Hafeez admits economy in bad shape

[Blackwater]

ISLAMABAD: Finance Minister Dr Abdul Hafeez Shaikh on Wednesday admitted that the economy was in the doldrums — the foreign direct investment dropped to less than $2 billion from over $5 billion in four years, while the banks' bad loans increased by more than 100 per cent in five years.

Dr Shaikh in written answers to the National Assembly also admitted mismanagements in the affairs of the state-owned National Bank, while adding that the government was printing huge amount of currency notes to run its affairs.

The total foreign direct investment had continuously been declining since the incumbent government came in power, and the finance minister informed the National Assembly that the FDI and the portfolio investment in 2007-08 was $5.45 billion, dropped to $1.91 billion in 2010-11.

Responding to a question about the value of currency notes printed during the tenure of the government, the finance minister said currency notes worth Rs201 billion were printed in 2007-08 which jacked up by 100 at Rs439 billion in 2008-09.

However, under severe pressure from the IMF that the government has to reduce borrowings from the central bank and the printing of currency notes dropped to Rs154 billion, but with the requirement to run its affairs the government borrowing rose more than 100 per cent in 2010-11 when currency notes worth Rs373 billion were printed.

While, the critics said that high government borrowing was adding fuel to inflationary trends, Finance Minister Dr Hafeez Shaikh denies that printing of currency notes directly impacts inflation. However, he said that it results in increased circulation of currency.

"The prime reason for this increase in currency is heavy government borrowings from State Bank for budgetary support," Dr Shaikh said.

The minister also said that the government borrowing from State Bank had shown some respite during the last few months.

"This is expected to help in restraining the printing of new notes and slowing down growth in money supply," Dr Shaikh said.

While, the country is faced with bleak economic situation the finance minister acknowledged that 42 officers had been promoted out of turn in 2009 and 2010 in the National Bank of Pakistan, the largest bank of the country.

The promotions include 14 Assistant Vice Presidents to Vice Presidents, while 27 Officer Grade-I employees have been promoted to AVP.

Besides the National Assembly was informed that the volumes of bad loans were on the rise and loans written off by the banks and financial institutions in 2010 was Rs10.07 billion compared to Rs6.38 billion in 2009.

The finance minister informed that the aggregate figures of non-performing loans (NPL) of the banking sector by the end of 2010 reached Rs464.85 billion.

The finance minister blamed the economic downturn, rising borrowing cost and global economic recession as the main reasons for surging NPLs.

Dr Shaikh also said that the repayment capacity of the borrowers had been hit due to reduction in industrial production because of shortage of electricity, gas and poor law and order situation.

Hafeez admits economy in bad shape | Business | DAWN.COM

 

[Blackwater]

ise finance minister ki bhi phat gayi.

 

[pack leader]

this is incredible it looks like the germen disease : printing butt loads of cash will have nasty side affects
like hyperinflation coupled with corruption and a lack of energy
this seems to be an economic perfect storm
only the Saudi royal family can save them now
yipe another one bites the dust

 

[mayfair]

Time for the loaded gun to own head to come out. In other words nuclear and terror blackmail.

 

[Godless-Kafir]

This is bad news, Pakistan cant go bankrupt. If its business go then the young will turn to more violence like in Sudan. A man who has something will think twice before going to fight but if it goes like the Communist manifesto says, Proletariat unite for you have nothing to lose, then that bad!

i support balkinisation of pakistan but not economic crumble, who wants pirates and terrorists nagging us! this is the time india must invest couple of billion.

 

[nitesh]

we have already invested crores of rupees there, they never given the money back we have given them at the time of partition.

 

[Godless-Kafir]

we have already invested crores of rupees there, they never given the money back we have given them at the time of partition.

No, I mean we must try to make them reliant on our economy then Mulla or Bulla wont need to fight us because they have MONEY to lose. Business is the only way to make them stop hateing us.

 

[Dovah]

Time for the loaded gun to own head to come out. In other words nuclear and terror blackmail.

You are absolutely right, sir.
Now, the government won't own up to its pathetic governance and screwed up policies and would try to pin it all on foreign forces, and then the blackmail would start, perhaps they'd enter the proliferation business again.

 

[Dovah]

Business is the only way to make them stop hateing us.

They allow Indian industries limited access there on the grounds that it may harm domestic Industry's growth. And to be honest, hating is in their DNA, no business exchanges are gonna stop them from hating.

 

[Singh]

Pakistan is too small too fail, spare change from the Arab/Chicom purse will be able to salvage them. However, it will languish for the forseeable future.

PS: All the money pumped in by the Arab and other Islamists sympathisers has had a huge multiplier effect in destroying the Pak economy. A few million $ paid to the right kind of bigots has caused losses of billions of $ of losses to Pakistan. It would've bankrupted India to produce this kind of damage in Pakistan.

 

[mayfair]

They allow Indian industries limited access there on the grounds that it may harm domestic Industry's growth. And to be honest, hating is in their DNA, no business exchanges are gonna stop them from hating.

