Pakistani Economic Stress Watch

[Manish_P]

The simplest reason for not joining CPEC is that it goes through Indian territory under occupation of hostile power's.

Joining the CPEC gives legitimacy to that occupation.

+1

I think this is the primary issue

[Y I Patel]

Excellent article, Deans. It has aged amazingly well!

[Anujan]

https://tribune.com.pk/story/2400793/go ... n-deposits

The government was forced to drop the proposed flood levy on the imports and a one-time tax on bank deposits of the general public after the International Monetary Fund (IMF) and the main stakeholders opposed them.

Despite the State Bank not in favour of imposing taxes on cash withdrawals, the government is likely to move ahead with its plan to reintroduce the 0.6% tax. This step may once again increase currency circulation.

To help Pakistan all abduls with money in the bank should give it up

The finance ministry’s plan to impose a one-time levy on the bank deposits was an unusual move and it could have compelled people to keep their money outside the banking system.

What did the geniuses think would have happened if they took money deposited in banks from everyone

[chetak]

The simplest reason for not joining CPEC is that it goes through Indian territory under occupation of hostile power's.

Joining the CPEC gives legitimacy to that occupation.

why were the hans so insistent that India join the CPEC....


what did they really want or what did they have to gain from India


Most OBOR discussions or even the initial approach itself by the hans is rather low key and almost secretive

after the Indian brush off, why did the hans make such a dog's breakfast of it by making public appeals to India, including getting the pakis to try and convince India to relent and join

the CPEC in pukestan was/is going nowhere and this was obvious from the very beginning..

were we the real target and the pakis a mere smokescreen and a sideshow

[ernest]

These are great suggestions; something on lines of big powers who control the world think like, and India needs to w.r.t Terroristan. Good contrast with dhoti shivering even on collapse of the terrorist state. Hats off to you, sir. Any chance you've worked closely with three letter agencies?

Big powers arent afraid of genocide and territorial expansion.
Of course, our cultural war codes ingrained in us differentiate us from the rest on the former . Japan, USA, China, France have a genocidal background which helped them propel to where they are today.
Even territorial expansion - we are claiming what is our legally.

Of course, Neelaji. India has been a power which has been fair in its dealings and not resorted to anything even close to genocide. It will be in the interest of other nations to collaborate more with India seeing that we have been extremely fair in our dealings, even concessionary. We just have to be fair and not back down to appear nice when we are right. With pakistan, our hand has been burnt many times, and we need to respond with tit for tat (which Rob Axelrod demonstrated to be extremely efficient), and maximize our gain from their misfortune. Any concessions now will only come back to bite us later.

[ernest]

I help a retired general with his articles, which find their way to the relevant agencies. Some of those ideas have been implemented - e.g. the Bilaspur-Mandi-Leh rail project (scrapped earlier, but revived in 2016, for national security considerations), or AIR Pashto and Baluchi services. I don't have the professional background to work directly, but since I don't need the credit, I prefer to do it through those that do.

Great that your recommendations are reaching the right places. What can we as individuals do to bring such thought into mainstream discourse? Outside of BR, the tone is still too soft on pakis or unrealistic.

[Pratyush]

why were the hans so insistent that India join the CPEC....

what did they really want or what did they have to gain from India

Most OBOR discussions or even the initial approach itself by the hans is rather low key and almost secretive

after the Indian brush off, why did the hans make such a dog's breakfast of it by making public appeals to India, including getting the pakis to try and convince India to relent and join

the CPEC in pukestan was/is going nowhere and this was obvious from the very beginning..

were we the real target and the pakis a mere smokescreen and a sideshow

1) Indian agreement over OBOR & CPEC would make India a subordinate power to PRC in Asia. With an additional advantage of effectively negating any Indian claim on both POK & COK.

2) See above.

3) not quite. They made a diplomatic approach to India. India rebuffed them. As did the US. That made the project financially unviable.

4) Indian agreement had multiple angles, both geopolitical and economic.

5) CEPC could have worked, if the TSP was acting less as a Kabila with every lord taking his choice cut from the meat and more as a modern nation state. The infrastructure would have acted as door opener for industrial development. But TSP being TSP made a hash of the project.

6) hard to say if India was the target and TSP being the smoke screen. Because the project could have worked. Even without India. Had the Pakistanis being more competent economically.

What I am trying to say is, that the geopolitical reality with Indian refusal and TSP's compulsive thieving made it impossible for the project being financially viable.

