Pakistan Economy: News & Discussion

[Indx TechStyle]

@Neo

https://tribune.com.pk/story/1330442/pakistans-current-account-widens-staggering-90/

Pakistan’s current account deficit widens by a staggering 90%

@Neo

Forex reserves fall to $21.824bln, lowest in 9 months

https://www.thenews.com.pk/print/186758-Forex-reserves-fall-to-21824bln-lowest-in-9-months

Current account balance decline loss to economy is usually patched up by FDI inflows. But both are falling?

Is that growth or debt?

 

[vinuzap]

debt basically

after partition pakistan inherited most fertile and irrigated land of indian subcontinent(punjab) that helped in cotton and jute industry not due to any talent but inheritance but here this chutiya qaum never implemented any land reforms to sustain what it got as alm

punjabis again concentrated on looting and ignored others

imagine massive american aid flow after soviet invasion(another alm) and in 1988 they have to approach IMF for survival

this fooling around with CPEC to is nothing new

a decade back in 2007 musharraf was trying to sell pakistan as third or fourth fastest growing economy to pakistanis fooling them around for long

truth is for last 3-4 years its because of china they are able to survive economically

 

[bose]

CPEC is overrated by insecure and delusional DFI'ans. For us, its just a great opportunity to attract investment in energy and infrastructure and use it as a catalyst for domestic and regional growth. It will add up to 1-2% additional growth tops in the next decade.

Indians are nor insecure but we will ensure that both Pakistan & China pay a heavy price that will make it economically not viable...

I read somewhere that Pakistani cricket team is not doing well these days with scandals and corruptions... some said that once CPEC is completed the Pakistani cricket team will get back to past glory...

But here's what most Indians believe India look like by 2030.

So much obsessed with Indians ?

Think of your country first ... leave Indians to think they want about their country ...

 

[Kshatriya87]

CPEC is overrated by insecure and delusional DFI'ans. For us, its just a great opportunity to attract investment in energy and infrastructure and use it as a catalyst for domestic and regional growth. It will add up to 1-2% additional growth tops in the next decade.

But here's what most Indians believe India look like by 2030.

CPEC is overrated by paki media, not dfi fans. DFI members are just countering the fake chest thumping of pakis on CPEC.

 

[vinuzap]

india has stake there because it passes through dispute region though economically its inconsequential to india as india is implementing 7-8 times the size of corridor (not one)in india alone

CPEC is not a FDI but a loan where a country has put his economic sovereignty on hold, question to be asked if CPEC fails how pakistanis will repay loans and if suceeded liability and risk pakistani will shares and major profit china, what will happen to pakistan's indigenious industry (using outdated coal when one is moving to solar)did they ever try something like make in india or make in china, these questions are tough to answer

sorry neither indians are fools , shortsighted or lack vision or are busy measuring dick and destroying themselves as evident from history time and again



as for 2030 there are others who are busy building it :

someone like abdul kalam wrote wings of fire and silently and discreetly many indians are building upon it

 

[LordOfTheUnderworlds]

Bombing Pashtun tribal civilians in zarb e azb was big long exercise. They must have used significant ammunition, fuel, spare parts. Did someone sponsor it or they managed it in military budget? Did anyone try to calculate estimate for cost of ammunition and fuel?

 

[IndianHawk]

Bombing Pashtun tribal civilians in zarb e azb was big long exercise. They must have used significant ammunition, fuel, spare parts. Did someone sponsor it or they managed it in military budget? Did anyone try to calculate estimate for cost of ammunition and fuel?

If they were to really count their military expenditure they wouldn't be able to justify it.

 

[vinuzap]

got this in my email as feed :

Pakistan has to pay interest of 8 billion $ from 2018 onwards on not 43, but on 104 billion $ revised estimated loan.

Already Pakistan has a debt of 90 billion $. I.M.F. & World Bank had warned Pakistan not to go for the CPEC project. Evefy Pakistani has a debt of 1Lakh & 10,000 Pakistanis rupees on their head.

Even currently Pakistan has raised loans at 8.75% interest rate from I.M.F. by mortguaging Lahore - Karachi motor way, Lahore - Peshwar motorway, all Pakistani radio stations & TV centres.

Earlier Pakistan had mortguaged Karachi Airport.

To get totally false publicity in some newspaper for Nawaz Sheriff having done good work & International community giving him a thumbs up, Pakistan govt has spent some crores - to fool their citizens. Rauf Klasra - one of Pakistani analyst is highly critical of such cooked up actions by some junior minister. He was submitting all these information to Moeed Pirzada.

Exports, foreign remittances are all falling for the 2nd consecuive year. Industries are being shifted to other countries. Foreign investments have stopped.

Saudi Arabia has sent back 39,000 Pakistanis working in their country.

