Pakistan Economy: News & Discussion

[Rahul Prakash]

India has long been known to have massive deposits of methane hydrate. These are tentatively estimated at 1,890 trillion cu.m.

An Indo-US scientific joint venture in 2006 explored four areas: the Kerala-Konkan basin, the Krishna-Godavari basin, the Mahanadi basin and the seas off the Andaman Islands. The deposits in the Krishna Godavari basin turned out to be among the richest and biggest in the world. The Andamans yielded the thickest-ever deposits 600 metres below the seabed in volcanic ash sediments. Hydrates were also found in the Mahanadi basin.

https://ktwop.com/2013/03/17/fire-ice-methane-hydrate-success-in-japan-gets-india-all-excited/

However, nobody has yet found an economic way of extracting gas from hydrates. As you said, solar and battery power is the way forward.

Hehe thicc deposits extra thicc deposits

 

[Butter Chicken]

Pakistan to pay back $100 bn to China by 2024

ISLAMABAD: Pakistan has to payback $100 billion to China by 2024 of total investment of $18.5 billion, which China has invested on account of banks’ loan in 19 early harvest projects mostly relating to energy sector under China Pakistan Economic Corridor (CPEC).

The sources in Chinese Embassy told ‘The News’ that loans which China had given to Pakistan were considered as concessional loans, having special subsidy from the Chinese government. These loans are not the burden on Pakistan economy, as these constitute only 1.1 percent of total Pakistan foreign debt.

The sources said that Chinese financial assistance to Pakistan made a big contribution in strengthening Pakistan’s economy. Four years back GDP of Pakistan was 3.6 but now it reached 5.2, this reflected the fact that CPEC has played a major role in the economy of the country,” sources added.

Embassy’s sources further said that Chinese companies working in Pakistan has taken loans from Chinese banks for different development projects under CPEC and these companies are responsible for paying back loans not the Pakistani government.

The sources further said that China is also providing free assistance to some high-profile projects like construction of Gwadar Port, motorway linking Gwadar Port, schools and emergency health care centers etc. In future, China has planned to build more emergency healthcare centers in different parts of the country.

So far there are around 20,000 Pakistani students getting education in China. A large number of them are on Chinese government scholarships. CPEC also contributed in overcoming unemployment problem in Pakistan. As many as 60,000 Pakistanis got jobs in CPEC-related projects and 24,000 people got direct employment in different projects of CPEC. The sources said that in the next phase, china will focus to build industrial parks, which will bring not only Chinese but also other countries’ investment to Pakistan.

 

[Kalki_2018]

pakistan won't survive long enough for that. So no problem.

 

[pankaj nema]

Foreign exchange: SBP's reserves drop below $14b, stand at $13.9b

 

[Bhoot Pishach]

Biggest Porki Bank HABIB BANK LTD. engaged in Terror Funding, Drug Money, Money Laundring.

Fined $225 Million in USA along with Closure of NY Branch.

Investigation Going on.


rison:

 

[pankaj nema]

Import duty on eatable, luxury items raised by up to 50pc

 

[Butter Chicken]

Govt takes $450m loan to prop up sliding forex reserves

ISLAMABAD: Pakistan has obtained a $450-million short-term foreign commercial loan from a Credit Suisse-led consortium of banks aimed at arresting the slide in official foreign currency reserves that have depleted $4.4 billion in just one year.


The consortium consists of Credit Suisse AG, United Bank Limited and Allied Bank Limited, sources in the Ministry of Finance said on Thursday. They did not disclose the interest rate that the government would pay on the short-term facility.

It is the third loan agreement that Pakistan has signed with Credit Suisse in the past five months, indicating its growing dependence on an unusual source of foreign financing. Earlier, the finance ministry signed two agreements for a loan of $650 million with Credit Suisse on June 7 and May 18.

Spokesman for the finance ministry did not comment on the report.

With the fresh loan, total commercial loans that Pakistan obtained in just three months increased to $703 million, said the sources. These agreements have been signed at a time when independent economists and even the army chief have expressed concern over the “sky-high debt”.

Due to growing vulnerabilities of Pakistan’s economy, the military has now linked security matters with the country’s economy.

