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A question on Pakistan's GDP growth.

The value of a good used to produce another good isn't counted. For example, the value of a bale of fodder given to a cow doesn't count but the value of the milk or meat produced is counted. Because its for end user consumption. The other thing that gets added
Bahins fodder khaati hai?

But btw i doubt the authenticity of above information.
The way you are saying, the raw material etc used in production of something are not counted , if we will do that then so many businesses will not be included in gdp calculations. And basically its too hard to track down stuff in this sense. By ur logic we wont be including some busineses from our supply chain in gdp.
Anyways, someone else cud clarify.
 
I was just wondering what would (almost) 50 billion dollar expected foreign investment do to Pakistan's GDP growth rate in the next decade?

I don't know if anyone answered in details below as the thread has many pages. But I thought I'd give my 2 cents.

On average, within 3 years of the investment (when the benefits are realized, calculating one or many projects' RR initially), you should expect to get a return for about 5-10% back initially, after you broke even and things hot profitability. Over 5-7 years or around the term of the loan / investment maturity, (usually 3,5,7 or 10 years for commercial businesses), you can expect to be making 10-30% annually (depending upon the strategic and operational value of the project, who'll use it and profitability analysis done before investment.

But note that the Chinese aren't lending money to Pakistan in terms of bank loans. They are investing and some of these projects are a result of the strategic partnership. So knowing this, let's review this in details: for example, if they spent $ 20 billion on building the trade highway, what would be the return on investment?

Will you calculate that over $ 20 billion it took the project to be built? Not necessarily as its a strategic need. Even if it returned no value and the Chinese had to built Gawader to support PLAN, they would've still done it, as its very strategic in nature. But this is actually a high impact project so that's even better, serving both, strategic and business purposes.

So on a typical $ 20 billion investment, you would get the required return due to traffic on this highway and trade taxes, tolls, etc, but the actual return could be 1000 times more. In Pakistan's case, the Chinese have been estimating 30% return due to country's expected high growth economically.

But this is where it gets complicated. For example, the trade route was built, it started to get used by both, Pakistani and the Chinese, tolls, traffic and businesses start to use this highway and expand the revenue, directly providing a return as expected.
But the project had long term secondary goals too, it also shortened the oil route, along with distribution of other goods and services from Western China (and vis-a-vis) to the Middle East and Africa by say 2200 KM's, and the trade volume for both China and its own energy Oil, etc, was at say, total of $ 100 billion.

So in addition to the standard return, you should also count the cost you are saving, which may be $ 10 billion over $ 100 or more billion (with Oil and Liquid Natural gas involved, it may be higher as the Western China has about 300+ million population living there).

Now add another dimension, this trade route helped getting products and services in and out of China, resulting in satisfied customers and more orders obviously. So the total trade volume as given above, rose to $ 120 billion from previously $ 100 billion. That entire gap (additional $ 20 billion), is now a direct result of the trade route. So how much is the actual return?

1) Total Investment: $ 20 billion to build the trade route (example numbers, not real)

2) Revenue generated by the trade route in terms of highway and business growth, taxes and tolls: $ 1 - 2 billion first two years of post break even. Then 2-4 billion per year or more.

3) Cost savings by reduced distance to get oil, and ship Chinese products to customers: $ 5 billion+

4) Secondary gains in terms of new annual business, due to quick time to market: $ 10 billion+

5) Strategic value to access the Gawader port to keep the Chinese involved right around the Indian ocean: Priceless

So its fair to say, that per year return long term may be around $ 17-25 billion a year. In fact, more revenue will come if more trade is done through Iran or Central Russian states, Russia, India. The number could look insanely high. But that's the Chinese' plan. They want to have 3 billion consumers connected via a short shipping route, a few days worth of rail or drive, or a few hours worth of airplane ride, so that the Chinese don't really have to depend on the West anymore. If you have half the world connected by road....you can replace MANY customers and can expand quickly and kind of locally.
 