[chetak]

why were the hans so insistent that India join the CPEC....

what did they really want or what did they have to gain from India

Most OBOR discussions or even the initial approach itself by the hans is rather low key and almost secretive

after the Indian brush off, why did the hans make such a dog's breakfast of it by making public appeals to India, including getting the pakis to try and convince India to relent and join

the CPEC in pukestan was/is going nowhere and this was obvious from the very beginning..

were we the real target and the pakis a mere smokescreen and a sideshow

1) Indian agreement over OBOR & CPEC would make India a subordinate power to PRC in Asia. With an additional advantage of effectively negating any Indian claim on both POK & COK.

2) See above.

3) not quite. They made a diplomatic approach to India. India rebuffed them. As did the US. That made the project financially unviable.

4) Indian agreement had multiple angles, both geopolitical and economic.

5) CEPC could have worked, if the TSP was acting less as a Kabila with every lord taking his choice cut from the meat and more as a modern nation state. The infrastructure would have acted as door opener for industrial development. But TSP being TSP made a hash of the project.

6) hard to say if India was the target and TSP being the smoke screen. Because the project could have worked. Even without India. Had the Pakistanis being more competent economically.

What I am trying to say is, that the geopolitical reality with Indian refusal and TSP's compulsive thieving made it impossible for the project being financially viable.

Pratyush ji,

Thanks for collating the many reasons but all this is well known.

However, one has just not been able to shake off the (long standing) niggling feeling that there is something else that we are missing in this geopolitical puzzle, some pieces that just don't seem to fit right...

And what the cheeni were not able to get from us covertly, using a geo economics diversion as a ploy to lull hegemonic suspicions (CPEC) and like minded constructs, are they now overtly attempting to do something similar, via aggressive territorial salami slicing on a larger scale, a la doklam and galwan.

why the sudden and urgent change of tactics and also what has triggered this change of strategy as well, what has changed recently (in the past decade or a decade and a half) that has now compelled the cheenis to force the issue..

was it a rogue splinter group of the PLA that was eager to precipitate a crisis at the behest of a building and burgeoning opposition to xi in the CPC

OTOH, xi declaring himself as president for life means that a purge of considerable dimensions may have been forced by xi to do some "ideological spring cleaning" to consolidate his hold ....

[Deans]

The simplest reason for not joining CPEC is that it goes through Indian territory under occupation of hostile power's.

Joining the CPEC gives legitimacy to that occupation.

That is the official reason. While it is correct, there is a more relevant reason.
All the major recipients of Chinese investments / loans, are countries which are either dictatorships, or weak democracies with little independent
oversight of finances, or no system of checks and balances. India, for all its inadequacies, has these in place.

In the case of Pak, all China has to do to get its projects passed (projects that any CA will say are loaded heavily in favor of the lender) is bribe a few generals. In the case of SL (or Maldives), bribe a family and ensure the Central bank or Fin Min does not have the expertise to object, or there is no independent judiciary to stop such a project. The ruler approving the project earns goodwill for bringing in foreign investment, when western countries have not done so (because they did not give ruler a large enough cut).
If India has offers from local companies to build a power plant a X Cr per MW (for which they can easily raise money), why will Govt approve a project a 2X the cost from China ?

In India, Fin Min (or the ministry handling the project) will straightaway object to the terms. Even if it is pushed through (which is difficult as laws have to be changed), Oppn will raise the matter, CAG will say it sucks, bureaucrats will leak to the media, who will talk about it, SC will intervene etc. Worse still, the Govt may change and the new one may scrap the project. China likes continuity e.g - Army running the country (Pak), or a dictator for life, or 1 ruling family, in the country they target for a BRI project.

[Deans]

There are legitimate Chinese investments in India which are not part of BRI, where China is welcome if they win a bid in a competitive tender and
meet all conditions (e.g. Indian labor, penalty clause and no sovereign guarantee). Metro tenders is one such area - barring Delhi, none in India are profitable, so if China will willing to take risks in investing they are welcome. Similarly investments in unprofitable startups.
That said, for a project like a Rapid bus corridor, the cost in India is $ 2-3 million per km (Ahmedabad) compared to between $ 12-20 mil per km in Pakistan, with Chinese help.

My suggestion, if India had to be part of BRI, was to invite China to bid to build roads and infrastructure in Arunachal or Ladakh !

[Manish_P]

...

My suggestion, if India had to be part of BRI, was to invite China to bid to build roads and infrastructure in Arunachal or Ladakh !

[ritesh]

What is the local media in pakistan saying about the IMF situation? Has the paki rupee fallen further....triple century in sight?