On the back of fresh foreign injection, the official foreign currency reserves of the State Bank of Pakistan (SBP) increased to $14.158 billion as of October 13. The SBP reported on Thursday that there was a net increase of $370 million in the foreign currency reserves. This appeared to be the result of borrowing from Credit Suisse.

The government has taken these loans after failing to attract sufficient non-debt creating inflows, like enhanced exports and foreign direct investments, for meeting its external financing requirements.

The foreign commercial borrowing has temporarily halted the downward slide in the foreign currency reserves, which dropped $4.4 billion in the past one year due to fast drying up of foreign currency inflows through regular channels and a major dip in exports and remittances.

The sources said due to growing dependence on foreign commercial loans, Pakistan’s external debt servicing has increased significantly in the past three years when the PML-N government started extensively taking short-term loans from commercial banks.

They said Pakistan would require at least $5.8 billion for foreign debt servicing in the current fiscal year 2017-18. This includes $4.5 billion in principal repayments and $1.3 billion in interest cost. The country is returning these loans by taking more loans.

Early this month, the federal cabinet regularised nearly $2 billion in foreign commercial loans that the government had obtained during the second half (January-June) of the last fiscal year without prior approval of the cabinet.

These borrowings were part of a record-breaking $4.4 billion in short-term foreign commercial borrowing by the PML-N government during fiscal year 2016-17 (FY17) that ended on June 30, 2017. Of this, $2.3 billion came from Chinese financial institutions alone.

Overall, the government of former prime minister Nawaz Sharif had obtained a whopping $35 billion in new loans during his four-year tenure to repay maturing debt and keep official foreign currency reserves at a level which could give a sense of economic stability to investors.

About $17 billion or nearly half of the total loans obtained from July 2013 to June 2017 were utilised to repay the previous debt. The government added net $18 billion to the country’s total external debt and liabilities – the highest amount added by any government during its tenure.

Since 2008-09, Pakistan has added $43 billion in external debt, which was more than half of the external debt and liabilities that have been added since independence, according to Dr Ashfaque Hasan Khan, former director general of debt, Ministry of Finance.

He said the balance of payments position was in a precarious condition and the current account deficit will likely touch $18 billion by the end of current fiscal year.

 

[Flame Thrower]

The more commercial loan Pak gets the
Better for us. Short term commercial loans cost a lot when it comes to repayment. These also means a lot of squeezing on the future paki govt spending.

These commercial loans might temporarily slowdown the drop in foreign currency, but on a long run, it will have a huge impact on the economy.

Credit Suisse is a Swiss bank, so I am hoping for no loan wavier for the services Pak provided.

In other words, Pak's economic situation might become so hopeless that it might declare bankruptcy in a matter of years. All we need is a stronger pounding on LoC, forcing PA to dry up its funds.

One can always say that "there is always Islamic Brotherhood to save Paki ass." But, Ummah itself is in a dire situation due to Yemen war, Low Oil prices, over a hundred billion on weapons purchase, unconfirmed reports on Russian weapons purchase.

I believe Ummah might support Pak, but not enough save it from Debt Quagmire. Especially if it is Chinese Quagmire, then Ummah might think twice on saving Paki Arse.

 

[Butter Chicken]

Unsound projects

Capital suggestion

‘Unsound economic projects’ are the new weapons of war. In the 70s, President Richard Nixon ordered the CIA to “make the [Chilean] economy scream (declassified documents relating to the military coup, September 11, 1973)”. Lo and behold, Pakistan’s economy is screaming today.

For the record, Pakistani leaders stand convinced of taking on additional layers of debt on top of existing layers of debt. For the record, Pakistani leaders stand convinced of ‘adopting economic policies that are bound to impoverish’ Pakistan.

For all of us to see, ‘uneconomical, financially non-viable and fiscally unsound’ projects are being bankrolled. The 27-kilometer Orange Line, the light rail rapid transit system, is expected to cost Rs162 billion. The estimated breakeven is Rs175 per ticket. At Rs20 a ticket, the Orange Line will lose Rs40 million a day or Rs14 billion a year every year. Plus, an additional Rs4 billion for operation and maintenance. Assuming that the Chinese loan is concessional, the debt payment of interest and principal is estimated at around Rs10 billion a year. Red alert: The debt burden is in dollars and the project loses money.

