Pakistan Economy: News & Discussion

[indiatester]

US sees Chinese debt responsible for economic woes in Pakistan

WASHINGTON: The United States early on Friday said that the huge Chinese debt responsible for the economic challenges in Pakistan, adding that it will review government's bailout plea to the IMF from all angles, including the country's debt position.

During a press conference,the State Department spokesperson Heather Nauert said; "We understand that Pakistan has formally requested assistance from the International Monetary Fund (IMF). In all cases, we examine that closely from all angles of it, including Pakistan's debt position, in evaluating any type of loan programme," adding this is something the United States has been tracking fairly closely.

Responding to a question, Nauert said; "The secretary had spoken about this a few months back, I know, in some interviews not that long ago. I think part of the reason that Pakistan found itself in this situation is Chinese debt, and the fact that there is debt that governments have incurred that they maybe thought wouldn't be so tough to bail themselves out of, but has become increasingly tough."

The State Department response on Pakistan's IMF bailout request appeared to be in sync with the statement made by IMF Managing Director Christine Lagarde.

The IMF’s Managing Director, Christine Lagarde, has confirmed that Pakistan requested financial assistance from the IMF to help address the country’s economic challenges and the Fund would be sending its team to Islamabad in coming weeks to initiate discussions for possible package.

To a questions on this issue in Bali, Indonesia, Lagarde said she would require absolute transparency on Pakistan's debts, including those owned by China.

https://www.google.co.in/amp/s/www.thenews.com.pk/amp/379848-chinese-debt-responsible-for

Now the earlier master seeks his pound of flesh.... Uncle didn't like his bitch sleeping with Lizard and wants her bitch back on his bed......

Would taking loan from IMF mean that Pakistan has to get rid of big Chinese projects like CPEC and all?
They surely can't spend money on these large projects with questionable returns and expect them to be financed by IMF.
What hit would their military spending take is also necessary to understand.

 

[The Juggernaut]

I went away from DFI for few days, and so much happened here. This much news started pouring out from pakistan, so, finally titanic has hit the ice-berg. We were expecting for a long time. So, finally for this thread we can say "Ache din aane wale hai ."

 

[Aaj ka hero]

I am waiting for the BERLIN WALL COLLAPSE DAY for this nation.
Since it came to inception the ONE THING THEY HAS DONE SO PERFECTLY is to hate INDIA and this is the only thing they have done so Perfectly.

 

[sorcerer]

'Disclose All Chinese Dept if you want a bailout package' - IMF to Pakistan

International Monetary Fund (IMF) Managing Director Christine Lagarde on Thursday said that a bailout deal with Pakistan would require "absolute transparency" of its debts, many of which come from China's landmark Belt and Road Initiative.

"In whatever work we do, we need to have a complete understanding and absolute transparency about the nature, size, terms of the debt that is bearing on a particular country," Lagarde said at the IMF and World Bank Group annual meetings in Bali, Indonesia.

She added the IMF needed to understand the extent of the position of the debt, including lending from sovereign governments and from state-owned enterprises, so that officials could determine a country's debt sustainability, Efe news reported.

Her statements indicated that Pakistan could be forced to disclose the full extent and terms of Chinese lending it received in recent years as part of its participation in the Belt and Road Initiative, China's vast global infrastructure-spending programme.

Earlier this week, Pakistan said that it would be seeking a loan from the IMF. The country has a ballooning trade deficit, falling currency and is quickly exhausting its foreign-exchange reserves. Experts say the country needs about $12 billion to cover its imports and meet upcoming debt payments.

Lagarde said she didn't meet Pakistan's Finance Minister Asad Umar or received a formal request for IMF assistance yet. But she said that the IMF will meet the Pakistani delegation on Thursday and that the IMF was "available to its entire membership".

Pakistan's requirement for an IMF loan has already been complicated by its ties to China. It has been the largest recipient of funding under Beijing's Belt and Road Initiative.

In July, US Secretary of State Mike Pompeo warned that Washington didn't want to see any IMF lending to Pakistan "go to bail out Chinese bondholders or China itself".

The US has accused China of "debt-trap diplomacy" by lending countries money to pay Chinese companies to build infrastructure that the recipients can't afford.