I implore upon bakistanis to not let anything come in their way to defeat evil indoos record of 319 (sehwag) with thei pious Uber currency exchange value. AoA...

[Dilbu]

Work stops on 80% construction projects

KARACHI: The Association of Builders and Developers (ABAD) boycotted buying steel for the last two days due to the climbing steel prices since the beginning of this year, which has halted 80 per cent of construction projects in the city, creating a risk of unemployment.

ABAD Senior Vice Chairman Nadeem Jeeva told The Express Tribune that there was 100 per cent compliance from ABAD members on the decision to stop steel purchases.

He said the steel mills are increasing the prices and are forming a cartel. Jeeva said the relevant regulatory bodies and the competition commission were not performing their mandated duties to stop cartelization for price manipulation.

Subsequently, ABAD decided to buy steel at high prices.

Jeeva explained the reason for the steel boycott, adding that builders and developers had booked apartments, houses and other construction projects at Rs5,000 per square foot.

However, from January 1 to date, the per square feet price of construction has increased to Rs6,000.

[Dilbu]

The ones who can are escaping the sinking ship. What about those 90% who are uneducated and unskilled?
TO LEAVE OR NOT TO LEAVE PAKISTAN

The latest numbers show that in just 2022, more than 800,000 people left Pakistan. And that is not merely because they wanted better education and working opportunities; state’s inability to provide necessities and security is also a major factor. Some people relocate to another country to join their family members, pursue higher education, or/and find good financial opportunities. Others relocate to flee hostilities, persecution, terrorism, or human rights abuses. Some also relocate in reaction to the unfavourable consequences of environmental variables like natural catastrophes or climate change.

There could be one reason or several factors, but the recent numbers are alarming for Pakistan. The situation manifests the hopelessness of the youth stuck in the country’s unresponsive system, and how they are finding ways to move out.

The story of every other Pakistani in the age bracket of 22-35 years is the same. They are all trying to find ways to move to another country, and while their reasons may differ their intention is identical. “I can stay in Pakistan as my parents are here, but even after studying at a reputed university and working in a big company, if I have nothing to show for it, why should I stay and keep my family suffering? My wife also works so we were not in a bad situation after I was asked to resign, but what if she wasn’t working? How would I have managed the expenses of my children who are both under three years of age,” said Usman.

His elder brother is working in the UAE, but he plans to go to Germany.

The reasons for this increase in immigration from Pakistan are many, and not just the current economic situation of the country. Abbas said, “If it was merely the issue of low paying, jobs, one could have adjusted to it. But the main concern of a middle-class salaried person is security and the law and order situation. In Karachi, we can’t even sit at a roadside hotel for tea without feeling afraid, then what is it we are paying taxes for?” Abbas and the rest of his family members are taxpayers.

Many countries have increased their intake of immigrants recently after fallng short of skilled workers, and for Pakistani professionals, this is the best time to migrate. “Countries like Australia, Germany, Canada, and others are luring markets such as those of Pakistan and other underdeveloped countries where people have skills but are not satisfied with their existing lifestyles and systems. People who apply for such visas get easy options to leave Pakistan,” said Amanullah.

Lately, with change and ease in the points table of several countries, many young people are eagerly applying for visas, and in the next few years, our own country might be short of educated, skilled youth to contribute to society, Amanullah added.

[Dilbu]

How is this possible other than by burning USD to maintain rates artificially? Gurus please explain.
Intra-day update: Rupee maintains upward momentum against US dollar

The Pakistani rupee registered marginal gains against the US dollar, appreciating 0.12% in the inter-bank market during the opening hours of trading on Monday.

At around 11am, the rupee was being quoted at 268.95 during intra-day trading, an increase of Re0.33.

During the previous week, the currency had appreciated 2.71% against the US dollar to close at Rs269.28 in the inter-bank market.

[drnayar]

The ones who can are escaping the sinking ship. What about those 90% who are uneducated and unskilled?
TO LEAVE OR NOT TO LEAVE PAKISTAN

The latest numbers show that in just 2022, more than 800,000 people left Pakistan. And that is not merely because they wanted better education and working opportunities; state’s inability to provide necessities and security is also a major factor. Some people relocate to another country to join their family members, pursue higher education, or/and find good financial opportunities. Others relocate to flee hostilities, persecution, terrorism, or human rights abuses. Some also relocate in reaction to the unfavourable consequences of environmental variables like natural catastrophes or climate change.

I presume all the HNIs would have left Pakistan assuming there are some apart from the fauji generals. , who in turn would have parked all of their monies in swiss and cayman accounts !! the aam admis are left with their donkeys eating straw..but anyway they have the bum , they shouldn't complain.