Perhaps not. But also does not stop them from importing and smuggling Indian stuff from Dubai/Singapore or even across the border. This grey market benefits those haters the most, who make money from all the channels by which this stuff makes it to Pakistan. The elite and the armymen who control this black market are only too happy with the status quo as it helps them kill two birds with the same stone- stonewall free trade with India in the name of Kashmir, Jihad, eating grass and make a tidy profit on every bottle of Dabur Vatika or Bagpiper that finds it way in to that watseland. They will be loath to share the goose that lays golden eggs.

 

[nitesh]

No, I mean we must try to make them reliant on our economy then Mulla or Bulla wont need to fight us because they have MONEY to lose. Business is the only way to make them stop hateing us.

Yes, i am with you in this, becuase if we buy agro products from them, anyway no benefit is going to reach to the poor, the major money will be made by the feudals there, who being inherently corrupt, will keep it with themselves, which in turn increase inflation there. Double whammy

 

[debasree]

every body knows that pakistan is totally bancrupt,and its finance minister knows it now,it seems he wake up from hybernation.

 

[hit&run]

Pakistan is too small too fail, spare change from the Arab/Chicom purse will be able to salvage them. However, it will languish for the forseeable future.

PS: All the money pumped in by the Arab and other Islamists sympathisers has had a huge multiplier effect in destroying the Pak economy. A few million $ paid to the right kind of bigots has caused losses of billions of $ of losses to Pakistan. It would've bankrupted India to produce this kind of damage in Pakistan.

.
In an Ideal survival mode they can sustain themselves on Agriculture but that will again be determined by the one who has the tap knobs.
.
Arm race with India is serving us well and squeezing them out too.
.
Rest is bonus

 

[Blackwater]

Pakistan is too small too fail, spare change from the Arab/Chicom purse will be able to salvage them. However, it will languish for the forseeable future.

PS: All the money pumped in by the Arab and other Islamists sympathisers has had a huge multiplier effect in destroying the Pak economy. A few million $ paid to the right kind of bigots has caused losses of billions of $ of losses to Pakistan. It would've bankrupted India to produce this kind of damage in Pakistan.

Singh ji , Islamic brother hood vi vad gaya. Even there Islamic brothers don't give much now.They are also fed up with there begging limits

 

[Singh]

.In an Ideal survival mode they can sustain themselves on Agriculture but that will again be determined by the one who has the tap knobs.
.
Arm race with India is serving us well and squeezing them out too.
.
Rest is bonus

Our ability to turn the taps off is over exaggerated imho, however, I have not looked too deeply into this. We should work diligently towards getting greater control of the waters.

Pakistani economy is not contracting but the growth is not able to keep pace with neither the population nor inflation. Rich is getting richer, poor is getting effed. Good for Schadenfreude.

every body knows that pakistan is totally bancrupt,and its finance minister knows it now,it seems he wake up from hybernation.

Pak FM was handpicked by the establishment to somehow salvage the economy, he is obviously not doing a good job because the Army is allowing him to cut their budgets and the politicians aren't allowing him to raise taxes. And finally he will become the scapegoat.

Yes, i am with you in this, becuase if we buy agro products from them, anyway no benefit is going to reach to the poor, the major money will be made by the feudals there, who being inherently corrupt, will keep it with themselves, which in turn increase inflation there. Double whammy

And who will not pay the taxes, nor electricity bills.

But for every feudal in South Punjab, Sindh, Balochistan there are a dozen small landowning "zamindars" in Punjab.

Perhaps not. But also does not stop them from importing and smuggling Indian stuff from Dubai/Singapore or even across the border. This grey market benefits those haters the most, who make money from all the channels by which this stuff makes it to Pakistan. The elite and the armymen who control this black market are only too happy with the status quo as it helps them kill two birds with the same stone- stonewall free trade with India in the name of Kashmir, Jihad, eating grass and make a tidy profit on every bottle of Dabur Vatika or Bagpiper that finds it way in to that watseland. They will be loath to share the goose that lays golden eggs.

The black market is not completely owned by the Army or the elite, in fact small traders and govt officials are mostly involved in this. Pakistan doesn't have a white market truth be told.

Its cheaper to smuggle goods from other countries. Nobody has heard of Dabur Vatika and Bagpiper in Pakistan imho.

Singh ji , Islamic brother hood vi vad gaya. Even there Islamic brothers don't give much now.They are also fed up with there begging limits

Saudi gives billions of dollars of subsidised/free oil plus money to the clandestine defence, jihad, investment and charity programmes. Its not enough to sustain the country but enough to line up the pockets of the establishment and buy their loyalty. Saudis will never allow Pakistanis to depend on them to salvage their economy, they are too smart for that.

But when schit hits the fan, which has already happened, you obviously will have IMF or WB stepping in. Basically Pakistan is being arm-twisted by the Americans, and IMF currently.

 

[Iamanidiot]

Paaji Pakistan has to pay its IMF loans installments from 2012

 

[agentperry]

i want to know from pak fm- how much of the money they claim as foreign investment is armerican and chinese aid???
they count the aid money from the USA as FDI and FII and publish that forex reserve has swelled... see pak newspapers

 

[Payeng]

What a shame for the cause of Jihadistan.

 

[Singh]

Paaji Pakistan has to pay its IMF loans installments from 2012

For which it will take another loan. Even the IMF loan is meant to pay previous loans.