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How to wreck an economy

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Horus said:
The economy was wrecked by Noon League and Zardari. You can't blame it on a Govt that's barely a few months old. DAWN & Ummat quoted are Noon and Jamati propaganda outlets respectively so no surprise there.
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When you take over something, you assume responsibility for all its happenings after you have assumed power. It is the most lamest excuse in history that 'Oh, it's not because of me, we have simply inherited it!', a child's excuse, sounds like someone from a junior class would make, that's the kind of excuse incompetent people make. Quit crying about what you have inherited, and freaking fix it, because that's what you promised and why you have been elected to power, your endless blame game is not helping fix it, otherwise resign if you can't handle it!

Ocelot said:
Short term problems. Pakistan will overcome them in a couple of years. This backlash was expected since Pakistanis are mentally weak people and can't sacrifice a bit.
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How is the decrease of GDP, GDP growth, loss of thousands of jobs, and many issues to businesses, no protection of third party investors, decline of FDI, no sign of ease for businesses to run business in Pakistan, only a short term problem?
 
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Alternatiiv said:
How is the decrease of GDP, GDP growth, loss of thousands of jobs, and many issues to businesses, no protection of third party investors, decline of FDI, no sign of ease for businesses to run business in Pakistan, only a short term problem?
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O bhai when you are gifted an unprecedented $18 billion Current account deficit, balance of payment crises, 6.6% of GDP fiscal deficit, over a trillion rupees of circular debt, every SOE bleeding, dysfunctional institutions, this is bound to happen.
 
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Turingsage said:
Blinding the public is hardly patriotism, it is the exact opposite, it is treachery of the highest order.

"Pakistanis" on PDF all living in the West do not face any privations that the actual people living in Pakistan are being subjected to on a daily basis. They can sit in comfort and cheer the PTI as it drags Pakistan into decades of darkness,. Policies conceived now will have repercussions down the years.

PTI loons promised devaluation will result in expanded exports. The truth is different


Fall in exports worrying: Charter of economy – the way forward
By JUNAID ZAHID
Published: December 31, 2018
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1877885-sezlreuters-1546229262-668-640x480.jpg

PHOTO: REUTERS

ISLAMABAD: The charter of economy, in simple words, is national consensus on the core economic agenda in an attempt to develop a far-reaching framework for economic reforms in the country.

The charter should not only be confined to the views of chambers of commerce, it should also incorporate the voice of other important players such as farmers, labourers, technologists and those involved in capital formation.

A list of key regulatory bodies should be drawn up and provided a guarantee that they will be made strong, autonomous and free from political intervention.

Economic priorities may differ from party to party. However, a minimum consensus should be developed in the areas of energy, taxation, water resources, environment, domestic savings, social protection and labour. There should, at least, be consensus to reform and privatise public-sector enterprises.

The China-Pakistan Economic Corridor (CPEC) is critical for Pakistan’s growth and development. All parties should agree on a mini-charter of CPEC in terms of what it entails and how it should be implemented.

Two major indictors of Pakistan’s economy nowadays are government debt and exports. There is a dire need for developing the charter of economy because government debt is increasing with the passage of time and exports are not growing which are critical for strengthening the economy. In the past five years, it has been noted that Pakistan is sinking deep into a debt trap and has not been able to strengthen industries to step up exports.

Exports of Pakistan decreased to Rs246,015 million in November 2018 from Rs248,128 million in October 2018. Exports averaged Rs43,891.75 million from 1957 to 2018, reaching an all-time high of Rs275,483 million in September 2013 and a record low of Rs51 million in April 1958.

According to Bloomberg, “Pakistan’s dollar reserves are depleting at the fastest pace in Asia and may soon have a buffer that’s smaller than Cambodia – an economy that’s less than a 10th of its size.”

Now, in order to increase exports and ease economic pressure, all political parties need to bring in ideas, discuss them and build consensus for implementing them in the short and long run.

Declining exports to the United Arab Emirates, Saudi Arabia, Iran and Turkey, despite having good political relations, are quite worrying. Pakistan needs to revive economic diplomacy in foreign relations. The role and effectiveness of commercial counsellors in improving relations with trading partners is extremely important. For regional cooperation and trade, the strengthening of institutions is a must.

Pakistan adopted a private sector-oriented strategy somewhat earlier than other economies in the region but has not been able to expand exports compared to other economies in the region. Though the contribution of private-sector enterprises is increasing significantly, there is an urgent need to assist private entrepreneurs – who are dynamic, open to innovation and have managerial capabilities – by providing a favourable business environment with good governance, appropriate institutional and financial support mechanisms, an adequate legal and support framework and other physical and social infrastructure.