The main concern is when the $hit hits the fan for real this time, Fauji's would have only one option., get adventurous at the border, keeping in mind they have their own reserves of fuel etc. Hope this gives the IA a good opportunity to slice and dice

[drnayar]

How is this possible other than by burning USD to maintain rates artificially? Gurus please explain.
Intra-day update: Rupee maintains upward momentum against US dollar

The Pakistani rupee registered marginal gains against the US dollar, appreciating 0.12% in the inter-bank market during the opening hours of trading on Monday.

At around 11am, the rupee was being quoted at 268.95 during intra-day trading, an increase of Re0.33.

During the previous week, the currency had appreciated 2.71% against the US dollar to close at Rs269.28 in the inter-bank market.

paki printing press out of paper ?

[Dilbu]

Milk price reaches Rs210 a litre, chicken meat costs Rs700kg in Karachi

KARACHI: In uncertain economic conditions, consumers continue to receive severe price shocks following an unchecked hike in the prices of daily use items, including loose milk, which has been increased to Rs210 from Rs190 per litre by some shopkeepers and live broiler chicken which has seen an increase of Rs30-40 per kg in the last two days, taking the cost to Rs480-500 per kilogram.

Earlier this month, the live bird was available at Rs390-440 per kg while it was being sold between Rs380-420kg in the last week of January, 2023.

The chicken meat is now being sold at Rs700-780 a kg which was Rs620-650 per kg a few days ago. Boneless meat price hit a new peak of Rs1,000-1,100 per kg, showing a jump of Rs150-200 per kg in the same period.

Boneless poultry meat rate has crossed the price of boneless veal which is currently being sold at Rs900-1,000 per kg, while meat with bones is selling at Rs800-850 per kg.

[sudhan]

How is this possible other than by burning USD to maintain rates artificially? Gurus please explain.
Intra-day update: Rupee maintains upward momentum against US dollar

The Pakistani rupee registered marginal gains against the US dollar, appreciating 0.12% in the inter-bank market during the opening hours of trading on Monday.

At around 11am, the rupee was being quoted at 268.95 during intra-day trading, an increase of Re0.33.

During the previous week, the currency had appreciated 2.71% against the US dollar to close at Rs269.28 in the inter-bank market.

I believe the abduls believe a bailout is just around the corner and are trying to buy PKR while its still cheap.. It will only be temporary.. will crash again..

[Manish_P]

Many countries have increased their intake of immigrants recently after fallng short of skilled workers, and for Pakistani professionals, this is the best time to migrate. “Countries like Australia, Germany, Canada, and others are luring markets such as those of Pakistan and other underdeveloped countries where people have skills but are not satisfied with their existing lifestyles and systems. People who apply for such visas get easy options to leave Pakistan,” said Amanullah.

Awesome. Can't wait for the sanctimonious Goras to experience increasing amounts of pakistaniyat in their own homelands. May they have lots of experiences to share with the britshits.

[mody]

Deans....great article on CPEC.

With regards to your other suggestions, some years ago, I had suggested something similar. However, with regards to MNCs, asking them to stop the operation altogether in India, would not be possible.
An alternative would be to pass an anti-terror finding law. As part of the same, we would have to identify countries of concern and then ask all companies that are operating in the countries of concern and in India also, would have to certify that their operations in the country of concern does not fund terror in any way. This would include certifying that none of their employees at also donating to so-called charities, which fund terror activities in India.
This would be almost impossible for most companies to do. Till the compliance to this law is received, the companies in question, would not be allowed to further expand their operation in India in any way or make any new investments. The existing operations would be allowed to continue.

For companies like Yum foods or Marriot or Pepisco, not being able to expand their operations in India, would be really damaging. In some cases, the prospective business opportunity, by investing in expanding their operations, would itself be greater then the total volume of business in Pakistan.

This would hit Pakistan, where it would hurt the most. Most these companies are legitimate businesses, which pay taxes. The reduction in the tax revenues would hit the paki state. Most the jobs in such companies are the educated middle/rich class and the loss of such white collar jobs would be a big blow.

Some of these companies have now already started curtailing or in some cases completely closing down their businesses in Pakistan. For MNCs like Hyundai or Suzuki the size and their operation in India are just too big and too valuable. They would readily close down the operations and only retain some after sales service support and spares, through a franchisee model. However, this would surely hit the availability of spares and service for cars in Pakistan.