Imagine, the Government of Pakistan has guaranteed an annual Return on Equity (ROE) of 34.49 percent for the Thar Coal Block-I Power Generation Company (Private) Limited. The project cost is estimated at $767 million of which $575 million is debt. The interest rate used as the reference is Inter Bank Offer Rate (LIBOR) of 0.45 percent plus 450 basis points (https://nepra.org.pk/Tariff/IPPs/00...0 TCB-I Upfront Tariff 8694-96 10-06-2016.PDF).

For the record, the annual Return on Equity guaranteed by the Government of Pakistan on the Sahiwal Coal Power Project stands at a tall 27.2 percent. The interest rate used as the reference is Inter Bank Offer Rate (KIBOR) of 11.91 percent plus 350 basis points. The project cost is estimated at $956 million of which $723 million is debt (https://nepra.org.pk/Tariff/IPPs/Hu...ONT COAL DETERMINATION 31-03-2015 4385-87.pdf).

Red alert: This is awfully expensive electricity. Our industry cannot produce exportable competitive products with this electricity. Resultantly, we will have a huge dollar-denominated debt servicing burden but no additional exports.

Nandipur has gone from $329 million to $847 million. Neelum-Jhelum has gone from Rs15 billion to Rs414 billion. The New Islamabad Airport has gone from Rs37 billion to over Rs100 billion. Imagine, the tariff for Nandipur is: Refined Furnace Oil Rs18.17/kWh; High Speed Diesel Rs27.91/kWh and Gas Rs8.44/kWh.

Pakistan is getting crowded with ‘unsound economic projects’. Debt is the new weapon of war – debt that leads to ‘emergency managers’ and ‘emergency managers’ then “turn over the reins of the economy” to their political masters. The combination of unsound economic projects, debt, enforced austerity (by the IMF) and under-investment in health and education are the new weapons of war. This is what the 4th Generation War is all about.

Missiles, as weapons of war, are out. Unsound economic projects, as weapons of war, are in. Tanks, as weapons of war, are out. Debt, as a weapon of war, is in. Cold start, as a weapon of war, is dead. An economic strategy based on unsound economic projects is in. Open warfare is out; covert economic operations are in. Military force is out; financial warfare is in.

 

[mayfair]

Napaki economy is the largest organised begging network in the world- beg from Peter to repay Paul and then beg from Wang to repay Peter, then beg from Paul to repay Wang....

Add a gun to the head and you get the picture...

 

[sorcerer]

Unsound projects

pakistan is in deeper than deepest shit...when it comes to china.

 

[LordOfTheUnderworlds]

Despite all this, Pakistan's debt to GDP ratio is not very bad for a developing country (If we presume Pakistans reported figures are correct). It is difficult to bankrupt Pakistan without international sanctions because their main source of foreign exchange is remittances and they have unlimited supply of people to send/smuggle them all over the world.

 

[mayfair]

Despite all this, Pakistan's debt to GDP ratio is not very bad for a developing country (If we presume Pakistans reported figures are correct). It is difficult to bankrupt Pakistan without international sanctions because their main source of foreign exchange is remittances and they have unlimited supply of people to send/smuggle them all over the world.

Unlike most other countries with high debt to GDP ratio, nearly all of Shitistan's debt is external and much of it is sovereign debt that is backed up by state guarantees. This is why they are in a deep hole. Unlike most other countries that seek international loans for infrastructure or for social development, Shitistanis beg for new loans to balance their payments.

Napakis do not have the industrial capacity of note, nor any worthwhile service sector nor a big enough tax base or even the know-how to generate enough revenues on their own. Their biggest exports are textiles and agricultural products that add up to nearly 80% if not more of their exports. Textiles themselves, contribute upwards of 60%.

They must therefore, continuously borrow to service the new loans, thereby giving rise to one of Napakis' favourite phrases- circular debt.

But this is not surprising, even since the days of Djinnah, they have offered their services to anyone who can pay and help them against India. They know nothing else, they have known nothing else.