Pakistan's new government of Prime Minister Imran Khan had suggested it might try to avoid working with the IMF, but the recent turbulence in its stock and currency markets left it no choice, officials said.

Stepped up disclosure on debts, such as those from China, will be a requirement, Lagarde said, adding that was not only going to apply to Pakistan but all countries.

https://www.devdiscourse.com/Articl...-absolute-transparency-of-debts-from-pakistan

 

[republic_roi97]

'Disclose All Chinese Dept if you want a bailout package' - IMF to Pakistan

International Monetary Fund (IMF) Managing Director Christine Lagarde on Thursday said that a bailout deal with Pakistan would require "absolute transparency" of its debts, many of which come from China's landmark Belt and Road Initiative.

"In whatever work we do, we need to have a complete understanding and absolute transparency about the nature, size, terms of the debt that is bearing on a particular country," Lagarde said at the IMF and World Bank Group annual meetings in Bali, Indonesia.

She added the IMF needed to understand the extent of the position of the debt, including lending from sovereign governments and from state-owned enterprises, so that officials could determine a country's debt sustainability, Efe news reported.

Her statements indicated that Pakistan could be forced to disclose the full extent and terms of Chinese lending it received in recent years as part of its participation in the Belt and Road Initiative, China's vast global infrastructure-spending programme.

Earlier this week, Pakistan said that it would be seeking a loan from the IMF. The country has a ballooning trade deficit, falling currency and is quickly exhausting its foreign-exchange reserves. Experts say the country needs about $12 billion to cover its imports and meet upcoming debt payments.

Lagarde said she didn't meet Pakistan's Finance Minister Asad Umar or received a formal request for IMF assistance yet. But she said that the IMF will meet the Pakistani delegation on Thursday and that the IMF was "available to its entire membership".

Pakistan's requirement for an IMF loan has already been complicated by its ties to China. It has been the largest recipient of funding under Beijing's Belt and Road Initiative.

In July, US Secretary of State Mike Pompeo warned that Washington didn't want to see any IMF lending to Pakistan "go to bail out Chinese bondholders or China itself".

The US has accused China of "debt-trap diplomacy" by lending countries money to pay Chinese companies to build infrastructure that the recipients can't afford.

Pakistan's new government of Prime Minister Imran Khan had suggested it might try to avoid working with the IMF, but the recent turbulence in its stock and currency markets left it no choice, officials said.

Stepped up disclosure on debts, such as those from China, will be a requirement, Lagarde said, adding that was not only going to apply to Pakistan but all countries.

https://www.devdiscourse.com/Articl...-absolute-transparency-of-debts-from-pakistan

Lol, now they are in the deepest crap possible. Guys have your popcorns ready next few weeks are going to be entertaining.

 

[kamaal]

China won't allow any disclosure as it will affect its projects in other countries. I doubt IMF will make the info public but USA will use it to target China in other country. So if China is innocent and signed fair deals then its projects are safe otherwise expect some protest in African and Asian countries.

Interesting times ahead.

Better for China to offer a good deal to Pakistan of the order of $ 6 billion to avoid some trouble. It will actually be very crucial for Pak-China friendship. A loan of 0.1% interest rate to Pak, will save China more than Pakistan.

 

[ezsasa]

Pakistan may be in more dire straits than expected. @IIF is predicting Pakistan will require a 3 yr/$15bn @IMFNews loan program—more than the value of the last two IMF loans combined. Let the bargaining begin!

 

[indiatester]

Pakistan may be in more dire straits than expected. @IIF is predicting Pakistan will require a 3 yr/$15bn @IMFNews loan program—more than the value of the last two IMF loans combined. Let the bargaining begin!

Wow. This does not seem to take into account the money they must spend to take care of the water scarcity which is going to hit them in 8 years time.

 

[republic_roi97]

Wow. This does not seem to take into account the money they must spend to take care of the water scarcity which is going to hit them in 8 years time.

That is one hell of a f**k from all directions possible........................

 

[indus]

Time to attack the items Pak exports. Surgical instruments, fruits, textiles, cement are products in which India can give them serious competition. Even India imports some of these products from Pakis. Lets give their exports some halal treatment.