In a few years, mostly only made in China products would be available locally in Pakistan, as only Chinese companies would be able to operate there. Even in case of Chinese companies like mobile phone manufacturer's would also not setup assembling plants in Pakistan, as most now have plants in India. Only the likes of Huawei might be able to have assembling plants.

Apart from the paki state hurting the RAPE class is also equally important.

[mody]

What would help flame the anti-fauj sentiment in Pakistan would be, if someone could publish a list of businesses and assets owned by faujis, both serving and retired and their families in foreign countries.
The seven-eleven and pizza franchises owned by the elites and the assets acquired in foreign locales would be an eye opener for the aam abduls, struggling to put food on the table.

[Dilbu]

Govt redoubles efforts to convince IMF: Power subsidy over for farmers, exporters

The cabinet approved a revised circular debt management plan through circulation in this regard, local media reported.

According to the plan, which will be presented to the IMF, the government will jack up power prices by Rs7.91 per unit in four quarterly adjustments – Feb-March 2023, March-May 2023, June-Aug and September-November.

Under the plan, the government will charge Rs3.21 per unit from now onwards, Rs0.69 from March-May and increase it again by Rs1.64 per unit from June onwards to August of 2023. From Sep-Nov, the govt will hike the power tariff by Rs1.98 per unit.

The consumer base tariff will be increased from Rs15.28 per unit in June 2022 to Rs23.39 per unit till June 2023.

The government also approved to end electricity subsidy of Rs65 billion given to exporters, with effect from March 2023.

The government will be able to get Rs51 billion from the withdrawal of subsidy on electricity for exporters while Rs14 billion will be collected by ending the subsidy on electricity under the Kissan Package from March 2023. For the export sector, the Rs12.13 per unit subsidy on electricity will be taken back.

About Rs250 billion will also be recovered from electricity consumers by June 2023. Under the plan, a surcharge of Rs3.39 per unit will be levied, sources said.

Rs73 billion will be obtained from the increase in quarterly adjustments till June. In the quarterly adjustment, electricity will become more expensive by up to Rs4.46 this month, sources said.

[Deans]

How is this possible other than by burning USD to maintain rates artificially? Gurus please explain.
[url=https://www.brecorder.com/news/40225942]Intra-day update: Rupee maintains upward momentum against US dollar[/url

There is no supply of $, so no transactions at any rate. Hence the last rate continues to be the current rate.
Pak can preserve H&D by saying their Rupee is now stable.

Two more bits of good news:

Remittances from Pak non residents declined 10% Jan 23 vs Jan 22. The Pak govt was kinda hoping it would increase in response to appeals.

In the first half of 22-23, Pak Tax /GDP ratio declined from 4.8% of GDP (1st half 21-22) to 4.4%
India was 11.7% in 21-22

Pak assumption in IMF talks was that the tax ratio would increase.

[Deans]

Deans....great article on CPEC.

With regards to your other suggestions, some years ago, I had suggested something similar. However, with regards to MNCs, asking them to stop the operation altogether in India, would not be possible.
An alternative would be to pass an anti-terror finding law. As part of the same, we would have to identify countries of concern and then ask all companies that are operating in the countries of concern and in India also, would have to certify that their operations in the country of concern does not fund terror in any way. This would include certifying that none of their employees at also donating to so-called charities, which fund terror activities in India.
For companies like Yum foods or Marriot or Pepisco, not being able to expand their operations in India, would be really damaging. In some cases, the prospective business opportunity, by investing in expanding their operations, would itself be greater then the total volume of business in Pakistan.

Yes, this is what I want to lobby for. Until Govt is satisfied that these companies have no link with Pak fauj, they will pay a security tax in India
(can be surcharge on GST or extra corporate tax). By no link I mean, their product is not available in any place where a serving or retired member
of the Pak army, or their family can buy it. The largest customer of many of these companies in Pak is the Canteen services dept of the armed forces.
At the least, Indian CSD can boycott the products, or customers can be told these companies are major suppliers to the Pak army.

[Dilbu]

Remittances plunge to more than two-year low

Remittances sent home by overseas Pakistani workers plunged to more than a two-year-low as the cap imposed on the US dollar forced transfers via illegal channels — hundi, hawala, and others.

Data released by the State Bank of Pakistan (SBP) showed that the remittances fell to $1.9 billion in January 2023, compared to $2.1 billion in December and $2.18 billion in January 2022. In May 2020 remittance stood at $1.865 billion.

Remittances dropped 9.9% month-on-month and 13.1% year-on-year, the central bank data showed. With a cumulative inflow of $16 billion during the first seven months — July to January — of FY23, the remittances decreased by 11% compared to the same period last year.