 

[LordOfTheUnderworlds]

Unlike most other countries with high debt to GDP ratio, nearly all of Shitistan's debt is external and much of it is sovereign debt that is backed up by state guarantees. This is why they are in a deep hole. Unlike most other countries that seek international loans for infrastructure or for social development, Shitistanis beg for new loans to balance their payments.

Napakis do not have the industrial capacity of note, nor any worthwhile service sector nor a big enough tax base or even the know-how to generate enough revenues on their own. Their biggest exports are textiles and agricultural products that add up to nearly 80% if not more of their exports. Textiles themselves, contribute upwards of 60%.

They must therefore, continuously borrow to service the new loans, thereby giving rise to one of Napakis' favourite phrases- circular debt.

But this is not surprising, even since the days of Djinnah, they have offered their services to anyone who can pay and help them against India. They know nothing else, they have known nothing else.

Another unusual skill they have is the ability to run unbelievably huge international scams and get away with it : AXACT in recent years, and BCCI bank few years ago; quite possibly run with support of deep state. There might be others running without being exposed and contributing to formal economy.
Pakistan is a criminal nation in the comity of nations like a hardened criminal living as an honorable citizen in a middle class society with support of some higher powers.

 

[Mikesingh]

Missiles, as weapons of war, are out. Unsound economic projects, as weapons of war, are in. Tanks, as weapons of war, are out. Debt, as a weapon of war, is in. Cold start, as a weapon of war, is dead. An economic strategy based on unsound economic projects is in. Open warfare is out; covert economic operations are in. Military force is out; financial warfare is in.

Well summarized! This is new-gen warfare. The only downside is that it takes years and not days for a country like Pak to go under and drown. But at the rate at which the Porkis are committing economic harakiri, it will probably be a matter of months and not years!

Let's keep our fingers crossed for the day when Pak announces bankruptcy! :biggrin2:

 

[mayfair]

The problem is that Napakis have decided their fall back option. They are fully aware that West and India are wary of two things that will accompany a Napaki collapse
1. Napaki nukes finding their way to "non-state actors" (Laughable, since Napaki nukes are anyway available to the "non-state actors", the lines in Shitistan are non-existent)

2. 300 million, unwashed, illiterate, unskilled, perverse, coarse-grained and to borrow the rat Manishankar Aiyer's phrases, uncivilised and uncivilisable Napakis will spill over the borders and will make the present refugee crisis in Europe look like a university open day in comparison. Iraq and Syrian experiences have only enhanced these fears. Napakis will be ten times worse and it is we in India who'll face the brunt.

Thus, Napakis have carefully navigated themselves into a self-professed "too-big-to-fail" category. This is becoming increasingly evident in their ISPR broadcasts, that are presented as "panel discussions" and the rantings of the mushrooming difaai tarjiyakaar and daanishwars.

They have absolutely no incentive to better the things. The elite have one foot firmly planted in the West- every Napaki who can afford it, owns properties and business interests in the West. They'll be the first to bolt at the first sign of trouble. Those who cannot, will either perish or join the "revolters".

Mean-e-while, the void is being filled by Islam and Islamic charities. They provide what the state had failed to do so far. All they demand in return is absolute obedience. It's a population that is being zombified on a national scale.

 

[kamaal]

Too much of useless celebration is going on here. Bankrupt Pak means army takesover power and rise in insurgency in India. But it is also true that they are in deep gobar and should do something dramatic to come out of this troubled times.

 

[Dovah]

Too much of useless celebration is going on here. Bankrupt Pak means army takesover power and rise in insurgency in India. But it is also true that they are in deep gobar and should do something dramatic to come out of this troubled times.

Bankrupt Pakistan means that factions inside the army fight for the scraps and have little time or motivation to plot against us. Extremism against India is Pakistani national policy and its raison d'etre.

 

[sorcerer]

Too much of useless celebration is going on here. Bankrupt Pak means army takesover power and rise in insurgency in India. But it is also true that they are in deep gobar and should do something dramatic to come out of this troubled times.

Army cant do the coup in pakistan any more cuz that will bring world wide sanctions on porkistan.
Meaning thats the end of ARMY becoming USEFUL for pakistan.