 

[Indx TechStyle]

Surgical instruments

Surgical instruments?
Wow, they produce steel.

 

[indus]

Surgical instruments?
Wow, they produce steel.

Yes. It may be hard to believe but Pakis export lot of surg instruments and implants. Doctors prefer them due to low cost. Wonder why Indian Govt never levies extra duty to make local industry competitive.

 

[Butter Chicken]

Al-Bakistan is headed towards a sovereign default.What happens in that case?
In some TV shows,Baki anchors proudly claim that since Pakistan is a nuclear-armed state of 200 million and the world can't do anything if Bakistan refuses to pay up!

 

[republic_roi97]

Al-Bakistan is headed towards a sovereign default.What happens in that case?
In some TV shows,Baki anchors proudly claim that since Pakistan is a nuclear-armed state of 200 million and the world can't do anything if Bakistan refuses to pay up!

I guess they are not considering the fact that there's something called sanctions, world doesn't have to do anything, just apartfrom following the sanctions lol, and they'd be fcked lol.

 

[Advaidhya Tiwari]

Yes. It may be hard to believe but Pakis export lot of surg instruments and implants. Doctors prefer them due to low cost. Wonder why Indian Govt never levies extra duty to make local industry competitive.

Pakistan does not have good pharma industry. These surgical items could simply be cheap items like knife, scissor, surgical thread, syringe etc which are very old technology. Please check again

 

[indus]

Pakistan does not have good pharma industry. These surgical items could simply be cheap items like knife, scissor, surgical thread, syringe etc which are very old technology. Please check again

Thanks for keeping Dharma out here.
Pharma means medicine manufacturing. Am not talking abt pharma industry. Surgical instruments are the various types of knives and scissors used to perform surgery. They are not cheap items so to say(as you assume). A complete set may cost around a lakh rupees. And yes Pakis export a lot of these to India.
Surgical thread is called suture and again it is not something you can sew clothes with. Some big companies like 3M, J&J , BBraun make good quality surgical sutures. And quite a level of technology goes into it. Previously used to be made with cat or sheep intestine, nowadays made with polymer.
Talking of technology India doesnt make any high technology medical equipment item of a reasonable quality. Americans, Europeans are decades ahead and now Chinese/ Taiwan is catching up in Indian market.

 

[Kshatriya87]

The Chinese debt trap and how Pakistan is falling further into it

New Delhi, Oct 17: Amidst the debt piling up on Pakistan, China has said that there would be more projects planned under the USD 60 billion China-Pakistan Economic Corridor.

Cash-strapped Pakistan has formally approached the International Monetary Fund (IMF) for a bailout package as it reeled under serious economic crisis.

Chinese foreign ministry spokesman, Lu Kang on Tuesday said that there will be more projects under the China-Pakistan Economic Corridor (CPEC), a day after he stated that the CPEC debt liabilities were in low proportion

He also said the China-Pakistan ties will make new headway under the new government.
The entire project is stated to be worth around USD 60 billion.

The Chinese trap:
China has become the biggest lender for Pakistan and it clear from the minister's statements that they fear a debt trap. Pakistan, by 2024 will have to pay back to China 100 billion US dollars of the total investment of 18.5 billion USD which has been invested on account of bank loans in 19 early harvest projects under the CPEC.

Pakistan owes 19 billion USD to China. The CPEC loans add 14 billion USD to Pakistan's total debt, raising it to 90 billion USD by 2019 says a report in the Committee for the Abolition of Illegitimate Debt.

China has become the biggest lender for Pakistan. While the CPEC is aimed at transforming the Pakistan economy, the fact of the matter is that it would come at a very heavy price. It would in the long run go on to make Pakistan a colony of China. It is in this context that Pakistan decided to cut the Silk Road project as the loans from China are piling up.

Debt liabilities:

The figures by the State Bank of Pakistan show that China's bi-lateral debt to Pakistan stood at 7.2 billion USD by June 2017 and this increased by over 3 billion USD in four years. Moreover the currency swaps in Pakistan stood at 1.5 billion USD, which in turn took the figures to 8.7 billion USD.

