Pakistan Economy: News & Discussion

[Mikesingh]

Amid declining reserves, Pakistan set to start borrowing journey

ISLAMABAD: After a little over a year, Pakistan will today (Wednesday) hold road shows in the Middle East and the United States as it looks to borrow up to $3 billion by floating Islamic and conventional bonds.

WTF is an 'Islamic bond'?? Islamic this and Islamic that!!

Is there also an Islamic ass and a conventional ass in Pak?

 

[Satybharat]

bhukha, nanga aur bhikmanga Pakistan

70 saal se US ke samne pant khol ke khada tha
ab Chine ke samne pant khol ke khada hai

Sab ne maar ke chhod diya India ke samne..

 

[Suryavanshi]

bhukha, nanga aur bhikmanga Pakistan

70 saal se US ke samne pant khol ke khada tha
ab Chine ke samne pant khol ke khada hai

Sab ne maar ke chhod diya India ke samne..

Inshallah Hum log bhi chodeneg ek din

 

[Flame Thrower]

WTF is an 'Islamic bond'?? Islamic this and Islamic that!!

Is there also an Islamic ass and a conventional ass in Pak?

They are Sukuk bonds...

One of the worst ways to borrow money.

 

[kamaal]

They are Sukuk bonds...

One of the worst ways to borrow money.

Worst ???

How ? Plz explain. Would like to know your insight.

 

[LordOfTheUnderworlds]

Escape to manhood

THOSE who are always complaining that the prices in the market never come down can look for an example to the contrary. They can easily find out that the rates of escaping Pakistan in the books of traffickers in Sialkot, Mandi Bahauddin, Gujranwla and Gujrat have come down drastically in recent years. There is an economic slump in the European countries the Pakistanis set out for, illegally, to find life and fortune.

This slowdown from Greece onwards has led to a dearth of work opportunities, and to a lower fee for human smugglers who have been preying on dreamers in Pakistani cities, and more freely, in the villages in the country for long.

Once the agents charged in excess of Rs600,000, often close to a million per head, for illegal transportation from Gujrat or Gujranwala to Turkey. More precisely, the expertise was offered just for an attempt at landing the client in Turkey; it was never guaranteed that an aspirant would reach his destination. Quite often, the operation would run into trouble and the journey would end in a nightmare. It could frequently end with the daring runaway kid making an early exit from this transitory world.

The long haul would find fleeing Pakistanis in the most unusual postures. There are so many accounts of how they would be packed inside a car boot; one version related by a reporter said how one boy — the wholes five feet, some inches of him — traversed a treacherous route somehow folded beneath the dashboard of a vehicle. He survived the ordeal to tell the tale, unlike many others who died on their chosen path to stir up momentary protest and official action destined to peter out in trademark Pakistani haste.

In the past, however, it was thought that the more difficult and the more dangerous part of the arduous and uncertain journey would be reserved for a time and territory which came much later than the site of the latest tragedy. The latest incident in which 20 youth from parts of central Punjab near Gujranwala were apparently ambushed before being killed in Balochistan indicates perils nearer home.

For a populace with average awareness there would be some kind of a search for reasons for the lowering of the illegal human trafficking package. But if any probing question were to be asked of these smugglers and their agents, the lowered charges would appear to have encouraged those with comparatively meagre financial resources to try the option. For as little as Rs 100,000, the escape route was likely to appeal to young men with little in their pocket and no hope of a turnaround at home.

Pakistan is a big country. It has something for everyone whether they are deserving or not. Pakistan’s countryside where these human smugglers enjoy greater freedom than perhaps they do in the urban centres are overflowing with all kinds of ambitious souls. Some of them are there at hand to cultivate the lands. Some are convinced — at least in the initial stages of their lives — to give education, ‘worldly’ or religious, a shot. Many are seduced by the urban charms to dedicate themselves to the cities, acting as a constant source of brawn and verve that keep the proud Karachis and Lahores going just when the ‘more original’ dwellers there have become a little too complacent about proceedings.

After having pledged a fair share of the human resource to all these heads, there is still a huddle and half of them left of wandering men looking for a vocation. They are buoyed by stories of the riches made by those who have tried to overcome the odds against them by the exploring the world that exists at a distance.

