Pakistani Economic Stress Watch

[Atmavik]

Can Qatari sell Mirtag2k to Pakistan without approval from France ?

Sell is not the right word here .. it would be more like bakshish and pakis won’t even be able to afford fuel costs

[hgupta]

Why can't Qatar sell the M2ks to India? If Qatar gives them for free to Pakistan, then it is giving the middle finger to India and India needs to retaliate harshly.

[Amber G.]

Hearing... Pakistan’s talks with IMF have failed...

[Aditya_V]

Qatar cannot re export without French permission highly unlikely and 2 fighter aircraft are not potatoes, spare parts , ground crew training, simulators weaponry maintenance procedures are all required . For a fleet of 12 aircraft with M 2000 out of production, PAF cannot do that.

[vimal]

It’s truly mind boggling that this nation was and is purchasing hundreds of millions of dollars worth of arms while totally bankrupt. Fauj above everything else.

[bharathp]

It’s truly mind boggling that this nation was and is purchasing hundreds of millions of dollars worth of arms while totally bankrupt. Fauj above everything else.

not too mind boggling if you consider all the kickbacks and bribes involved.
the mangos get their jingoism fulfilled with the toys (even if they are not actually useful in after a few days due to reduced spare parts etc)
the jernails get the $$ diverted to papa johns
the politicians get to be re-elected as they got the "bestest deal to fight the evil neighbour and with low resources have maintained parity with such a large neighbor"
and thousands upon thousands of dhoti shivering seeing how come they have a smooth procurement process while we go through so much pain - thats the mind boggling thing to me - how come we dint understand that they were cutting the goose as they couldnt wait for it to lay eggs.

[Manish_P]

Hearing... Pakistan’s talks with IMF have failed...

Pakistan, IMF fail to reach staff level agreement on stalled bailout package

“Actions and prior actions have been agreed, but the staff level agreement will be signed subsequently,” said Secretary Finance Hamed Yaqoob Sheikh while confirming that the IMF mission is leaving early Friday morning.

Finance Minister Ishaq Dar cancelled his media briefing due to the collapse of the talks.

The IMF discussed the draft of the Memorandum for Economic and Financial Policies just before the end of the scheduled review talks, leaving no room for the staff level agreement on the same day.

To break the deadlock, an unscheduled virtual meeting was held between Prime Minister Shehbaz Sharif and IMF Mission Chief Nathan Porter.

For clinching the MEFP and the Staff level agreement, the government eventually conceded to almost every demand by the IMF.

The Fund has rejected the “gradual approach” proposal of Pakistan, saying everything has to be done upfront.

So bakistan needs to overcome the trust deficit first to have any chance of getting out of the financial deficit. Mere words of pious bakis are no longer enough...

[Dilbu]

*Grabs popcorn*
Despite all efforts, Pakistan fails to woo IMF for staff-level pact

ISLAMABAD: Pakistan and the International Monetary Fund (IMF) failed to reach a staff-level agreement after 10 days of "tough" parleys aimed at unlocking critical funds needed for cash-strapped nation.

The development comes as negotiations, which took place from January 31 to February 9, with the global lender — which was visiting Pakistan at the government's request — and the local authorities concluded in Islamabad.

Finance Minister Ishaq Dar was due to hold a press conference for the much-awaited resumption of the programme, however, no official announcement was made by the financial czar.

[Dilbu]

Pumps run out of petrol in Punjab

LAHORE: Amid claims of adequate availability and the government warning of stern action against hoarders, the shortage of petrol persists across Punjab disrupting the routine life of the public at large.

The situation is worst in remote areas where the pumps have had no supplies for the last over a month, Dawn has learnt.

On the other hand, the Pakistan Petroleum Dealer Association (PPDA) has held all Oil Marketing Companies (OMCs) responsible for not ensuring adequate supplies as per demand thus making the pumps dry and leaving the motorists with no option but to search for petrol in cities.

