Asad Umar’s economic shock therapy — crazy or genius?

[xyxmt]

instead of giving shock therapy to entire body it should have been targeted therapy, just put 200% duty on useless stuff that is imported for elites and if they still want to buy it well and good, govt makes money.

 

[CrazyZ]

instead of giving shock therapy to entire body it should have been targeted therapy, just put 200% duty on useless stuff that is imported for elites and if they still want to buy it well and good, govt makes money.

Problem is the economic model we are on needs to be dumped. Our elites have built a economic system that doesn't work for Pakistan's needs. They were educated in Oxford or some other western university, so they built a system that works in London or NYC. The Anglo- American import led growth model only works if you have a reserve currency. PKR is too weak for this model to work...All our past genius Oxford educated ministers haven't figured this out.

We need to adopt the east asian model....and need to boost exports...replace imports. The State should support indigenous industry's. PKR deval is needed to make Pakistan's labor cheaper than Asean or other S asian countries. It needs to be coupled with development of export oriented economic zones with domestic investment reforms.

Most wealthy Pakistani invest only in real estate....let's tax capital gains for real estate at very high levels...60%. Similar taxes for investment in local industry should be much lower...0%. we need to push investment away from real estate and into industry and infrastructure..Dams.

 

[Kabotar]

 

[nahtanbob]

well this actually my field being a auto part manufacturer for almost 22 years and working with Honda i have a little insight here,
truly speaking oem's did try very hard to improve the products and introduced new models every now and then but utterly failed because of non interest by the customers, even recently Honda launched 3 new models in the motorbike industry but same results. its not that the RND was not good or there was no innovation every thing was perfect technological and aesthetically but market response was poor, i mean the production is just 600 units against the demand of 400 unit from all over Pakistan, and its developed locally there is a common miss conception about local development bieng in the industry i know for sure that every model has to be localized 80% within 6 months of launch and we as an industry work our *** of to meet this target a lot of investment involved on both oem's and vendor's end but the end result is that customer wants the old model our local market does not accept any innovation.
do you that one manufacturer even launched electric bike investing millions on that project it was really good product could travel 50 km on a single charge carrying 120 load at speed of 60 km per hours (tested and proven)
but our market responded so poorly that they had to shut down the project altogether.

please do tell us what more can we do here................

the truth is pakistan is a small market (i know there are 200 million+ population)
without trade with India, Iran and Afghanistan pakistan is not going anywhere
that is not going to change anytime soon

Problem is the economic model we are on needs to be dumped. Our elites have built a economic system that doesn't work for Pakistan's needs. They were educated in Oxford or some other western university, so they built a system that works in London or NYC. The Anglo- American import led growth model only works if you have a reserve currency. PKR is too weak for this model to work...All our past genius Oxford educated ministers haven't figured this out.

We need to adopt the east asian model....and need to boost exports...replace imports. The State should support indigenous industry's. PKR deval is needed to make Pakistan's labor cheaper than Asean or other S asian countries. It needs to be coupled with development of export oriented economic zones with domestic investment reforms.

Most wealthy Pakistani invest only in real estate....let's tax capital gains for real estate at very high levels...60%. Similar taxes for investment in local industry should be much lower...0%. we need to push investment away from real estate and into industry and infrastructure..Dams.

boost exports ?? Which products ?? Which countries ??

 

[CrazyZ]

the truth is pakistan is a small market (i know there are 200 million+ population)
without trade with India, Iran and Afghanistan pakistan is not going anywhere
that is not going to change anytime soon



boost exports ?? Which products ?? Which countries ??

Simplest products would be agricultural commodities, garments, leather goods, sports equipment. All the big markets. China, EU, USA, Japan, GCC, Russia/CIS...etc

India+iran+Afghanistan consumer market is about the size of UK. Not a big deal.

Pakistan's consumer market is about 250 bill. Bigger than UAE.

 

[nahtanbob]

Simplest products would be agricultural commodities, garments, leather goods, sports equipment. All the big markets. China, EU, USA, Japan, GCC, Russia/CIS...etc

India+iran+Afghanistan consumer market is about the size of UK. Not a big deal.

Pakistan's consumer market is about 250 bill. Bigger than UAE.

you are assuming someone is not supplying those markets already

the market for those motorbikes in UK is non-existent. it does exist in India+iran+Afghanistan. you have a competitive advantage in proximity to those markets

 

[CrazyZ]

you are assuming someone is not supplying those markets already

the market for those motorbikes in UK is non-existent. it does exist in India+iran+Afghanistan. you have a competitive advantage in proximity to those markets

Maybe so. But political situation hampers trade with in India and Afghanistan.

Iran trade is looking on the up and up. I expect much smuggling given the situation on either side.

 

[nahtanbob]

Maybe so. But political situation hampers trade with in India and Afghanistan.

Iran trade is looking on the up and up. I expect much smuggling given the situation on either side.

I am not solely blaming Pakistan for the low volume of the trade. it takes two to tango

 

[American Pakistani]

local vehicles are crap compared to the ones being imported in similar price range, until the automotive industry is regulated and audited, they will continue to rip off the people.
Another major import is the electronics, everyone wants a cell phone, laptop, etc. but no one is willing to even assemble these things in Pakistan, again the govt must change its policies so that huawei etc. may at least set up assembling plants with SMT, and pcb fabrication facilities.
agree with other stuff about textiles, dairy and agricultural produce though.


peer to peer downloads cost no money.

That the problem, sirjee. Nobody want to leave their luxury so how will the country benefit?

I"m sure some people will have argument for textile, dairy and agri products too.

 

[xyxmt]

Most wealthy Pakistani invest only in real estate....let's tax capital gains for real estate at very high levels...60%. Similar taxes for investment in local industry should be much lower...0%. we need to push investment away from real estate and into industry and infrastructure..Dams.

problem is no documentation of any business activity in Pakistan, that is the problem with FBR that they have no information about individuals and or business, who is buying what and selling what .... Pakistani tax system is as good as bhatha system those who are caught doing business are squeezed to death.

 

[shah_123]

Because importing stuff is cheaper due to unrealistic overvalued rupee

Because cost of production of producing these goods are high and this stupid govt ain't helping either ----

That the problem, sirjee. Nobody want to leave their luxury so how will the country benefit?

I"m sure some people will have argument for textile, dairy and agri products too.

Govt facilitates to import luxuries like cars by removing taxes ( like they did for 1700cc and above)

Regarding Agriculture, it's simple, if there ain't any profit, farmers will not grow that particular crop. --- don't worry, if the present trend continues, the farmers will even give up growing wheat.

 

[Crusher]

Regarding Agriculture, it's simple, if there ain't any profit, farmers will not grow that particular crop. --- don't worry, if the present trend continues, the farmers will even give up growing wheat.

That is why farmer's must be financially protected, every country protects their farming sector including the developed ones.

instead of giving shock therapy to entire body it should have been targeted therapy, just put 200% duty on useless stuff that is imported for elites and if they still want to buy it well and good, govt makes money.

Best comment on this thread so far.