It is dangerous to typecast but on an average day it is not at all impossible for a visitor to a village to run into a group waiting to be rescued from their environs. The romance attached to it apart from the news of the arrival of a person who ‘can’ help find some of the men jobs can create so much excitement in the village. The folks may bombard you with applications for all kinds of jobs that are certain to take the lucky appointee far away from the so-called and romantic ‘ideal comforts of rural living’. And the guest’s position may suffer a huge blow the moment they learn that he is not quite the saviour sent to set them free from the mundane cycle they are caught in.

The tales of another world that can beckon with a little effort on their part is surely a mantra that is going to win over these boys without too much of an effort. They are conditioned by the surrounding voices to try the shortcut. Not least responsible for their ultimate decision to go is the manly tradition in which they are trained.

There is a lot of grownup pride attached to this act of running away — the stories spread en route the great escape appear to suggest so. It is not just an economic option. It is not only the hope of helping out their family which encourages these youngsters to leave their dear ones behind. It is not just the unexciting situation at home. It is the feeling of carrying out an important assignment entrusted to only the able ones. It is the feeling of being involved in an act of bravado.

One significant factor that helps these young men make the move seemingly is the adventure of it all. They undertake the journey as a symbol of their coming of age, as if their transformation to manhood has to be backed by an exhibition of their powers to undertake the long, often disastrous journey.

The writer is Dawn’s resident in Lahore.

Published in Dawn, November 24th, 2017

.........................

 

[Butter Chicken]

Govt likely to raise only $1.5b through Eurubonds, sukuk issuance
(Thanks to the dharna :bounce

ISLAMABAD: The federal cabinet has approved borrowing of up to $3 billion via a Eurobond and sukuk, but the government would “most likely” raise only $1.5 billion, a senior Pakistani government official told Reuters on Tuesday.

Pakistan’s foreign exchange reserves decreased by $137 million to $13,541 million in the week ended November 17, compared with $13,678 million in the previous week, latest central bank data showed.

 

[Kalki_2018]

These bonds are just one more way of taking on more debt. PML-N is really going all out to screw pakistan for ever. More power to them.

 

[LordOfTheUnderworlds]

Are these bonds mostly bought by people of Pakistani origin living overseas?

 

[Flame Thrower]

Worst ???

How ? Plz explain. Would like to know your insight.

Sorry for late response. Here is the link for more info.

http://lexicon.ft.com/Term?term=sukuk-(islamic-bonds)

In my understanding of difference between Sukuk and normal bonds is

In Normal bonds, we should pay money on specific date.

But in Sukuk, the bond holder gets a percentage of the asset. It means, he also gets a share of money generated through asset. This means borrower will end up paying more money. Even when the asset is to be sold out, the bond holders get his share of the money generated by selling that asset.

I feel Sukuk bonds are a way of robbing people in daylight.

 

[Flame Thrower]

Govt likely to raise only $1.5b through Eurubonds, sukuk issuance
(Thanks to the dharna :bounce

ISLAMABAD: The federal cabinet has approved borrowing of up to $3 billion via a Eurobond and sukuk, but the government would “most likely” raise only $1.5 billion, a senior Pakistani government official told Reuters on Tuesday.

Pakistan’s foreign exchange reserves decreased by $137 million to $13,541 million in the week ended November 17, compared with $13,678 million in the previous week, latest central bank data showed.

I don't think this is a good news.

Currently Pak has current account deficit of over $12 billion.

If Pak borrows $3 billion through Sukuk, then Pak will have more forex and can run long enough to borrow another loan in 2018. Thus more assets will be in mortgage and in when we discuss with Pak on IWT with WB in the loop, we can manipulate with WB and get favorable ratio(maybe 50:50) to us on IWT. I hope to have discussions with Pak and WB on IWT by Q3/Q4 2018.

If Pak takes less loan, then the situation will become dire and IMF might bail out Pak before the time is ripe. We may not have a favourable situation while discussing with Pak and WB on IWT.

This is just my assumption and I could be totally wrong too.

Thus I rest my case.

PS. Thank you @Prashant Sharma for correcting me.