The dollar cap was removed by the end of January as per International Monetary Fund (IMF) conditions to pave the way for the release of the critical $1.1 billion loan tranche.

[Dilbu]

With loans piling, why is Pakistan waiting to reform its policies?

ISLAMABAD: With loans of over $70bn due within the next three years, Islamabad needs to take some tough decisions – especially if donors pull the plug on debt restructuring and more bailout packages for the nuclear state. Amid the popular narrative of Pakistan being “too big to default like Sri Lanka,” the fact remains that evading a default on payments is unfortunately not possible unless we solve the twin deficit challenge posed by surging crude oil prices.

Islamabad Capital Territory (ICT) administration needs to impose fines on automakers and increase token fees for car owners, whose cars fail to meet average fuel economy requirements of at least 15km/ltr – not to mention a carbon tax for not meeting CO2 standards. These taxes can also be linked to the actual annual usage or mileage of a car. Similarly, higher taxes on hi-octane fuel need to be imposed and cars with over 1500CC engine capacity should be allowed to purchase only the premium higher-octane fuel instead of the regular one. Taxes on hi-octane can also provide funds for limited subsidies on regular fuel. In a business case, where 50% of the fuel import is used by the transport sector, these policy options are now inevitable.

What ICT administration and Capital Development Authority (CDA) should not do is to invest in new highways – these only provide short-term relief to motorists and all benefits vanish due to ‘induced demand’ in the long-run – thanks to the infamous Downs-Thomson paradox. Moreover, all city bypasses and circular roads should be protected so as to prevent new settlements from being established near them – something that happened to the old Islamabad Highway bypass (now Expressway).

Likewise, when it comes to fuel imports in respect of power generation, a massive policy shift is required. Despite commitments to the Sustainable Development Goals, the only way we can have cheap electricity in the future is by shifting our baseload to local coal-based power plants. During the daytime, solar can help too. Besides the PV based solar panels, we need solar concentrator power plants in places near Karachi that not only generate cheap power, but can also give us clean water as a by-product.

This complete shift to coal, nuclear and solar will help the government eliminate international oil shocks to the power sector and will bring stability in our tariffs as well. {But which abbu will pay for the capex required to make this shift, hainji?}Capacity payments to independent power plants (IPPs) need to be indirectly phased out via the imposition of super tax on those plants running on crude oil.

[Deans]

What would help flame the anti-fauj sentiment in Pakistan would be, if someone could publish a list of businesses and assets owned by faujis, both serving and retired and their families in foreign countries.
The seven-eleven and pizza franchises owned by the elites and the assets acquired in foreign locales would be an eye opener for the aam abduls, struggling to put food on the table.

The only people inside Pak who access the internet in English, are the RAPE class.
The total readership of the English press in the whole of Pak is less than the English newspaper in a major Indian city.

The Urdu press - for the next 10% who can read full sentences, does not look beyond approved GHQ writers.

[Manish_P]

Maybe they should have arrested the IMF team under blasphemy charges... that way they could have got at least few millions for their release

[Dilbu]

Ban on imports to render millions jobless, warn business leaders

Business leaders are clamouring for the cash-strapped government to allow manufacturing materials stuck at the key port of Karachi into the country, warning that a failure to lift a ban on imports will leave millions jobless.

Faced with critically low US-dollar reserves, the government has banned all but essential food and medicine imports until a lifeline bailout is agreed with the International Monetary Fund (IMF).

Industries such as steel, textiles and pharmaceuticals are barely functioning, forcing thousands of factories to close and deepening unemployment.

The steel industry has warned of severe supply-chain issues caused by a shortage of scrap metal, which is melted down and turned into steel bars. In the past few weeks, the bars have reached record prices.

"We directly feed materials to the construction industry which is linked to some 45 downstream industries," said Wajid Bukhari, head of Large Scale Steel Producers Association.

"This whole cycle is going to be jammed."

Smaller factories have already shut after exhausting stocks, while some larger plants are just days from closing, he said.

[Dilbu]

Planning circular debt management is challenging even if you have accurate data. Achieving it using sialkoti statistics as base of assumptions will require advanced level of djinn tekniks.
Challenging circular debt monster

Despite swift and heavy price doze to the consumers, the CDMP remains highly vulnerable to a series of variables to the extent that the IMF and the World Bank pushed for reducing the additional government subsidy from Rs675bn on January 28th to Rs336bn on February 9th, 2023.

