Pakistan Economy: News & Discussion

indiatester

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https://propakistani.pk/2021/11/01/...risis-after-2-companies-back-out-of-lng-deal/

Govt Trying to Avert Gas Crisis After 2 Companies Back Out of LNG Deal
Posted 18 mins ago by Haroon Hayder
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The federal government is making efforts to avert the countrywide gas crisis that seems almost inevitable after two LNG trading companies backed out from providing cargoes to Pakistan in November.

Speaking in this regard, Federal Energy Minister, Hammad Azhar, said that Pakistan LNG Limited (PLL) had signed agreements with different companies for the supply of 11 LNG cargoes for November. Now, the country will have only 9 LNG cargoes in November as it gears for a severe gas shortage later this month.

However, Singapore-based GUNVOR and Italy-based ENI pulled the plugs on their term agreements with the PLL recently. GUNVOR was set to deliver its LNG cargo between 26-27 November and ENI between 19-20 November.

PLL had signed a 5-year agreement with GUNVOR and a 15-year agreement with ENI for the supply of an LNG cargo every month at a price of 11.5% and 12% of Brent Crude oil respectively.

Last week, GUNVOR and ENI excused PLL from supplying LNG cargoes to Pakistan in November.

This is the first time GUNVOR has defaulted on its agreement with PLL. It claimed that it was facing a system breakdown at the loading port that caused it to back out on supplying term LNG cargo to PLL.

On the other hand, ENI has pulled out of its agreement with PLL for the third time. It first defaulted in January 2021 by providing half of the term cargo. It then failed to supply a term cargo in August and now it has backed out of its term cargo that was due in November.

Although ENI claimed that it was grappling with logistic issues that caused it to back out from supplying an LNG cargo in November, history bears witness that it has always sold the term cargoes meant for PLL in the spot market whenever LNG prices went up in the international market.

PLL is currently in talks with both companies to resolve the issue. In case these two trading companies fail to respect their agreements, PLL can impose a penalty of 30% of the contractual price of one cargo to each trading company.
 

FalconSlayers

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Pakistan has paid a whopping $100m in penalties to Asian Development Bank for its failure in executing various donor-funded projects during last 15 years

Lol, they are imploding slowly and slowly, but somehow they’re very rich according to PeeDF.
 

Concard

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Given their state of the economy, can we expect their military spending to stay below $15 billion for the next 15 years?

The way I see every month they are begging someone for new loans to pay off the old loans. Their external debt is close to $120 billion last I checked. And they have paltry $20 billion in forex reserves. Their exports are very low value added products and they have never crossed more than $30 billion in exports in a year. I am just wondering the impact their economy will have on military spending.
 

FalconSlayers

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𝑻𝒉𝒆 𝑾𝒐𝒍𝒇𝑷𝒂𝒄𝒌🔎 (@TheWolfpackIN) Tweeted:
Britain to give £55 million aid to Pakistan to combat climate change effects.

Kya bhikari hai ye Pakistani
𝑻𝒉𝒆 𝑾𝒐𝒍𝒇𝑷𝒂𝒄𝒌🔎 (@TheWolfpackIN) Tweeted:
Saidi Arabia to give Pakistan 29,000 winter kits (blankets, jackets) as aid.

 

pankaj nema

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Given their state of the economy, can we expect their military spending to stay below $15 billion for the next 15 years?

The way I see every month they are begging someone for new loans to pay off the old loans. Their external debt is close to $120 billion last I checked. And they have paltry $20 billion in forex reserves. Their exports are very low value added products and they have never crossed more than $30 billion in exports in a year. I am just wondering the impact their economy will have on military spending.
External debt of Pakistan has already crossed 125.8 Billion USD as on 30 September 2021

 

avknight1408

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‘Imran Khan is crushing the poor’: anger rises as inflation grips Pakistan

Economic meltdown heaps pressure on Pakistani PM, with record inflation bringing threat of unrest

On Friday night, 27-year-old Asadullah, who sold old shoes on a cart, set himself on fire in the Pakistani city of Karachi.
Ghani, a relative, blamed the state of an economy where rampant inflation is hitting those least able to cope. In comments to local media, he said Asadullah used to get calls from his wife and parents asking him for money, but he could not afford to pay the rent and meet his own expenses and sending money back home was no longer possible.

"We can’t run our homes, that’s why Asadullah committed suicide,” Ghani said. “I know five more people who are fed up with inflation and want to end their lives because of skyrocketing prices. The government should have mercy and decrease the inflation.”
An economic meltdown is putting the Pakistani prime minister, Imran Khan, under immense pressure and bringing the threat of unrest as record inflation – the fourth highest in the world – pushes the price of sugar higher than petrol.
Before coming to power, Khan had vowed to root out corruption and lift people out of poverty as he promised a new and prosperous Pakistan with the creation of 10m jobs. Instead, after a visit to Saudi Arabia last month, he announced $3bn in financial support from Riyadh.

In an address to the nation last week, Khan blamed the opposition for past mistakes and inflation in the international market for the miseries of the people in Pakistan. He also announced a 120bn-rupee relief package providing subsidies on essential food items.
Khurram Hussain, an economic analyst, said it was not enough. “The package is a drop in the ocean and will do little to help the mass of ordinary people. The pressure on Imran Khan will continue to mount because we have seen further price hikes, such as of fuel and sugar, after the announcement of the package.”
He said inflation was imposing a crushing burden on ordinary people because it comes at a time of high unemployment and stagnant wages. Prices of some essential items, such as fuel and electricity, are unprecedentedly high.

