Bharat Rakshak

Neela wrote:

Dilbu wrote:Pakistan awaits nod from Gulf states to unlock IMF loan

We are going around in circles. Gelf countries are recommending IMF plan. IMF asks Pakis to get the gap funded by Gelf countries.

Saudi Arabia's decision to refuse to provide any further bailouts or interest-free loans to Pakistan has left the government in Islamabad in shock and has prompted the finance minister to complain that even friendly countries aren’t keen on helping Pakistan out of its economic emergency.

Pakistan is in dire need of sustained US dollar inflows to avoid defaulting on nearly $80bn of international loan repayments over the next three and a half years. The country is currently sitting on just $3bn in foreign exchange reserves.

'Saudi Arabia is on a different course now. They've reset their relationship with other countries...'

Pakistan is also locked in difficult negotiations with the International Monetary Fund (IMF) over its 13th bailout package since the 1980s.

If an agreement isn’t struck soon, Pakistan will find it increasingly difficult to secure international loans, as its credit rating has been downgraded to junk.

Analysts privy to recent developments have told Middle East Eye that Saudi Arabia has conditioned fresh interest-bearing loans and investment on Pakistan implementing strict monetary and fiscal reforms along with a drastic reduction in its current account deficit - conditions similar to those set by the IMF.

Umar Karim, associate fellow at the King Faisal Center for Research and Islamic Studies, said Pakistani authorities are in a state of shock.

“While previously Saudi Arabia and other Gulf countries would bail Pakistan out off the back of a phone call from the foreign minister or the prime minister, this time around they are really being put through the mill,” Karim told MEE.

It is believed that on a recent trip, even the Pakistani military chief couldn't convince Saudi Crown Prince Mohammed bin Salman to release emergency funding for the country.

Karim believes this sets a new precedent. “The Pakistani military chiefs have previously been a source of assurance to friendly countries, but the Saudis have now had enough of Pakistan's civilian authorities squandering away these handouts,” he said.

New world order

At the World Economic Forum in Davos in January, the Saudi finance minister made the kingdom's new policy very clear.

Mohammed al-Jadaan said: “We used to give direct grants and deposits without strings attached and we are changing that. We are working with multilateral institutions to actually say we need to see reforms.”

“We are taxing our people, we are expecting also others to do the same, to do their efforts. We want to help but we want you also to do your part.”

'There is also a major trust deficit between the Pakistani government and the IMF'

Kamal Alam, senior fellow at the Atlantic Council, said that Pakistani authorities should have read the pattern.

“Saudi Arabia is on a different course now. They've reset their relationship with other countries and refused to give financial handouts to namely: Jordan, Morocco and even Egypt. However, Pakistan, which is far more dysfunctional than all of the others, should have seen it coming,” Alam told MEE.

“Pakistan's been lulled by a false sense of security”, the analyst said, “that with a population of over 220 million and a comprehensive nuclear weapons programme, it’s too big for the world to let it fail. This has bred complacency across successive governments and the country's military leadership of easy loans or bailouts.”

Khaqan Najeeb, former adviser to Pakistan’s finance ministry, said the Saudis want Pakistan to sign a deal with the IMF and only then will they see any loans or investment.

“The Pakistani government's delay in implementing essential monetary and fiscal policies, as demanded by the IMF, has hurt the economic situation,” Najeeb said.

“There is also a major trust deficit between the government and the IMF and that's why the Fund is making sure Pakistan implements these policies before it receives any further funding or the important stamp of approval."

Meanwhile, the rate of inflation in Pakistan is set to hit 33 percent in the coming months and the country's currency has devalued nearly 65 percent in the last 12 months.

Nearly six months ago, in a bid to stem the outflow of foreign exchange, the Pakistani government stopped almost all imports, leading to a raw materials shortage across manufacturing sectors and a temporary shutdown of several automobile manufacturing plants and textile factories.

Najeeb argues that with high inflation, slow growth and high interest rates around the world, there is less money available for emerging markets like Pakistan, and that without the IMF's “stamp of approval” even friendly Gulf kingdoms will remain shy of investing in the country.

“Friendly countries too want to see reforms in Pakistan, however this time they are going for an investment model as opposed to previously when they would simply deposit a few billion dollars in Pakistan's state bank. This might turn out to be better for the country,” Najeeb told MEE.