Government’s role should be confined to legislation, policy development, regulation, capacity building and facilitation with the objective of increasing productivity in all export-focused sectors. The private sector should take the lead in making investment and value chain development on its own.

Pakistan may begin by creating a competitive environment in the labour-intensive production of goods and then gradually progress to more skills and technology-intensive activities. In order to increase exports, first there is a need to increase the production of goods and services in all sectors in general and in exportable sectors in particular.

There is a need to devise policies and strategies to increase production through capacity utilisation, capacity expansion and productivity growth. For capacity expansion, Pakistan needs to diversify the production base in favour of goods and services with comparative advantage, global demand and growth potential. Some of these industries are electronics and telecommunication equipment, automotive parts, biological pharmaceuticals, renewable energy, petrochemicals and aerospace.

Furthermore, as Pakistan’s auto industry is beginning to look efficient, other downstream and upstream industries should be established. Within the textile sector, the production of clothing and value-added products should be expanded.

Finally, productivity growth will come automatically from investment in human capital and promoting innovation.

The writer is a researcher at the Sustainable Development Policy Institute

https://tribune.com.pk/story/1877885/2-fall-exports-worrying-charter-economy-way-forward/
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You are not pakistani, so I wont even waste my time reading that. It's not your problem no is it obsessed, person?

Champion_Usmani said:
View attachment 529903

https://twitter.com/x/status/1079287947399217152

https://twitter.com/x/status/1079666717398315008
کیا یہ حکومت نااہل ہے؟یا پاکستانی صنعت سازش کے تحت تباہ کی جا رہی ہے؟اخبارات میں چپھی اس اپیل کے مطابق عمران نیازی کے اقتدار میں آنے کے بعد. ٹریکٹر، کاروں، بس/ٹرک اور موٹر سائیکل کی پیداوار میں بالترتیب ٦٥%، ٣٥%، ٣٠% اور ٣٠% کمی اور ١٢٠٠٠ افراد نوکریوں سے ہاتھ دھو بیٹھے ہیں-

View attachment 529911
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You are shameless
 
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Ocelot said:
O bhai when you are gifted an unprecedented $18 billion Current account deficit, balance of payment crises, 6.6% of GDP fiscal deficit, over a trillion rupees of circular debt, every SOE bleeding, dysfunctional institutions, this is bound to happen.
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But why is such an effect seen only as soon as PTI Govt. came into power? Wouldn't the repercussions be seen before they came into power as well? It's not like all the debt was accumulated within a month, right?
 
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Champion_Usmani said:
S. Akbar ZaidiUpdated December 31, 2018

LESS than two years ago, Pakistan’s economy was being celebrated for being dynamic, resilient, and on a path to high, sustainable, growth. Numerous international journals and newspapers — always critical of Pakistan’s economic management and governance — were waxing lyrical about the prospects for Pakistan’s economy after almost a decade of struggling.

The last fiscal year, which ended in June 2018, saw Pakistan’s highest GDP growth in 13 years. Moreover, from 2013 to 2018, the growth rate increased every year, a phenomenon not seen in Pakistan for quite some time; other than the fake ‘boom’ under Gen Musharraf, which was based on, and further resulted in, gross irrational speculation in real estate and stock market prices. The Musharraf bubble in all its manifestations — cultural, economic, political — eventually broke to reveal its false foundations.

Today, the story is very different. The expected growth rate for the current fiscal year has been lowered to near three per cent, the lowest in nine years, and is expected to be lower still in the subsequent two years. Inflation has started rising again, to levels not seen for the last five years, and the rupee is worth a third less in the international market compared to what it was just a year or so ago. With lower development expenditure and lower projections for manufacturing growth, all accounts suggest that Pakistan’s economy is facing a serious crisis. However, this crisis has not been caused as much by fundamentals, as by complacency, incompetence, and utter mismanagement by the incumbent government.

The PTI government inherited an economy with the highest growth rate in 13 years, albeit strains were more than evident, especially regarding the current account and fiscal deficits. The rupee had been linked to a former finance minister’s irrational ego for far too long, and would have had to give at some point. Moreover, it was also fairly clear that if the previous government of the PML-N was re-elected, it would most certainly have gone to the IMF within days of taking office.

Read more: Why Pakistan will go to the IMF again, and again and again

This was also expected from the party which eventually won, despite their public bravado of claims to the contrary. Whatever views any economist held about the Fund, it was clear that Pakistan was on the verge of yet another IMF programme.

This so-called crisis which has taken place affecting Pakistan’s economy rests unambiguously on the shoulders of the finance and economic team managing the economy since August 2018, and especially on Pakistan’s finance minister. Decisions needed to be made immediately after taking office and a direction to addressing real and perceived, as well as potential problems, needed to be developed urgently. All that one has seen since the PTI government took over is a failure to understand how Pakistan’s economy works, what the key issues and problems are, and how they are to be addressed.