 

[Prashant Sharma]

Currently Pak has trade deficit of over $12 billion.

Trade deficit is more than $32 billion. That's CAD

 

[kamaal]

Sorry for late response. Here is the link for more info.

http://lexicon.ft.com/Term?term=sukuk-(islamic-bonds)

In my understanding of difference between Sukuk and normal bonds is

In Normal bonds, we should pay money on specific date.

But in Sukuk, the bond holder gets a percentage of the asset. It means, he also gets a share of money generated through asset. This means borrower will end up paying more money. Even when the asset is to be sold out, the bond holders get his share of the money generated by selling that asset.

I feel Sukuk bonds are a way of robbing people in daylight.

About the Bold part.

It depends on the contract negotiation. And such deal can be signed in normal bonds/equity too. In short you explained the extreme form of sukuk.

 

[Butter Chicken]

Ishaq Dar escaped after fudging data!

ISLAMABAD: After raising false hopes of fiscal discipline, the federal government on Tuesday admitted that budget deficit in the first quarter of current fiscal year actually stood at Rs431 billion, higher by one-third than the amount announced last month.

“Based on actual data, the overall fiscal deficit for July-September 2017 has been worked out at 1.2% of gross domestic product (Rs431 billion),” said the Ministry of Finance in a statement.

On October 9, the ministry had sparked surprise by claiming that the budget deficit in the first quarter was 0.9% of GDP or Rs324 billion.

The revised 1.2% deficit indicates that like the previous fiscal year the government will miss the annual 4.1% target by a wide margin this year too.

 

[Yggdrasil]

I don't think this is a good news.

Currently Pak has current account deficit of over $12 billion.

If Pak borrows $3 billion through Sukuk, then Pak will have more forex and can run long enough to borrow another loan in 2018. Thus more assets will be in mortgage and in when we discuss with Pak on IWT with WB in the loop, we can manipulate with WB and get favorable ratio(maybe 50:50) to us on IWT. I hope to have discussions with Pak and WB on IWT by Q3/Q4 2018.

If Pak takes less loan, then the situation will become dire and IMF might bail out Pak before the time is ripe. We may not have a favourable situation while discussing with Pak and WB on IWT.

This is just my assumption and I could be totally wrong too.

Thus I rest my case.

PS. Thank you @Prashant Sharma for correcting me.

They will simply default and declare bankruptcy like Spain, Greece, etc. I don't see how it's going to change Porkistan in any meaningful way.

 

[nongaddarliberal]

Any chance of hyper inflation in Pakistan like what happened in Brazil and Zimbabwe?

 

[Rahul Prakash]

They will simply default and declare bankruptcy like Spain, Greece, etc. I don't see how it's going to change Porkistan in any meaningful way.

It will atleast severely hamper weapons acquisition in army navy and airforce,especially the navy and the airforce.

They already are running weapons past use date,this will cause them to really hollow out their inventory.

 

[Flame Thrower]

They will simply default and declare bankruptcy like Spain, Greece, etc. I don't see how it's going to change Porkistan in any meaningful way.

I want the same, but I want them to declare bankruptcy in Mid 2018.

Then GoI can discuss with WB and Pak on IWT. We can throw few $billion to sweeten the pie and change the water ratio to 50:50.

Bankrupt nations will have little choice to resist such offers.

Or at least I expect so

 

[Prashant Sharma]

I want the same, but I want them to declare bankruptcy in Mid 2018.

Then GoI can discuss with WB and Pak on IWT. We can throw few $billion to sweeten the pie and change the water ratio to 50:50.

Bankrupt nations will have little choice to resist such offers.

Or at least I expect so

We should never do that. Let them die!!!

PS - We can't stop 50% of water. Rivers flow down the gradient

 

[Prashant Sharma]

I want the same, but I want them to declare bankruptcy in Mid 2018.

Then GoI can discuss with WB and Pak on IWT. We can throw few $billion to sweeten the pie and change the water ratio to 50:50.

Bankrupt nations will have little choice to resist such offers.

Or at least I expect so

We should never do that. Let them die!!!

PS - We can't stop 50% of water. Rivers flow down the gradient