The Industrial and Commerce Bank of China, Pakistan branch secured a loan of 2.7 billion USD from its parent firm and later swapped it with the Pakistan rupee and this took the debt up to 12.1 billion USD.

A report in the www.cadtm.org says that in addition to this, Pakistan's debt liabilities to direct investors from China stood at around 3.5 billion USD and the biggest investment in the last few years is from China mobile adding to the total amount of 17.1 billion USD.

Pakistan's debt liabilities have risen from 83 billion USD to 88.9 billion USD until December 2017 and the amount has grown further after that.

The report while citing experts says that Pakistan will have to pay back 100 billion USD by 2024 of the total investment of 18.5 billion USD, which China had invested on account of banks loans in 19 early harvest projects most of them relating to the energy sector under CPEC. The interest on these loans will be around 7 per cent per annum payable in 25 to 40 years and this would mean Pakistan would be paying China around 8 billion USD per month starting 2018 for the next 43 years, the report further notes.

 

[Butter Chicken]

Pakistan Punjab heading towards bankruptcy-Punjab FM

 

[Indx TechStyle]

FDI dips 42pc as Chinese investment declines

Following China, United Kingdom contributed $51m, US $25m and Switzerland $39.6m. ─ Reuters/File

KARACHI: Foreign direct investment (FDI) declined by 42 per cent during the first quarter of current fiscal year compared to the same period last year falling short of even half billion mark.

Central bank’s data revealed that FDI during July-September FY19 clocked in at $439.5 million compared to $765m last year. Pakistan desperately requires foreign exchange inflows to cap the rising current account deficit.

The decline in inflows comes at a time when Pakistan’s depleting foreign exchange reserves have already fallen to alarmingly low levels at $14.6 billion including State Bank of Pakistan’s (SBP) $8.089bn providing enough only for two months of import cover.

The government has officially approached the International Monetary Fund to borrow $12bn to meet the growing foreign exchange requirements.

The outflow of portfolio investment also deteriorated the overall foreign private investment in the country which fell by 63pc in first quarter. An outflow of $185m was observed in the foreign portfolio investment (FPI) during the quarter under review compared to $78m in the corresponding quarter last fiscal year.

The overall FPI during the quarter declined by 63pc reaching $254m compared to inflows of $687m in the first quarter of last fiscal year. In tandem with last few quarters, China led the list of countries pouring investment into Pakistan.

The Asian giant made up for 64pc of the total FDI during the quarter contributing $281m. However, in comparison with the same period last fiscal year, China’s investments in the country dipped by 43pc during the period under review.

Following China, United Kingdom contributed $51m, US $25m and Switzerland $39.6m.

The present government has announced its plan to develop investment friendly policies to attract foreign investments while it also ensured to reduce cost of doing business in Pakistan.

 

[Indx TechStyle]

PM Khan to attend investment conference in Saudi Arabia next week

Prime Minister Imran Khan will visit Saudi Arabia to attend FIIC next week. — Photo/File

Prime Minister Imran Khan will visit Saudi Arabia to attend the Future Investment Initiative Conference (FIIC) on the "special invitation of King Salman bin Abdul Aziz", according to a Foreign Office (FO) statement issued on Friday.

The premier is expected to travel to Riyadh on October 23 to participate on the first of the two-day conference. The conference, which will host businessmen and "representatives of hi-tech industry" from around the world, will serve as an "opportunity to interact with important business leaders who are interested in investing in Pakistan", the statement said.

"Prime Minister Imran Khan’s participation in first day of the conference is aimed at projecting Pakistan’s economic and investment potential and the [premier's] vision of the country in the five years to come," the press release read.

PM Khan will also meet King Salman and Crown Prince Mohammed bin Salman during his visit to discuss "matters of mutual interest".

The prime minister's participation in the conference signifies Pakistan's "solidarity with the Kingdom in its efforts to become emerging hub of international business and investment", the press statement said.

This will be PM Khan's second visit to Saudi Arabia since he assumed office.

The FIIC, which comes amid the chaos following Saudi journalist Jamal Khashoggi's disappearance, has been boycotted by United Kingdom, United States and France.