What to reform and what follows that?

Kamal Alam told MEE that it was “very obvious” that “the delay in implementing IMF reforms is because the political elite wants to avoid them - deep-set corruption in government is at the heart of it.”

Alam said that a culture of “zero accountability has completely wrecked trust in Pakistani leadership, at home and abroad”.

Pakistan is ranked 140 on Transparency International's Corruption Perceptions Index for 2022, not a favourable ranking, Alam said, if the country wants to attract foreign investment.

Najeeb, who worked in government, said that just attracting foreign investment will not solve Pakistan's problems in the long-term and that the country needs to expand its tax base and improve tax collection.

“Pakistan's agriculture sector contributes 23 percent of total GDP, while tax collection across the sector is very poor,” he said. “Similarly Pakistan's retail and real estate sectors also contribute heavily to the GDP but almost completely avoid taxation.”

The Saudis are also unhappy with the way Islamabad is behaving these days, said Umar Karim.

“The current prime minister has a 77-member ministerial cabinet, the largest in the world; they all receive full perks and privileges. Why would the Saudis help you if you continue to afford yourself such luxuries while they are putting themselves through a cost-cutting drive?” he told MEE.

Karim believes the Saudis are interested in investing in Pakistan's energy sector - both fossil fuels and renewables – and that they are also interested in investing in the country's booming IT sector. But this investment, he said, would only happen after Pakistan implemented economic reforms.

While Pakistan is besotten with a crippling power crisis, Saudi investment in the renewable energy sector could be crucial. A 2020 report from the World Bank suggests Pakistan has immense potential for generating power through solar energy.

“Utilising just 0.071 percent of the country's area for solar power generation would meet Pakistan's current electricity demand,” the report said.

In 2019, however, the Saudi government expressed interest in setting up an oil refinery and in making other investments totalling $10bn in Pakistan. But, Najeeb said, Pakistan would need to “revamp its board of investment” and bring in “specialist human resources and incentives” in order to take advantage of this opening.

The former finance ministry adviser said that a reset in relations with Saudi Arabia would be good for Pakistan and could prove to be a wake-up call.

For Pakistan, the days of easy money are over.

Neela wrote:
https://www.dawn.com/news/1742969/is-de ... r-pakistan
Is default an option for Pakistan?

While the country’s nuclear arsenal is not under threat

“Is Sri Lanka better after default?” the taboo question was voiced aloud by former Federal Board of Revenue (FBR) chairman Shabbar Zaidi, who seemed to think so in an interview with Dawn, a thought recently echoed by former president Asif Ali Zardari.

vimal wrote:What ejjactly were the paquis thinking with their toes when they pissed off the Sauds?
Like sardar khush hoga, sabahshi dega?

NRao wrote:Saudi Arabia tells Pakistan: No more easy money

...
'Saudi Arabia is on a different course now. They've reset their relationship with other countries...'
..
The Saudis are also unhappy with the way Islamabad is behaving these days, said Umar Karim.
..

Neela wrote:..

The industry has also been hit by increased energy charges, which have made units uncompetitive and caused some to close down.

Textiles form 60% of Paki exports. They were running on subsidized power. Now the emperor is naked.

The International Monetary Fund (IMF) has rejected speculation that the lending institution had attached any conditions to Pakistan’s missile or nuclear program as part of the ninth review of the IMF-supported program, reports Geo News on Sunday.

Stating that there was “absolutely no truth” to any such insinuations, Esther Perez Luiz, the IMF resident representative, clarified that discussions with the Pakistani authorities have exclusively focused on economic policies to address the country’s economic and balance of payments issues.

vimal wrote:What ejjactly were the paquis thinking with their toes when they pissed off the Sauds?
Like sardar khush hoga, sabahshi dega?

The rupee remained under pressure on Monday, with analysts citing the uncertainty surrounding the revival of an International Monetary Fund (IMF) programme and a lack of confidence in the government.

The local currency closed at Rs 284.03 per dollar, according to data shared by the State Bank of Pakistan (SBP). This equates to a depreciation of Rs 2.32 or 0.82 per cent from Friday’s close of Rs 281.71.

..

Several countries had made commitments to support Pakistan during previous IMF reviews, he said, adding that the IMF was now asking for those commitments.