For example, only a one per cent change in the exchange rate has a fiscal impact of Rs5bn in the power invoice, and the exchange rate assumed for CDMP is Rs232 per US dollar against the prevailing rate of well above Rs268 per US dollar.

Similarly, changes in demand, consumer mix, generation mix, Karachi inter-bank offer rate, local inflation, imported coal price, LNG and crude oil prices have major implications on power purchase cost” and hence would need a continuous process for accurate monitoring.

No wonder it is officially estimated that circular debt closed at Rs2.253tr at the end of June 2022. It will end up increasing to Rs2.374tr, up Rs121bn, despite planned tariff adjustments of about Rs315bn, an additional subsidy of Rs335bn and stock clearance of Rs180bn.

The moving goalposts can also be gauged from the fact that payables to the independent power producers (IPPs) also increased from Rs1.248tr on January 28th to Rs1.510tr on February 8th — in a matter of just 10 days at the rate of about Rs26bn per day.

Besides tariff increases for other sectors, subsidy packages for Zero-Rated Industry (ZRI) and Kissan Package have been approved to be discontinued with effect from March 1st, 2023. The ZRI subsidy will thus be cut by Rs51bn against an unbudgeted estimate of Rs120bn.

Another Rs75bn recovery will be ensured through four quarterly tariff adjustments of Rs3.21 per unit for the current and next month, followed by 69 paise per unit in April-May, Rs1.64 per unit in June-August period and then Rs1.98 per unit in September-November.

This is on top of the Rs7.91 per unit increase already notified and implemented in August. The future quarterly tariff adjustments will be passed on automatically to consumers when due without any delay.

The power division contends that circular debt flow was Rs538bn which was reduced to Rs130bn in FY21. In FY22, the flow was negative Rs27bn. The reasons for the flow of circular debt mainly include under-recoveries of ex-Wapda distribution companies (Discos), line losses above regulatory targets, unpaid and unbudgeted subsidies, pending generation costs, non-payment by K-Electric and markups.

[Dilbu]

FUEL SHORTAGE ‘AFFECTS’ AIR AMBULANCE SERVICE

KARACHI: Fuel shortage has badly affected air ambulance service, said the owner of a private charter company, ARY News reported on Tuesday.

The head of a private charter company, Imran Aslam Khan, said that General Aviation is facing severe difficulties due to fuel shortages, and added that air ambulance service is also badly affected.

Mr. Khan further said that the flight operations of flying schools have also been stopped due to a shortage of fuel, the flying of Edhi Air Ambulance aircraft is also affected.

[chetak]

The simplest reason for not joining CPEC is that it goes through Indian territory under occupation of hostile power's.

Joining the CPEC gives legitimacy to that occupation.

That is the official reason. While it is correct, there is a more relevant reason.
All the major recipients of Chinese investments / loans, are countries which are either dictatorships, or weak democracies with little independent
oversight of finances, or no system of checks and balances. India, for all its inadequacies, has these in place.

In the case of Pak, all China has to do to get its projects passed (projects that any CA will say are loaded heavily in favor of the lender) is bribe a few generals. In the case of SL (or Maldives), bribe a family and ensure the Central bank or Fin Min does not have the expertise to object, or there is no independent judiciary to stop such a project. The ruler approving the project earns goodwill for bringing in foreign investment, when western countries have not done so (because they did not give ruler a large enough cut).
If India has offers from local companies to build a power plant a X Cr per MW (for which they can easily raise money), why will Govt approve a project a 2X the cost from China ?

In India, Fin Min (or the ministry handling the project) will straightaway object to the terms. Even if it is pushed through (which is difficult as laws have to be changed), Oppn will raise the matter, CAG will say it sucks, bureaucrats will leak to the media, who will talk about it, SC will intervene etc. Worse still, the Govt may change and the new one may scrap the project. China likes continuity e.g - Army running the country (Pak), or a dictator for life, or 1 ruling family, in the country they target for a BRI project.

Janab,

All these factors were already known to the cheenis and yet they pushed hard to get India to join the CPEC and even got the pakis to pitch in, with the pakis magnanimously (and uncharacteristically) offering to remove the name Pak from the cPec and replace it with India.