The hallmark of PTI’s economic programme in the last five months has been continued uncertainty and ambiguity. As anyone familiar with understanding how economies work would know, the core of all ills regarding economic planning and thinking is a government which has no clue about what to do about the economy, and hence, its chronic uncertainty.

The PTI economic team reflects such sentiments better than most governments in Pakistan’s recent history. Even if one disagrees with the politics of a particular political party, governments in the past have always put in a plan about what they want to do with the economy. Not all plans have worked, but market sentiment and investors have had some guidelines about what to expect in terms of direction, management and policy. Since last August, this has clearly not been the case as reflected in all markers of investor sentiment and confidence. Even international agencies have had to downgrade Pakistan’s economy’s ratings on how the economy has been managed.

Other than asking its three ‘friendly’ countries for desperate loans and deposits, there seems to be no policy, leave alone a vision, regarding Pakistan’s economy. Although the government celebrates a handful of dollars deposited with the State Bank of Pakistan by two countries, this is akin to giving someone who is completely broke and destitute and insolvent some money for safekeeping, so that they can try and look good, but are in no position to spend or use that money since it needs to be paid back and, that too, with interest.

Pakistan’s accounting books might look good for a few months because of money loaned to it, but these sums will need to be paid back. A loan is not a grant. And claiming that there are no conditions attached — whether political or military — to these loans, is naiveté of the highest order, a point raised by a senior member of Pakistan’s Senate.

Furthermore, while aggressive selective accountability against some political opponents might bring some cheer from the PTI faithful, this is bound to have negative consequences on economic activity in the short run with potential investors far more circumspect.

By saying that we may go to the IMF, or that we may not, or that we no longer need the IMF, the finance minister is stoking the already raging fires of uncertainty regarding Pakistan’s economy. He is fully entitled to opt out of an IMF straitjacket but needs to present a viable option of how he is going to address the growing strains in the economy. His double- or triple-speak, is clearly a reflection of his confusion and inability to find alternatives to bridge the foreign finance gap. The more he procrastinates, the more the damage done. And if by chance, he has found a magic wand which will rescue Pakistan from an inhospitable IMF programme, the sooner he waves it to end this uncertainty, the better.

The writer is a Karachi-based political economist.

Published in Dawn, December 31st, 2018

https://www.dawn.com/news/1454624

@Maarkhoor @CIS-TRANS @Canuck786 @BATMAN @Jinn Baba @SmartGeek @Tameem @Kabira @Proudpakistaniguy @Azadkashmir @volatile @Major Sam @Umair Nawaz
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what the ****!

https://www.thenews.com.pk/print/413356-the-economy-in-2019

Can a fake Aristotle answer this
the last financial year alone, RS 1300 billion of government spending was financed by printing money and monetization of public debt. The previous government was also happy to ask FBR to withhold genuine refunds to the tune of hundreds of billions of Rupees of businessmen and entrepreneurs that further squeezed their working capital and halted all their expansions. This whole model broadly represented the previous government’s fiscal policy and it’s no surprise that it fuelled only consumption growth. And it also led to whopping RS 2300 billion or 6.6 % of fiscal deficit in the system i.e. the excess of government spending over government’s income

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I can achieve 10% growth if i borrow 30b$ without increase in productivity ..but will happen in couple of years down the line...
This..what we begin to saw from December 2017 to August 2018...
nawaz sharif two legacies of 1998 and 2018 are bankrupting Pakistan each led to 100% and 35% devaluation in 1998 and 2018.
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Paying an expert to drawm a rosy picture by selective figures an easy job..but still thwy cant fudge the figures of investment, CAD, DROP IN EXPORTS, FISCAL DEFICIT.
 
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Whatever has lead to the present situation is now the present government's responsibility to fix. Blaming the past or someone else will not do anything at all.
 
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Alternatiiv said:
But why is such an effect seen only as soon as PTI Govt. came into power? Wouldn't the repercussions be seen before they came into power as well? It's not like all the debt was accumulated within a month, right?
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this happened in 2016-2018 period as soon as Pakistan left IMF to artificially jack up growth from 3-4% to 5%
So it takes time to show effect..govt was able to band aid it from 2016-2017 with whopping foreign loans but once banks refuse to lend we saw massive devaluation in 2017-2018 (even before PTI govt came in) and massive drop in reserves

Issue is not debt accumulation but banks refusing to lend any more..we didnt accumulate in month ...pakistan CAD was 12 b in 2017 but we filled that up in loans , in 2018 we paid by loans plus half by our reserves as later part banks refuse to lend and dropped our credit rating.
 
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