorry I am not an economist and this might come out stupid.

What exactly is "circular debt"

As I understand it, A owes B 50$, B owes C 50$ and C owes A 50$ and therefore it is a circular debt?

Why cant they all then get into a room and decide to cancel each other's debts?

Circular debt in this context is the govt ultimately owing itself and other parties money because it cannot pay for upkeep of infrastructure. The thing about CPEC is that it seeks to build infrastructure. Upkeep of infrastructure costs money, that has to be collected from the users and used to pay down the capex that went into building it, and the opex involved in running it.

Most developing countries lack solid infrastructure because they don't even have the $$ to get the heavy machinery and material to build the infrastructure. It requires a large amount of $$ spent early on for building something, then pay it down over decades, while simultaneously also paying for running expenses. Lack of credit to fund such projects prevents or stalls most infra development in such places.

TSP got lots of infrastructure construction work 'gifted' as CPEC. China bankrolls the construction, sends their excess engineering equipment and skilled personnel over, build stuff, make arrangements to have it paid back over time (or extracts something valuable in return out of client). Now they have to pay it back, and pay to keep it running. If they don't keep it running they can't pay for the construction cost or maintenance and upkeep. If they don't pay for maintenance, it falls apart and they can't put it to use and collect fees/toll/jizya.

This leads to the example nachiket quoted above. Elsewhere with roads, they end up with ridiculous situations like pawning one road project (which they still owe money to the Koreans on) to pay for upkeep of another they owe money to the Chinese on. This is a circular debt trap. Kind of like those TV home makeover shows where the cool slick haired types come in and throw $250-500K of upgrades to supersize someone's home, and they soon go bankrupt because they can't afford upkeep.

Anytime you build a lot of stuff with money you don't have the means to pay down, and are on the hook to pay someone else, you're scrooed. CPEC is like a NINJA loan.

TSP simply doesn't have heavy industry to back their area and population. Never mind managing 10% of Indian output, they product 3-4MT of steel a year, while India produces 110MT. Coal output is about 100x higher in India. India adds more installed electrical capacity annually than all of TSPs capacity. India also adds more GDP annually than the entire TSP GDP (Indian incremental GDP growth each year exceeds incremental output of the whole Eurozone combined). Hardly any railway network, mostly truck-laden (== more inefficient) freight traffic, and more.

What's going to happen ? I dunno. My guess is TSP will sell portions of land wholesale to Cheen, perhaps more sections of POK.

[tandav]

Suggestion: India should offer Pakistan a soft loan in exchange of transfer all of disputed areas such POK, Gilgit, Baltistan, NWFP (any pockets of interest to India in Balochistan/Sindh may be added if amount is larger). This will resolve Kashmir issue and hopefully with the money Pakistan can invest in education and livelihoods and start on its journey to become a more dignified nation.