There was always rise in insurgency against India, no matter what the frequency, India has always pushed and punishes pakistan.
Only thing is India has upped the ante this time and changed its stance, with Indian army given a free hand its the pakis who will lose more NOW!

Economy of pakistan will NEVER allow the rise in insurgency as these pigs of pakistan is never waging a JIHAD for ideology but MONEY!!! JUST MONEY.

They will do JIHAD not for their one God, but for one MONEY and who pays them more.
pakistan knows it more than everyone thats why pakistan is deep shit worried about its economy.

 

[Butter Chicken]

Pakistan finalises two consortiums to raise another $2b

ISLAMABAD:

Pakistan has finalised two consortiums of financial advisors to float dollar-denominated Euro and Sukuk bonds as the country seeks around $2 billion aimed at taking pressure off the balance of payments’ position.


The Eurobond consortium would comprise of four international commercial banks. The Sukuk bond consortium consists of six banks, said officials in the Ministry of Finance. The financial bids were opened on Tuesday.

Citibank, Deutsche Bank, Standard Chartered Bank and Industrial & Commercial Bank of China (ICBC) will be mandated to arrange the Eurobond transaction. The government will pitch a minimum $500-million bond but will try to raise at least $1 billion through the Eurobond, said the officials.

In September 2015, the government had issued Eurobonds valuing $500 million with a 10-year maturity in the international market at an interest rate of 8.25%. It offered 6.12% above the US Treasury rate for the bond, making it one of the most controversial deals.

The Sukuk bond consortium of financial advisors consists of Citibank, Deutsche Bank, Standard Chartered Bank, ICBC, Dubai Islamic Bank and Noor Bank JSPC, said the officials. Again the government will pitch $500 million Sukuk bond but will try to raise over $1 billion, said the officials. The M3 Motorway (Pindi Bhattian-Faisalabad) would be pledged in collateral to raise loans through the Sukuk bond.

In September last year, the government raised $1 billion by floating Sukuk bond at 5.5% interest rate.

The combined size of the two deals could go up to $2 billion or $3 billion, one banking official said on Wednesday.

The finance ministry did not respond to a request to comment.

The officials said that the DIB and ICBC had given the lowest financial bids, quoting 1.5% less fee than offered by three Europe-based banks. The finance secretary asked the three commercial banks to match the fee, if they wanted to become part of the consortium, said the officials.

They said that the Ministry of Finance was not officially announcing the financial advisors consortiums, as it was waiting written concurrence of three European-based banks to match the lowest bids. But their local representatives have already given the verbal concurrence, said the officials.

This time the government was expecting better price due to availability of liquidity in the international markets. In recent months, Abu Dhabi, Saudi Arabia, Jordan, and Yemen have raised debts from the international markets and their bids were significantly over subscribed.

But the fluid political situation in Pakistan and the desperation to raise loans to protect the official foreign currency reserves could affect the overall price, said the officials.

Pakistan is rated B by Standard & Poor’s, B3 by Moody’s and B by Fitch. Pakistan’s ratings are stable for the last couple of years that could also help it get a better price.

The finance ministry is targeting November 15 to conclude the transactions. The country’s external sector position has significantly weakened due to the current account deficit that swelled to $3.6 billion in the first quarter – 117% more than the corresponding period of the previous year.

Due to the growing current account deficit, official foreign currency reserves are constantly under pressure and depleted over $2 billion in the past three months alone. The official reserves stood at $14.2 billion as of October 13.

The global bonds and borrowings from the commercial banks has remained the preferred choice of the finance ministry that has raised $10.8 billion by utilising these two modes since 2014.

The Senate Standing Committee on Finance is already investigating the 2015 Eurobond issuance. The Standing Committee has been trying to determine whether the money invested by foreigners in the dollar-denominated bonds had actually flown from Pakistan.

It has twice decided to call the representatives of three international banks, which the government had hired to float $500 million worth of Eurobonds. The government hired Citibank, Deutsche Bank and Standard Chartered Bank for the bond float.

But each time the finance ministry did not let it happen but the issue remains pending till date.