Chinese trucks are exempted from paying toll tax. Apart from Chinese, which truck is going to pass from CPEC? Pakistan has nothing to export to China. Afghanistan is not involved in CPEC.

That remains Iran. How much Iran Exports - I.e. oil & gas, but all of that will be transported by Chinese trucks & tankers & pipelines.

Out of these total Chinese loan, less than 1 billion is earmarked for Balochistan.

Recently, the whole of Balochistan is out of bounds for all Pakistani’sfor 3 months, as ordered by China. That is why 2 Chinese Naval ships are stationed in gwader. What China is doing in Balochistan right now for thr next 3 months - even Pakistan govt does not know.

 

[vinuzap]

http://www.chitralnews.com/news/pakistan-mortgaged-airports-motorways-get-loans/

Pakistan has Mortgaged Airports, Motorways, to Get Loans
January 5, 2017
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For decades, Pakistani governments have been taking loans to fulfill local demands and start new projects. As things stand, Pakistan’s foreign debts have currently crossed around Rs. 75 trillion. Every Pakistani is now in debt of about Rs. 390,000.


Read More: Pakistan’s External Debt Will Soon Cross a Staggering $75 Billion

In recent times, the loan amounts have reached such highs that not even international or local lending institutions are willing to loan money under simple conditions since they want assurances that their investments won’t go in vain.

For that reason, Pakistani governments have started putting national assets of extremely high value as guarantees (mortgage) in exchange for more loans or otherwise for Sukuk Bonds.

What are Sukuk Bonds?
Sukuk bonds are Islamic bonds. They are structured in such a way that investors get returns without infringing any Islamic law (for example, no interest is charged on such investments). Sukuk represents undivided shares in the ownership of tangible assets relating to special investment activity. In other words, the bond issuing authority purchases an asset and the investors get partial ownership and returns.

The issuer also has to buy the bond back at par value at a later date.

We’ve compiled a list of national assets and the details regarding their mortagage based on official as well as leaked documents in the public domain. The sources have been included in the end.

Lets take a look at them one by one.

Jinnah International Airport Karachi Mortgaged

Back in 2013, the government used Jinnah International Airport Karachi as security for the Sukuk bonds and raised Rs. 182 billion based on it. The profits for bonds were to be paid using the income from the airport.

The Karachi airport hasn’t been mortgaged just once. Here are all the instances where it has been used as collateral:

• 2013 was the first year where the airport was put as collateral to borrow Rs. 182 billion.
• In December 2015, Rs. 117 billion were borrowed against the Karachi airport.
• In February 2016, Rs. 116.2 billion were raised by putting the airport on mortgage.
• A month later, in March 2016, the government used the airport as the underlying asset to borrow another Rs. 80.4 billion.

These amounts were received from local and international institutions and investors.

National Motorways and Highways Mortgaged

Recently, Pakistan government was ready to put up Sukuk bonds in order to raise $500 million from investors but it was oversubscribed at $2.4 billion.

Finally, the government decided to raise $1 billion from foreign investors by mortgaging the Islamabad-Chakwal section of the Islamabad-Lahore (M2) motorway. These bonds are set to mature within 5 years.

Back in 2014, the government pledged the Hafizabad-Lahore section of the M2 motorway to raise another $1 billion in terms of Sukuk Bonds with a 5-year maturity period.

In June 2014, the government borrowed Rs. 49.5 billion by mortgaging the Faisalabad-Pindi Bhatian Motorway (M3).

According to official reports from the Finance Minister and leaked documents from journalist Rauf Klasra the following motorways are already pledged to get loans:

• Peshawar-Faisalabad motorway
• Faisalabad-Pindi Bhattian motorway
• Islamabad-Peshawar motorway
• Islamabad-Lahore motorway

The news about the above mentioned M2 motorway was also leaked by Rauf Klasra before official announcement.

Back in 2006, the government decided to pledge most of the national highways and some motorways in order to raise Rs. 6 billion. Islamabad-Peshawar Motorway (M-I), Faisalabad-Multan Motorway (M-4), Islamabad-Murree-Muzaffarabad Dual Carriageway (IMDC), Jacobabad Bypass, D.G.Khan-Rajanpur Highway, Okara Bypass and several other toll-yielding projects were set as security. A consortium of banks provided the loan for seven years.

With this, the trustees own the motorway, all constructions on it, flyovers and interchanges in case of late payment.

PTV Mortgaged

According to leaked documents, Pakistan government has decided to mortgage all PTV assets in the whole country as collateral for more loans.

The PTV assets are estimated to be worth in billions of rupees at the very least and the national television also holds great importance as far as national security is concerned.