[nachiket]

IMF statement:


Link: https://twitter.com/81ShahbazRana/statu ... PfbmV0n7lQ

[partha]

After staff level agreement IMF board still has to meet and approve and board meetings have their own schedule. AFAIK they don't do emergency meetings to approve loans. There is now a real possibility of Pakistan defaulting.

[Manish_P]

So IMF aunty is basically saying that she will make sure that Baki gormint increases the taxes and prices, reduces subsidies etc and she will check the books to make sure the revenue is coming in before she gives further aid.

[Aditya_V]

So IMF aunty is basically saying that she will make sure that Baki gormint increases the taxes and prices, reduces subsidies etc and she will check the books to make sure the revenue is coming in before she gives further aid.

Pakis can never meet IMF condition, its only when they meet some criteria the West requires they will fufill it, I still feel the best way for West to come out of the Ukraine situation is like Afganistan declare Russia against Malsi, require cannon Fodder and send them in large numbers with Narcotics as Human cannon fodder in blind charges, Russian Ammo will get wasted, Ukranians and Western lives saved and for Paki Generals a few million less mouths to feed.

[Manish_P]

...
On the other hand, the Pakistan Petroleum Dealer Association (PPDA) has held all Oil Marketing Companies (OMCs) responsible for not ensuring adequate supplies as per demand thus making the pumps dry and leaving the motorists with no option but to search for petrol in cities.

So basically the village Abdul has to take his donkey cart to the city, fill up a bottle of petrol and return back to his village to fill up his motorcycle/tractor/generator hain?

City abduls soon..

[Manish_P]

Pakis can never meet IMF condition, its only when they meet some criteria the West requires they will fufill it, I still feel the best way for West to come out of the Ukraine situation is like Afganistan declare Russia against Malsi, require cannon Fodder and send them in large numbers with Narcotics as Human cannon fodder in blind charges, Russian Ammo will get wasted, Ukranians and Western lives saved and for Paki Generals a few million less mouths to feed.

Oh i agree, sir. Especially in such recessionary times. As Cassian Andor would say 'The empire finds humans cheaper than droids'

[vimal]

This is not a worry for Pakis, if they die they get 72 houris, if they live lots of donkeys to go around

[yensoy]

IMF statement:
[image removed]
[url]Link: https://twitter.com/81ShahbazRana/statu ... PfbmV0n7lQ[/url]

All along we believed that IMF wants Pak govt to reduce expenditure and increase taxes. Read the IMF statement again. To me it looks like IMF wants Pak govt to increase expenditure for social welfare schemes for the poorest of their people. Which only makes it doubly difficult for Pak to balance their budget without deep spending cuts, and we know where the only fat remains.

Another observation is that the IMF team spent 9 days in Pakistan. 9 days is a long time for a high powered official delegation. If they weren't able to arrive at a decision, it reflects rather poorly on Pakistan, their readiness with data and their willingness to play by the rules. I can't imagine IMF is happy with the situation now.

[Dilbu]

yensoy sir, the social welfare scheme seems to be some benazir bhutto scheme which TSP govt wants to go ahead. It is not a requirement from IMF's side.

[Dilbu]

‘Discrepancy’ of Rs320b accepted

ISLAMABAD: The federal statistical discrepancy – a term used to describe untraceable expenses or unknown revenues – shot up dangerously to nearly Rs320 billion during the first half of this fiscal year, admitted the Ministry of Finance on Wednesday.

The fiscal operations summary report for the July-December 2022 period showed that due to a huge discrepancy, the federal government’s total expenses did not match with its current expenditures – causing another inconsistency in numbers.

The report showed that there was no trace of Rs319.6 billion of the federal government’s spending or revenues, which the finance ministry has described as a “statistical discrepancy”, reflecting the poor working of the finance ministry’s budget wing.