Bahins fodder khaati hai?
nahi bhee khatin tou koi masla nahi. app kaho gee tou kha lain gee.
But btw i doubt the authenticity of above information.
The way you are saying, the raw material etc used in production of something are not counted , if we will do that then so many businesses will not be included in gdp calculations. And basically its too hard to track down stuff in this sense. By ur logic we wont be including some busineses from our supply chain in gdp.
Anyways, someone else cud clarify.
Consider a dress in the market. The value of the cloth, thread and work of the tailor used to make the dress are included in the value of the dress. Why count them twice. Just add the value of the dress to the GDP. No need to add the value of the cloth separately. Its already included in the value of the dress.
 
Considering so far this year Pakistan has just had over $900 million in FDI, I can not see this amount being invested on the ground as a MoU does not translate to real investment.

Chinese whispers - Pakistan - DAWN.COM

Numbers can be obscure and complicated, but sometimes they tell a tale of their own. So, with fair warning, chew on these figures a minute: $5.4 billion, $3.7bn, $2.1bn, $1.6bn, $820 million, $1.4bn, $1.6bn and $710m.
That’s the Foreign Direct Investment in Pakistan for each fiscal year from 2007-08 to the first nine months of 2014-15
 
Zero load shedding will give all the growth that Pakistan needs.

Zero load shedding - that's all that's required.

Everything will simply fall in place.
 
Considering so far this year Pakistan has just had over $900 million in FDI, I can not see this amount being invested on the ground as a MoU does not translate to real investment.

Chinese whispers - Pakistan - DAWN.COM

Numbers can be obscure and complicated, but sometimes they tell a tale of their own. So, with fair warning, chew on these figures a minute: $5.4 billion, $3.7bn, $2.1bn, $1.6bn, $820 million, $1.4bn, $1.6bn and $710m.
That’s the Foreign Direct Investment in Pakistan for each fiscal year from 2007-08 to the first nine months of 2014-15


:yahoo: Well done sir (not really, you need to take high school mathematics if you haven't already. Just like your last sentence says, the 710 Million is the first nine months of 2014-2015. Do you think readers here have no common sense? A fiscal yea, i.e. 2014, ENDS in 2014, or per its assigned schedule. There is no such thing as a Nine month rolling amount across two years. Or, you didn't do a good job in putting two and two together. Plus your foreign direct investment numbers are WAY off!!!!

Also, there would be TWO types of FDI in Pakistan's case. One is the standard one reporting to the World bank, the IMF, etc, etc. The second one comes in from China and other direct channels from investors. In China's case, they use their own Exim bank. Figures for those will NEVER be included in the standard FDI estimated as China invests per its own policies and doesn't really care about the World bank, IMF, etc. So you can't really make these statements without understanding the system.

Here, check out this link, you can also go to IMF or ADB and read up on their forecast. When you decide to write again try to keep some honesty in your posts please.

Pakistan Foreign Direct Investment | 2010-2015 | Data | Chart | Calendar
 
Considering so far this year Pakistan has just had over $900 million in FDI, I can not see this amount being invested on the ground as a MoU does not translate to real investment.

Chinese whispers - Pakistan - DAWN.COM

Numbers can be obscure and complicated, but sometimes they tell a tale of their own. So, with fair warning, chew on these figures a minute: $5.4 billion, $3.7bn, $2.1bn, $1.6bn, $820 million, $1.4bn, $1.6bn and $710m.
That’s the Foreign Direct Investment in Pakistan for each fiscal year from 2007-08 to the first nine months of 2014-15

Funny to see Indians reaction after this visit -->Chinese whispers - Pakistan - DAWN.COM (a personal opinion article in DAWN). Just to satisfy their butt hurt ego. Ahh never mind!
 
I was just wondering what would (almost) 50 billion dollar expected foreign investment do to Pakistan's GDP growth rate in the next decade?

It will be good boost if all these project completed and then we will be about 6 to 6.5 % range. In three years when we have 8000+ cheap electricity then we will be on 5 to 5.5 % range quite easily.
 
It will be good boost if all these project completed and then we will be about 6 to 6.5 % range. In three years when we have 8000+ cheap electricity then we will be on 5 to 5.5 % range quite easily.

Key will be consistently achieving 6% plus for a 20 year period.
 
75% of this Chinese promise is for building coal-fired power plants across Pakistan. in return for gwaddar port
 
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