So far there has been no confirmation or denial from the government but considering that these are official documents, the leaks seem authentic. There have been no estimates of how much the government valued these assets for.

Radio Pakistan Assets Mortgage

Similar to the PTV mortgage, leaked documents state that all of Radio Pakistan’s assets in the country will be pledged to get loans.

More details have revealed that 61 Radio Pakistan buildings across the country have been valued at just Rs. 72 crore. Experts say that this amount is equivalent to the value of Radio Pakistan’s single building in Islamabad’s Red Zone let alone 61 buildings in premium areas across the country. Estimates price these assets at several times the valued amount.

By devaluing such a huge asset, it is the investors who are benefiting the most.

Another aspect questioned by the experts is that national radio holds the most importance in times of war and with matters heating up between India and Pakistan, we could lose an important national security asset if the government fails to return the loan on time.

Possible Consequences
Pakistan government has been taking these loans to fill exports gaps, increase foreign exchange reserves, meet budget requirements but more importantly to pay back previous loans.

Ishaq Dar is leading Pakistan to a debt-trap: Experts

When a government pays back loans by taking even more loans, it is usually a recipe for disaster. When commenting on this borrowing spree, local and foreign experts say that Pakistani Finance Minister is leading the country towards a “debt-trap”. This is a term experts use to explain such disastrous scenarios.

Pakistan can lose these assets if it fails to payback in time due to unforeseen circumstances

Moving on, this also means that Pakistan cannot pay back its loans at the moment mostly because of the lack of exports and tax collection. When the country cannot pay back loans, putting up national security assets as collateral for mortgage makes little sense.

Just imagine if Pakistan is late on any of the payments, and/or the situation with India worsens and results in a war, this could lead to Pakistan losing these assets to private institutions.

Issuing bonds is a good way to borrow money. However, mortgaging most of your vital installations like the biggest airport in the country, the national radio or TV or the central roads as collateral seems like a risky proposition to say the least. What if some issues occur and profits from these institutions cannot be used to pay back profits on the loans? The government would be in deep trouble if something like this happens.

Terrorist attacks or a war could put all profit returns burden on the government

Some analysts also question the use of Islamic Sukuk bonds for budget financing and then linking the returns with treasury bills, citing that it is forbidden and against Shariah laws. However, that is an altogether different debate for another time.

We just hope that our government(s), whether federal or provincial, find other means to improve the economy instead of issuing superficial claims based on such huge amounts of loans. With loans crossing reaching the $75 billion mark, we seriously need to put a stop to this before loans become unpayable and the country defaults.

 

[Bornubus]

Sell us POK and Gilglit Baltistan we will throw you $75 billion dollar hard cash. Or $150 billion if Pak add Baluchistan.

 

[Akshay_Fenix]

Sell us POK and Gilglit Baltistan we will throw you $75 billion dollar hard cash. Or $150 billion if Pak add Baluchistan.

That day is not far Sir ji, but instead of India("us") it will be China.

 

[aditya10r]

Sell us POK and Gilglit Baltistan we will throw you $75 billion dollar hard cash. Or $150 billion if Pak add Baluchistan.

A military expedition will cost less than that......................................................

 

[Flame Thrower]

That day is not far Sir ji, but instead of India("us") it will be China.

Pak can sell Baloch to China but can't sell POK.... Even China might not be interested in buying POK

Cause...POK is our territory, if they try to sell POK it will result in war and Pak will not get money for Baloch too...
All Pak can do is sell POK & Gilgit to India

 

[Bornubus]

That day is not far Sir ji, but instead of India("us") it will be China.

A military expedition will cost less than that......................................................

Our first Military expedition is to take back Aksai Chin but after executing un finish agenda of Partition that is to take back rest of Kashmir from Daal Khoor Punjabis.

 

[pankaj nema]

@Neo You Idiot

Read this News

Chinese textile park to further weigh on struggling Pak exports

https://www.thenews.com.pk/print/18...rk-to-further-weigh-on-struggling-Pak-exports

CPEC will screw up your TEXTILE exports

China is using CPEC for its own economy

 

[F-14B]

@Neo You Idiot

Read this News

Chinese textile park to further weigh on struggling Pak exports

https://www.thenews.com.pk/print/18...rk-to-further-weigh-on-struggling-Pak-exports

CPEC will screw up your TEXTILE exports

China is using CPEC for its own economy

Don't worry sub kuch sahi ho jaya ga once CPEC comes you evil hindoooo bhanniya
After all you are talking about the wahid islamic attami thakath in this qur e arze

@Neo

 

[gslv markIII]

All automakers bullish on Pakistan

No local manufacturing or value addition. This will hardly help anyone.

But here's what most Indians believe India look like by 2030.