As a result, the federal government’s total expenditure has been shown at Rs4.247 trillion – Rs147 billion less than the current expenses of Rs4.390 trillion, as shown by the finance ministry.

The huge discrepancies raise questions over the credibility of the figures released by the ministry, a dilemma that the International Monetary Fund (IMF) is also facing.

[mody]

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

[mody]

As per Indian express article given below and also today's TOI print addition, Pakistan and IMF have reached a staff level agreement. Though it will be sometime before the pakis see the money, as they will have to implement some of the things that have been agreed upon.

https://indianexpress.com/article/pakis ... g-8436137/

At the same time, as per the TOI online article, the agreement could not be reached and more time will be required. Some confusion as the actual outcome.

https://www.msn.com/en-in/news/world/pa ... 60567fd96e

From the above Indian Express article:

"Pakistan has agreed with the International Monetary Fund on the conditions to release about $1.1 billion in critical funding, Finance Minister Ishaq Dar said on Friday, adding that the payout was delayed due to “routine procedures”.

Dar was speaking to reporters hours after an IMF mission left Islamabad after 10 days of talks aimed at releasing the funds Pakistan desperately needs to keep its economy afloat.

Payment of the funds, part of a $6.5 billion bailout Pakistan signed in 2019, has been stalled since last December.

“The prime minister has said we’re committed,” Dar said. “We will implement whatever has been agreed upon between our teams.”

“We will try to make sure Pakistan completes its second IMF programme in its history,” he added.

The money is necessary to prevent Pakistan from defaulting on external payment obligations, and an IMF deal paves the way for other organisations and governments to provide funds, analysts say. The fiscal adjustments demanded by any deal, however, are likely to fuel record-high inflation, which hit 27.5% year-on-year in January.
The IMF talks were due to end on Thursday, but Dar said they would continue virtually on Monday, with the aim of reaching a staff-level agreement which then needs to be approved by the IMF’s head office in Washington before the funds are disbursed.

In a statement, Pakistan IMF Mission Chief Nathan Porter confirmed talks were continuing, adding that considerable progress had already been made."

[Dilbu]

TSP media is either quiet or trying to spin it as some kind of delay. If you read the fine print it is clear that the IMF team left without promising anything.
Stalled IMF bailout remains locked

ISLAMABAD: The International Monetary Fund (IMF) and Pakistani authorities have been unable to reach staff-level agreement after a week-long discussions on 9th Review.

Secretary Finance Hamid Yaqoob Shaikh told media persons yesterday that an agreement on actions and prior actions was reached during the technical and policy-level talks with the IMF and staff-level agreement would be reached after the approval from the IMF headquarters in Washington.

The official also acknowledged that there are some differences between the two sides and the solution does not fall within the mandate of the Fund’s mission and the staff team has to explain to their seniors with regard to internal processing of these differences.

Latest reports are clearer.
IMF talks end without staff level agreement

ISLAMABAD: Pakistan and the International Monetary Fund (IMF) on Thursday failed to reach a staff level agreement within the stipulated time to revive the stalled $6.5 billion bailout package.

However, both the sides agreed on a set of measures that can still help clinch the deal to avoid a looming default.

The Pakistani authorities had hoped that they would convince the IMF about its good intentions regarding implementation of all outstanding conditions in a gradual manner.

But the hopes dashed during the 10-day visit by the IMF mission, which ended on Thursday without a staff level agreement.

The government remained short of providing adequate and convincing assurances to the IMF mission, led by Nathan Porter. Finance Minister Ishaq Dar held back-to-back meetings but remained short of the end-goal to get a staff level deal done.

“Actions and prior actions have been agreed but the staff level agreement will be announced subsequently,” said Finance Secretary Hamed Yaqoob Sheikh, while confirming that the IMF mission would leave early Friday morning.