With the exception of very few presstitutes and media outfits, even the wokes were not in any position to seriously support the cheenis or to even press for the cheeni case

And that is what is so confusing and also leads to the obvious conclusion that the cheenis had a trump card to deal with these issues

with the Modi govt already well entrenched, what could/would the cheeni had done to overcome the systemic obstacles that were obviously already in play

The cheenis were always alarmed and even now they get very uptight whenever they get bad press in India when the Indian press disses them. That is a little strange for for an evil bunch who are knowingly out to steal Indian territory ( never mind the "our perception, their perception" nonsense that is peddled by the woke surrender monkeys, whether in or out of uniform)

The cheeni seem to be waiting for a congi/commie/messy coalition govt in place before they make a renewed bid once again

[sudhan]

IMHO, anyone with double digit IQ could see that the CPEC contract terms heavily favour China and Chini firms.. and is a strict no no for any self respecting nation..

1. Interest rates are exorbitant
2. Little to no trickle down effect.. almost all the high value contracts are executed by Chinese firms.. everything from Raw materials to manpower and machinery come from China. No benefit to the local economy. Prime example: Pakis.. $60b invested, little to no benefit to the local economy.
3. The contract also includes terms to give unfettered market access to Cheen products and suppliers..
4. Brutal clauses in case of default.

The Corrupt nations fell for this BS, cause no one else will accept such one sided agreements. The suckers who signed, got loans from Chini banks, used the loans to hire Chinese infra firms, (who had no obligation to invest/ procure locally) and got saddled with incredulous amount of debt and then when they defaulted, they had to hand off strategic assets for a nice round time period of 99 years.

As soon as one signs on the dotted line.. the signee is screwed.. Thankfully BJP was in power when the buggers came dangling this carrot.. Given the congi history with CPC, i shudder to think what would have happened if UPA had been in power.

[Deans]

KARACHI: Fuel shortage has badly affected air ambulance service, said the owner of a private charter company, ARY News reported on Tuesday.

The head of a private charter company, Imran Aslam Khan, said that General Aviation is facing severe difficulties due to fuel shortages, and added that air ambulance service is also badly affected.
Mr. Khan further said that the flight operations of flying schools have also been stopped due to a shortage of fuel, the flying of Edhi Air Ambulance aircraft is also affected.

If the current situation continues, all airlines have to shut operations as all of them (incl International flights) have to refuel in Pak and the airports have no money to buy fuel.
Pak railways has already stopped (I believe it happened twice before in the last 6 months) due to lack of fuel.
Petrol pumps have started shutting, so the rest of public transport will be next.
Army will probably start selling fuel in the black market.

[Aditya_V]

Pakis must use up thier cattle for food, export gas, wood, Coal etc which not wasting it by generating electricity for the Paki masses. Thier vehicles should be exported as scrap steel and they can use older transport systems, which do not consume any petroleum products.

[chetak]

Pakis must use up thier cattle for food, export gas, wood, Coal etc which not wasting it by generating electricity for the Paki masses. Thier vehicles should be exported as scrap steel and they can use older transport systems, which do not consume any petroleum products.

[RajaRudra]

Iam regular to the Dawn, one of the news websites in the land of bure. For the past 10 days or so their comments column is put out of service. Reason given is thw comments section is going through some updates. But 10+ days for any update is too much.

Possible reasons could be..
1) order from the gernals to clamp down cricusm.
2) News paper had retrenched all the moderators.

I am a regular at Dawn too - to know how the enemy thinks. I have noticed the same thing.
Nothing criticizing the Khakis, either from columnists or readers. I guess they are cleaning up the comments section, or they will introduce columns recalling the golden age of Zia/ Mushy/ Bajwa etc. Imran is fair game for criticism - a sign perhaps that he is finished.

Yeah, Aman ka tamasha times. Used to mess around the comments section in all colors. A year before, they asked for Phone number and Place to comment verification. I gave their office phone number- taken from the same website.

[Aditya_V]

Chetakji perfect

[Dilbu]

Infrastructure development projects are being shelved and funds are being diverted for day to day activities.
RDA returns Rs1.145 billion to Punjab govt as mega projects shelved

RAWALPINDI: Funds to the tune of Rs1.145 billion released for three mega projects – Kutchery Chowk Remodeling Project, Leh Expressway, and Ring Road – in the garrison city have been returned to the provincial exchequer after the development authority failed to start the projects.

A senior official of the Rawalpindi Development Authority (RDA) told Dawn that the provincial government released Rs1 billion for Kutchery Chowk last year, Rs50 million for the land acquisition for Leh Expressway and flood channel project, Rs50 million for a feasibility study concerning Leh Expressway and a flood channel, and Rs42 million for the Ring Road.

The RDA failed to start the projects and the funds were still in the accounts of the civic body, but the caretaker government asked the development authority to return the money sanctioned for these projects.

He said that the provincial government has imposed a ban on new development projects across the province and clarified that such a ban would not impact the ongoing projects.