Sad, if that's what my compatriots imagine a $7 trillion ($25 trillion PPP) economy to look like. But sure, dollar wouldn't flow through our drains like in Pakistan.

 

[gslv markIII]

For us, its just a great opportunity to attract investment in energy and infrastructure and use it as a catalyst for domestic and regional growth. It will add up to 1-2% additional growth tops in the next decade.

'Attract investments'? Loans aren't investments, neither do Pakistan have industrial infrastructure.

Even your only industry, textiles is doomed.

 

[Neo]

I see chootiyas all over the place.
Ek se barh kar ek.
India's finest

 

[Neo]

'Thar coal mine set to become Pakistan’s biggest industrial site'
By Reuters
Published: February 27, 2017

THARPARKAR DISTRICT: A line of trucks weaves in and out of the open coal pit that has been dug in the Thar desert in Sindh. Below the massive hole lies one of the world’s largest coal reserves, untapped until now.

For years Pakistan used its Thar coal reserves as a bargaining chip in global climate negotiations. Since it was not mining the coal, it argued, it should receive easier access to international climate finance and to clean technology to help it grow in a cleaner and more sustainable way.

But as part of its attempt to end the country’s energy crisis which has caused frequent power cuts for years, the government is encouraging mining companies to the area.

Traditionally Pakistan has had relatively low emissions of climate changing gases. But under the global Paris Agreement to address climate change, the country has admitted it is likely to see a four-fold increase in emissions by 2030.

Thar coal project enters construction phase

The coal mine is set to become Pakistan’s biggest industrial site, said Shamsuddin Shaikh, head of the Sindh Engro Coal Mining Company (SECMC), a joint venture between the Sindh government and Engro Powergen.

The company is mining one per cent of the deposits in one of 13 investment blocks. Coal is “the worst fossil fuel there is”, he told the Thomson Reuters Foundation.

But “Pakistan needs electricity — its GDP is currently affected by the lack of power”, he said. The estimated 175 billion tonnes of watery, low energy coal was first discovered in 1992 but because of its poor quality, most companies found it too costly to mine.

In 2012, SECMC, took up the challenge, convincing eight companies to join them, two of them Chinese. They are also now building a 660 megawatt coal power plant nearby — which the company wants to increase to 3,300MW by 2022 — and the Sindh government has improved roads and built an airport in the desert for the project.

Pakistani climate expert Qamaruz Zaman Chaudhry, currently advising the Asian Development Bank, said he has told the government “not to lock the country for the next 25 to 30 years into coal technology”. “Our role as a responsible member of the global community in combating climate change needs to be fully taken into consideration,” he said.

Most of the world, including China, is moving away from coal-based power generation, Chaudhry said.

Under the Paris climate agreement, countries are meant to be shifting to clean, sustainable energy as part of global attempts to curb greenhouse gas emissions and prevent the worst impacts of climate change, from worsening droughts and floods to accelerating sea level rise.

Move to tap Thar coal reserves in line with global trend

“Surely the indications are that the time may not be far when … countries not following the green energy path would be penalised. Our long term planning should not be focused on coal,” Chaudhry told the Thomson Reuters Foundation.

For the past three months villagers near the mine have been protesting SECMC’s mining plans, saying the project will pollute their water and threaten their ancestral lands.

The company plans to transport effluents from the watery mine via a pipeline into a reservoir which will cover at least 1,500 acres (600 hectares) of land once it is built. This will be done for the next two and a half years to dry the mine, and then the water will be treated and re-used in the coal power plant.

The pipeline, linking the reservoir to the coal mines 26 km away, is almost complete.

“They will pump dirty water from the mine to store in the (reservoir) and that will pollute the sweet water in our wells. Engro is willing to give us money but we don’t want it. This is our ancestral land and we won’t leave,” said Padma Bai, one of the villagers protesting the project.

Leela Ram, whose large home lies close to the reservoir, said it should be built nearer the coal mine.

“Why can’t they dump the water where there are no people?” she asked. The villagers have filed a case in the Sindh High Court and applied for a stay order to block the reservoir’s construction.

The court hearings are underway but construction goes on. “I will go all the way to the Supreme Court if need be,” said Ram, who is leading the protest.

The company said the site originally planned for the effluents was the nearby Rann of Kutch salt marshes but since they are a Ramsar Site for migratory birds the natural depression of Gorrano was selected instead.

The company is providing alternative pasture for villagers living near the Gorrano reservoir, and building new homes, schools and healthcare facilities for two villages being relocated to make way for the mine and power plant, said Mohsin Babbar, the company’s media manager.

“This will be a benchmark project – and will set the standard for others,” said Shaikh, referring to the new homes, a planned 70 bed hospital and a training centre for the local people.

“Of course if they (villagers) are not happy, this project will not work,” he added.