[mody]

It seems the agreement could not be signed. Now chota badmash and Dar will continue with virtual begging from Monday. Nine days of GUBO from IMF was just too much to take. Now the sessions will move online

[Dilbu]

The US Dollar rate was Rs. 270.51 against Pakistani Rupee (PKR) at the closing of the interbank market on Thursday (9 February 2023) and the new closing rate for USD to PKR for 10 February 2023 will be updated at the end of the business day.

The closing rate on Thursday was still in anticipation of concluding a deal with IMF. What will happen today after the news gets out remains to be seen.

[mody]

https://www.msn.com/en-in/news/world/te ... 08264758bc

Ten likely impacts of the pakis failing to get the IMF bailout.

1). First impact will be on humanitarian aid. Recently its Prime Minister Mian Shahbaz Sharif went to Geneva and got a pledge of over $10Bn from multiple sources towards flood relief. Out of this amount, nearly $9Bn was conditional & was depending upon the success of IMF review and in the event of its failure this amount will never be realized. Similarly, the aid from other creditors like World Bank, Asian Development Bank & Islamic Bank will also not realize. Pakistan may get a very miniscule amount in the name of donation but that will not suffice its need.

2). Second impact will be on the bilateral creditors. Pakistan has been able to fool Islamic world to extract out money in the name of Islam but since now even IMF believes that Pakistan is in no position to repay its loans, no country will service any loan even at higher interests. They will now be hesitant to even roll over the existing debt. Not only this, to secure the repayment of their existing loans, they may confiscate Pakistani properties in their countries like Embassies, Consulates etc. This will be a very disappointing situation for Pakistan. Remember, Iron Brother China has already pulled out its support.

3). Third impact will be on commercial creditors. Over 50% of the entire loan on Pakistan is from various commercial organizations or banks. It will affect Pakistan in three ways. One is that these banks will now completely stop disbursing any more loans to Pakistan, second is they will now be more eager to extract out the existing money since they are fully aware that Pakistan is losing its repayment capability and third is that their outlook will also define Pakistan's credit ratings across the globe.

4). Fourth impact will be on remittances and circulation of Dollar in Pakistan. Overseas Pakistani's send a large sum to Pakistan in the form of Dollars. With government's strict control over the greenback & the possible event of default of Pakistani Banks, these people will now be hesitant to send this money back home and will hoard it in overseas entities or bullion which will affect the inflow of dollar in Pakistan. Similarly, since Pakistan government has almost stopped the outflow of dollar and the payment for even most essential goods is put on hold, Pakistan's export sector will get affected. They are the ones who get some forex to their country but if they themselves are not able to pay for their raw material being sourced from abroad, their production will stop and so as the inflow of dollars in the country too.

5). Fifth impact will be on currency crisis. As Pakistani rupee is already free falling against Dollar and it may go below PKR 300 for a dollar soon. In Khyber Pakhtunkhwa (KP), Afghan currency "Afghani" is fast gaining prominence since it is much stronger than Pakistani Rupee & connects to Pashtun pride. There are high chances that the Pashtun population in KP may start using Afghan currency in place of Pakistani rupee which is already losing its shine. To save its reputation, Pakistan will publish more currency which will further downgrade its value. We have examples of Zimbabwe and Venezuela in front of us. Pakistan is not far from following them.

6). Sixth impact will be related to rising interest rates & people's faith in Pakistani Banking system. The reference interest rate of Pakistan which is Karachi Inter Bank Offered Rate (KIBOR) is already skyrocketing. Domestic nationalized as well as private banks have also increased their interest rates and some of them have put restrictions on money withdrawal too. This is gradually creating a kind of public distrust in Pakistani Banking system. In such events, people will send their money out of the country and Pakistan will continue to be poorer and poorer.

7). Seventh Impact will be on people's trust in Pakistan Army. The Pakistan Army which has ruled the country for over 5 decades directly and rest of the time indirectly is in the cross hairs of common man now. People are realizing that it's the Army Generals who are enjoying all the privileges while poor Pakistanis are suffering. Probably this is the reason why Pakistan Army has categorically announced that this time, they will not participate in the elections. Rawalpindi boys are afraid and that's why their Chief is making trips around the globe for relief.

