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A Question on Darnomics

Jango

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When PML-N govt took power in 2013, oil was trading around USD110/bbl. By the middle of their tenure i.e. by mid 2016, oil prices had crashed to around USD30/bbl.

Why is this important?

Because solve energy problems and you get Pak out of clutches of IMF/CIA backed mafias.

Pakistan's export plus remittance = imports minus energy imports i.e. energy accounts for the biggest component of Pak foreign exchange spending. So in effect, PML-N government was beneficiary of probably the biggest financial windfall in the history of Pakistan

This point needs to be repeated again and again.

You can give some leeway to PPP, they had to deal with the financial crisis, floods in 2010, ATH oil prices. N was given everything on a platter and a whole lot of breathing room with low oil prices, cheap logistic chains and much more, and what did Dar do with that? Horseshit.

Even PTI had a tougher time with COVID and supply chain issues.
 

SoulSpokesman

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@nahtanbob

If your last graph is true why is Pakistan even in a financial crisis or balance of payment crisis ? Something does not add up

Even the high level of textile exports cant cover for Pak's large import bills.

Regards
 

nahtanbob

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Sep 24, 2018
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@nahtanbob

If your last graph is true why is Pakistan even in a financial crisis or balance of payment crisis ? Something does not add up

Even the high level of textile exports cant cover for Pak's large import bills.

Regards

Mr. RiazHaq is our esteemed resident statistician. But there are lies, damn lies and there is statistics. I will let you figure out the rest.
 

Shabi1

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This post has been triggered by the impending return of Ishaq Dar, fondly known as Dollar Dar, as the Pak FM. A common accusation against him has been that he kept the PKR artificially high which has been partly the cause of the current mess. However, there are a few things that don't make sense to me.


If we see the Chart in the link above (Click on 10 years trend) we see that the forex reserves actually increased from around USD 8 bn in 2013 to around USD 15 bn in 2018. Why would forex reserves increase if the PKR was overvalued.


Then again if we look at the debt levels, while debt increased from USD 62 bn to USD 90 bn, a large chunk of this would be capex debt (mainly for CPEC), so it is unlikely that the reserves would be bolstered too much by working capital debt. But here again as we go forward from 2018 we see that the debt kept mounting from USD 90 bn in 2018 to around USD 110 bn plus by mid 2021 (i.e. even before the sharp upward movement of crude gained momentum).

The data appears a bit puzzling. Maybe some of the learned Maulaners here- @RiazHaq @waz @Jango @VCheng @Joe Shearer @Wood @maithil - can explain this conundrum

Regards
Mr Dar took loans to boost forex (others have done this too) but then he kept pumping dollars into the market to keep PKR artificially undervalued (this is darnomics), this was unnecessary borrowing, that started a chain reaction of borrowing to pay back old loans. Misreported figures to IMF for which Pakistan was fined. Under him PMLN was able to make some very expensive PR infra projects which were possible because the finance minister allowed expenses beyond that were sustainable. There were no efforts to curtail expenses so incoming governments were left with deficits to pay for loans that were unplanned.

Basically spent more than he should have in less return projects, fudged development matrices and facilitated the banking practices which led to Pakistan getting grey listed in FATF.

He is a smart man but problem is seems haven't learnt lessons yet, no amount of economic gimmickry can improve the economy till there is political stability to boost business confidence that will only happen when elections brings a leadership with strong mandate.
 
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ghazi52

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Ali Changezi
If it was China or any other developed country, this clown would have been hanged to death since long. The arrival of this clown on a dedicated plane for PM is a slap on the faces of judiciary and executive. RIP Pakistan courts and security agencies.
 

Joe Shearer

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This post has been triggered by the impending return of Ishaq Dar, fondly known as Dollar Dar, as the Pak FM. A common accusation against him has been that he kept the PKR artificially high which has been partly the cause of the current mess. However, there are a few things that don't make sense to me.


If we see the Chart in the link above (Click on 10 years trend) we see that the forex reserves actually increased from around USD 8 bn in 2013 to around USD 15 bn in 2018. Why would forex reserves increase if the PKR was overvalued.


Then again if we look at the debt levels, while debt increased from USD 62 bn to USD 90 bn, a large chunk of this would be capex debt (mainly for CPEC), so it is unlikely that the reserves would be bolstered too much by working capital debt. But here again as we go forward from 2018 we see that the debt kept mounting from USD 90 bn in 2018 to around USD 110 bn plus by mid 2021 (i.e. even before the sharp upward movement of crude gained momentum).

The data appears a bit puzzling. Maybe some of the learned Maulaners here- @RiazHaq @waz @Jango @VCheng @Joe Shearer @Wood @maithil - can explain this conundrum

Regards
We have been through all this on insaniyat; is there anything left unsaid?
 

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