However, Tresmark’s Head of Strategy Komal Mansoor commented today, “There is fresh speculation that Saudi Arabia may not commit any aid or loan to us anymore. Other than China, none of the friendly countries have given reassurances of requisite funding. The message is that it could take one day, one month, or one year.

“The confidence has been so low that not even a dollar has been invested in bonds or treasury bills this month,” she added.
The analyst further said the country’s situation “does not look very promising and unfortunately, no one seems to have a plan B”.

Manish_P wrote:

Neela wrote:..


Textiles form 60% of Paki exports. They were running on subsidized power. Now the emperor is naked.

Yes. It is quite serious now.

The only pro they have now is the lakhs of unemployed who will be willing to work for literally peanuts rotis/naans.

Wonder if they will think of migrating to Bangladesh? Highly unlikely that the bangladeshis will take them in. Their sector is also larger under-regulated. That is one way they remain so cheap and competitive.

Anujan wrote:
Meanwhile, remember that Dar thundered that YYY conspiracy was being hatched the the Joos wanted Pakistan's missiles?

https://www.thenews.com.pk/print/105192 ... f-official

The International Monetary Fund (IMF) has rejected speculation that the lending institution had attached any conditions to Pakistan’s missile or nuclear program as part of the ninth review of the IMF-supported program, reports Geo News on Sunday.

Stating that there was “absolutely no truth” to any such insinuations, Esther Perez Luiz, the IMF resident representative, clarified that discussions with the Pakistani authorities have exclusively focused on economic policies to address the country’s economic and balance of payments issues.

Finance Minister Ishaq Dar said on Monday that his comments in the Senate on Pakistan’s nuclear programme were being “quoted out of context”, adding that the delay in the International Monetary Fund (IMF) programme was due to “technical reasons”.

Last week, Dar told the upper house of Parliament that there would be “no compromise” on the country’s nuclear and missile programme.

Manish_P wrote:Moving towards 300 again..

Fikar not Motorma, Moodys, S&P, Fitch ityaadi have a plan 'C' ready for bakistan

Anujan wrote:
That was some fast downhill skiing.
https://www.dawn.com/news/1743241/dar-s ... of-context

Dar says his Senate speech on Pakistan's nuclear
programme being quoted out of context'

Finance Minister Ishaq Dar said on Monday that his comments in the Senate on Pakistan’s nuclear programme were being “quoted out of context”, adding that the delay in the International Monetary Fund (IMF) programme was due to “technical reasons”.

Last week, Dar told the upper house of Parliament that there would be “no compromise” on the country’s nuclear and missile programme.

The PPP leader lamented that the Senate had “neither before nor today been taken into confidence on what are the conditionalities of the IMF”. Describing the delay as extraordinary, Senator Rabbani sought to know if the delay was being made because of some sort of pressure on the country’s nuclear programme or its strategic relationship with China or because an imperialist power wanted its presence in the region.

Anujan wrote:

vimal wrote:What ejjactly were the paquis thinking with their toes when they pissed off the Sauds?
Like sardar khush hoga, sabahshi dega?

Pakistan is blessed with intellectual capital. For example, it has the highest per-capita concentration of strategic analysts.
These strategic analysts have had a collective delusion that given the size of its army, Pakistani strategic analysts all expressed outrage and recommended that the running of the Kaaba should be handed over to Pakistan army!

@NepCorres
https://twitter.com/NepCorres/status/16 ... 5181889536
After severe scarcity of Wheat, #Pakistan now has a shortage of Tea. Pakistan Tea Association has requested #Islamabad that the import of Tea may be declared as a Essential importcommodity. Pakistan is too short of supplying the demand.

The government has decided that there will be no deal with IMF and it’s working on a narrative that the international lender has been turned away due to its tough conditions.
....

The government now seems to think that the country won’t default now since the Chinese aid has arrived, said Mosharraf Zaidi while speaking during Naya Daur TV programme Khabar Say Aagay.

A_Gupta wrote:

...
The government now seems to think that the country won’t default now since the Chinese aid has arrived, said Mosharraf Zaidi while speaking during Naya Daur TV programme Khabar Say Aagay.

State Minister for Petroleum Musadik Malik Monday said motorcyclists would get a relief of Rs100 per litre of petrol instead of Rs 50.

Addressing a press conference at the PMLN office in Model Town, he said the price of petrol had been reduced for motorcyclists and small cars and Prime Minister Shehbaz Sharif had given only six weeks to implement this decision.