. Eighth Impact will be on availability of essential goods. Pakistan exports most of the things of its daily use. This includes Petroleum, Gas, Medicines, processed food, vehicles, Machinery and even food items. In the event of non-payment of dues, the availability of these goods will be hampered which will affect the lives of common people of Pakistan.

9). Ninth impact will be on Inflation. Pakistan is already facing extreme high levels of inflation. In the event of less inflow of forex, this inflation will rise and is likely to cross 50% in coming few months. This will not only make the lives of common public miserable but will shake the foundations of this very country. Entire Pakistan has been used to enjoy over easy money from west for decades.

10). Tenth impact will be public uproar over corruption and rising prices. People of less favored provinces like Khyber Pakhtunkhwa & Baluchistan have already started protesting the government and such protests will not only increase but may turn into a civil war too. There are large extremist groups like Jamaat e Islamic & Tehreek E Labbaik in Pakistan who have openly declared their anger and are likely to announce nationwide protests. They may provide a kind of organizational umbrella to the protesting people and turn the things ugly.

[drnayar]

I am curious to understand how Pakistan maintains its large army, a big nuclear arsenal and ballistic missile regiments, a navy that in turn fields half a dozen subs and an air force operating hundreds of fighter jets when its reserves might be actually touching negative at this point?!
Would it be naive to think that whatever IMF funds and loans they are receiving goes to fund these? And the main point being why would any sane lender lend to a country to build up its weaponry with no guarantee of return?! Isnt Pakistan worse off than Sri Lanka as a credit risk ?

[Aditya_V]

I am curious to understand how Pakistan maintains its large army, a big nuclear arsenal and ballistic missile regiments, a navy that in turn fields half a dozen subs and an air force operating hundreds of fighter jets when its reserves might be actually touching negative at this point?!
Would it be naive to think that whatever IMF funds and loans they are receiving goes to fund these? And the main point being why would any sane lender lend to a country to build up its weaponry with no guarantee of return?! Isnt Pakistan worse off than Sri Lanka as a credit risk ?

If you had read history- Pakistan exists for its Army, the whole pride is about Raiding and tormenting the Hindu. As long as the Nation exists its pride will be its armed forces, they will definitely try something soon to justify their military position soon and extract some form of Jaziya

[Neela]

mody-ji
Point #7 is the most anticipated. When all chips are down, Army comes in and saves. That aura I hope is shattered this time.
When the Army capitulates, then Balochis, Sindh, KP and GB would start thinking of striking it out on their own as they will see no repurcussions.
Being a bit dramatic here but it would be nice to see events escalated to a level where they discard their khakis to blend in with a mob attacking them.

[madhu]

If IMF do not give money and pak collapse ... Will there be a refugee crisis in india? Will all the islamist flow into india? Has modi gamed it? How to handle these pakis...

Just thinking aloud wondering about librandus... Did they anticipate this? Was that the reason they were fighting for CAA to be made secular?

[Aditya_V]

If IMF do not give money and pak collapse ... Will there be a refugee crisis in india? Will all the islamist flow into india? Has modi gamed it? How to handle these pakis...

Just thinking aloud wondering about librandus... Did they anticipate this? Was that the reason they were fighting for CAA to be made secular?

I guess if UPA was in power they will, but their own propaganda will force them to think otherwise, what will happen is large nos of Pakis will make to Iran and turkey and everyone is going to keep passing the buck till Scandinavia, UK< Germany , Belgium etc suddenly are swamped with Pakis.

[Manish_P]

..
I guess if UPA was in power they will, but their own propaganda will force them to think otherwise, what will happen is large nos of Pakis will make to Iran and turkey and everyone is going to keep passing the buck till Scandinavia, UK< Germany , Belgium etc suddenly are swamped with Pakis.