The Pakistan Democratic Movement (PDM), an opposition alliance, has announced a campaign against the government of Pakistan Tehreek-e-Insaf (PTI) and the inflation rates the country is witnessing. A long march against inflation was also announced as a part of the campaign from Lahore to Islamabad.
It says ordinary people of the country will struggle to afford basic necessities if prices do not come down.
Two weeks ago, Mohammed Ghufran, 47, a shopkeeper in Mardan, Pakistan’s north-western province, was arrested after he went to a mosque and prayed for cursing the prime minister. Ghufran said he had seen a fall in the number of customers as prices went up. He talked about inflation to daily wage workers, who told him that they could not afford to buy food for their families.

“I rushed to a mosque and announced to the speakers that we should curse Imran Khan,” he told the Guardian. “The prime minister promised a new (Naya) Pakistan and that it would be a welfare state for ordinary people but he has done the opposite. He is crushing the poor.”
Ghufran said he regretted voting for Khan and “everyone I know who voted for him and believed in him” regretted it, too. “People in my neighbourhood supported my calls against Imran Khan after I was released in two days. We believe Imran khan should resign if he can’t control the prices of essential commodities.”
Three years ago, a sack of sugar (50kg) cost about 3,000 rupees (£13) but now it is more than 7,000 rupees (£30). “As he lied to us, I pray God would ask him,” he said.

A government employee, asking to remain anonymous, told the Guardian that the prices of necessary commodities had increased with little increase in income.

The government has failed to control inflation,” he said. “I could run my kitchen for 60,000 rupees (£261) three years ago and now I can’t do it for 90,000 rupees (£393).”
 

JBH22

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Pakistan has paid a whopping $100m in penalties to Asian Development Bank for its failure in executing various donor-funded projects during last 15 years

Lol, they are imploding slowly and slowly, but somehow they’re very rich according to PeeDF.
Highly improbable they will implode.
They will go for a debt waiver imo, approaching IMF and other western back institution, scaring them that terrorist may take their nuclear bombs. Voila Debt waiver on its way.

However, Pakistani are the only one who have invested huge energy in developing close ties with USA and Saudi Arabia. Then fast forward to 2010s they just fuck it up.
 

FalconSlayers

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Highly improbable they will implode.
They will go for a debt waiver imo, approaching IMF and other western back institution, scaring them that terrorist may take their nuclear bombs. Voila Debt waiver on its way.
Implosion is inevitable, the way their economy is heading there will be absolute menace, just check their FDI stats, already piss poor which got Fkd up after their Afghanistan misadventure.

No local industry spurring up, and import getting higher, do you think they’ll have enough dollars? Inflation is going to be sky high and their debt is already risinh day by day. Just wait and watch.

Yes they may not “implode” but ya expect some serious shit.
 

JBH22

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Implosion is inevitable, the way their economy is heading there will be absolute menace, just check their FDI stats, already piss poor which got Fed up after their Afghanistan misadventure.

No local industry spurring up, and import getting higher, do you think they’ll have enough dollars? Inflation is going to be sky high and their debt is already risinh day by day. Just wait and watch.

Yes they may not “implode” but ya expect some serious shit.
Pakistan was never a normal state. It is like the guy who is drug addict and having syphillis.
He comes at you give me money or I spit on your face. So the guy just to continue his way calmly will give that money. With nuclear warheads numbering in 100s coupled with rabid islamist, it will scare many capital.
This leverage will be useful to coerce them to write off their debt or give them some other relief.
As it their demographic pressure will inevitably spill over to Indian side. No water resource, no jobs and with us becoming richer so that will a juicy target.
 

FalconSlayers

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Pakistan was never a normal state. It is like the guy who is drug addict and having syphillis.
He comes at you give me money or I spit on your face. So the guy just to continue his way calmly will give that money. With nuclear warheads numbering in 100s coupled with rabid islamist, it will scare many capital.
This leverage will be useful to coerce them to write off their debt or give them some other relief.
As it their demographic pressure will inevitably spill over to Indian side. No water resource, no jobs and with us becoming richer so that will a juicy target.
Yes, just look at us, PLI scheme, terrific infra construction, multiple economic reforms, increasing FDI, big mega projects, industrial and defence corridors, FTAs with multiple countries, stock market book, booming startups, rising exports and IT industry recording double digit growth, and many more. It’s all going good for us.

While in Pakistan. No one’s setting up production, pathetic infra, stock market is just 17% of their GDP lol, Startups receiving 1/100th the funding we get (and forus it’s just the beginning), they get pathetic level of FDI, literacy rate lowest in Asia after Afghanistan, no innovation, high debt, and high population growth, it all sounds disaster to me.
 

ezsasa

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Yes, just look at us, PLI scheme, terrific infra construction, multiple economic reforms, increasing FDI, big mega projects, industrial and defence corridors, FTAs with multiple countries, stock market book, booming startups, rising exports and IT industry recording double digit growth, and many more. It’s all going good for us.

While in Pakistan. No one’s setting up production, pathetic infra, stock market is just 17% of their GDP lol, Startups receiving 1/100th the funding we get (and forus it’s just the beginning), they get pathetic level of FDI, literacy rate lowest in Asia after Afghanistan, no innovation, high debt, and high population growth, it all sounds disaster to me.
I don't think paki economy will implode, they have informal economy and remittances to keep it floating. due to informal nature of their economy, their numbers are not being recorded for productive purposes, that doesn't mean cash is not circulating. as you said they won't grow because of nature of cash inflow, but they won't collapse either.

Pak economy cannot be compared to today's India, but it can be compared to India's economy immediately after liberalisation, but pak has been stuck in those years for a decade now. on top of it, them idiots have accepted CPEC which was not designed to retain/generate/redistribute cash within their economy.

missing piece is manmohan singh type technocrat on paki side. they don't need a bombastic leader right now, they need someone who can absorb political pressure while taking steps to pull them out of this doldrums.
 

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