The minister said he will make petrol cheaper for the poor and put the money of the rich in the pockets of the poor. He further said the owners of big vehicles will pay the higher price of petrol. Answering a question, he said out of 22 crore population, 21 crore were poor.

drnayar wrote:https://defensetalks.com/pakistan-air-f ... d-nations/

PAF video also shows short footage of the Akinci High Altitude Long Endurance (HALE) drone. Reportedly, Pakistan will start receiving 1st batch of Akinci UCAVs in 1st half of 2023. Akinci is a twin-engine combat drone being developed by the Turkish firm “Baykar”. The latest variant of the Akinci drone can carry payload of up to 2000 kilograms.

Pakistan Air Force (PAF) has received several batches of AN/TPS-77 Multi-Role Radars from Lockheed Martin

chetak wrote:...

while dar and the pakis are left sucking dic...err thumb onlee

Manish_P wrote:

chetak wrote:...

while dar and the pakis are left sucking dic...err thumb onlee

Chetak ji, the paki anal-cysts based in bartannia are working out the direct proportion maths on how much the IMF owes pakistan.. whether it is 30 billion or 300 billion

What does your math say?

The International Monetary Fund (IMF) could release funding to Pakistan by June under a bailout package, a Bloomberg report on Tuesday stated, but warned the country could be heading towards default if this does not happen.

“Our base case is that the IMF will deliver the remaining $2.6 billion in aid under the current bailout program by June – helping Pakistan wiggle through the immediate crisis – as the country has fulfilled most of the IMF’s conditions,” wrote Bloomberg economists Ankur Shukla and Abhishek Gupta.

“If the aid does not arrive, though, we think China will help plug the gap to head off a default,” they added.

The economists, however, warned that “Pakistan is careening toward a potential default as soon as June unless it secures aid from the IMF” and noted that the South Asian nation would require another IMF programme to avoid default in the next fiscal year.

“The country will probably need to seek another IMF bailout program or more external aid from allies to avoid default next fiscal year. If the assistance fails to materialize, we think China will step up again,” wrote the economists.

ISLAMABAD: The textile sector has reached the brink of default in the wake of its inability to service the loans it received under TERF (Temporary Economic Refinance Facility) and LTFF (long-term facing facilities) which may also lead to a possible banking crisis, discloses the letter of APTMA to the State Bank of Pakistan written on February 27, 2023. The State Bank of Pakistan (SBP) during the PTI era provided the TERF and LTFF facilities to help industrialists to install more textile units and expansion of units for more growth in exports of the country. However, because of the ongoing LCs crisis, stuck-up consignments of imported cotton at the ports owing to the dollars liquidity crunch and withdrawal of RCET by the government in line with IFM diktat, all the new and expansion units in the sector have become non-functional. This has led to immense pressure on export-reignited units which are unable to generate funds to pay even interest on the loans, leading to massive defaults, curtailment capacity and a possible banking crisis.

Dilbu wrote:Banking crisis on cards as textile sector near brink of default

ISLAMABAD: The textile sector has reached the brink of default in the wake of its inability to service the loans it received under TERF (Temporary Economic Refinance Facility) and LTFF (long-term facing facilities) which may also lead to a possible banking crisis, discloses the letter of APTMA to the State Bank of Pakistan written on February 27, 2023. The State Bank of Pakistan (SBP) during the PTI era provided the TERF and LTFF facilities to help industrialists to install more textile units and expansion of units for more growth in exports of the country. However, because of the ongoing LCs crisis, stuck-up consignments of imported cotton at the ports owing to the dollars liquidity crunch and withdrawal of RCET by the government in line with IFM diktat, all the new and expansion units in the sector have become non-functional. This has led to immense pressure on export-reignited units which are unable to generate funds to pay even interest on the loans, leading to massive defaults, curtailment capacity and a possible banking crisis.

Lisa wrote:I am sorry but I am naïve. What the issue with default?

Dilbu wrote:Chetak ji, there is definitely some tu-tu-main-main happening between unkil and fliend when it comes to who is responsible for cleaning munna's potty. The articles appearing in Bloomberg and FTs stating unnamed sources that China is expected to step in if IMF fails to provide baksheesh to TSP by June is no accident. How will the fliend fight back is the question.