Pressure will be on India - Punjab mostly, Rajasthan to a lesser extent

Doubt it will be Iran - Sunni,Shia thing for one. Iran will be very very tough on Baki immigrants refugees. Pakis will be the new rohingyas. Not welcome anywhere in ummah territories

Geography is an important aspect - especially with petrol, diesel shortages. Longer trips away from population centers are very difficult

[sanjaykumar]

Just as India settled Sikhs from west Panjab, Muslims can also be settled in Indian panjab.

There should be less animosity, Islam and Sikhi being similar. Guru Granth containing references to allah and incorporating some borrowings from Islamic thought.


It is India’s duty. Of course with the advisory that the refugees are not to set foot out of panjab lest they be summarily deported.

[Dilbu]

Pakistan will have to enter another IMF programme immediately after this one: Miftah

Former finance minister Miftah Ismail has said that Pakistan would have to enter another International Monetary Fund (IMF) programme after the current one ends in June due to declining foreign exchange reserves.

“When this [programme] ends in June, we will probably not have much more than $10 billion in reserves, if that. That would be about a month and a half of import cover,” he said while speaking to DawnNews. Consequently, the country would have to approach the World Bank and the Asian Development Bank for loans, which would require it to enter another IMF programme.

“Because of the debt repayment we have to do now — about $20bn for the foreseeable future — I am pretty sure we will have to have back-to-back IMF programmes.”

[vimal]

Total loan liability for Pakistan in 2023 is in the range of $80 billion. They literally need a miracle at this point to survive. I’m sure if Gandhi was alive he would’ve advocated for loan waiver for Pakistan.

[madhu]

I guess if UPA was in power they will, but their own propaganda will force them to think otherwise, what will happen is large nos of Pakis will make to Iran and turkey and everyone is going to keep passing the buck till Scandinavia, UK< Germany , Belgium etc suddenly are swamped with Pakis.

Large population is closer to india. So it makes sence to cross to india. Moreover sunni going to shia Iran is doubtful. Love to go to Turkey but they themself in trouble.
To go to europe need money... So only rich will go.. But mass of poor has to take risk of land mine and pour over india. I am worried about that in case of complete collapse.

[Dilbu]

The horde will come by boats. Not by crossing mine fields. I am not sure we are ready for such a scenario.

[chetak]

The horde will come by boats. Not by crossing mine fields. I am not sure we are ready for such a scenario.

they will simply swamp us via every route and the paki army will facilitate it via gujarat, nepal, bengal via beediland and TN and KER via SL and outlying islands.

The smarter ones will go to the andamans via myanmar

all these are normal drug, human trafficking, and arms running routes

[Dilbu]

This is why I hope one of the four fathers will bail TSP out. They should be kept boiling in the pot and should not be allowed to spill over. A low intensity civil war is better than total collapse of the country.

[chetak]

This is why I hope one of the four fathers will bail TSP out. They should be kept boiling in the pot and should not be allowed to spill over. A low intensity civil war is better than total collapse of the country.

this is why CAA was blocked

There will be a very loud outcry from US/UK/EU/scandinavian/china countrie(s) to force India to accept refugees.

UN will pass sanctimonious resolutions

All this may well happen just before the general elections in 2024

[Manish_P]

The horde will come by boats. Not by crossing mine fields. I am not sure we are ready for such a scenario.

they will simply swamp us via every route and the paki army will facilitate it via gujarat, nepal, bengal via beediland and TN and KER via SL and outlying islands.

The smarter ones will go to the andamans via myanmar

all these are normal drug, human trafficking, and arms running routes

Nyet, Chetak ji

How can the hordes go to beediland, nepal & sri lanka in the first place. It's not like the national carrier or the PAF will cart them to these locations at great cost to self.

Sea route also highly unlikely. Diesel shortage. Plus the pakis don't have enough boats

It will be land-crossings onlee. Risking the border mines, the rann and all