Is Pakistan facing bankruptcy?

[opinion786]

=maqsad;203999]This is a direct result of the lunatic policies of bhangeeconomics that Shopper Aziz supervised in Pakistan:

First of all, the crap allegations you pasted below are NOT supported by ANY figures. It has rendered your post into a meaningless bias indicating clueless conclusions. NO FIGURES !!!

Telecom: He made sure useless junk like cellphones and cellphone support infrastructure was imported at the cost of billions per year in forex paid by the pakistani consumer.

Oh yeah? How much BILLIONS per year? Do you have any calculations?

In 2006-07, Import Bill went to Oil & Petroleum products and secondly Machinery. Cell phone imports were DOWN by 7.61%.
Daily Times - Leading News Resource of Pakistan

In 2007-08, Import Bill: Petroleum products were $6.158 billion, Agriculture $5.83 billion, Machinery $4.02 billion, Metals $2.54 billion, Textile $2.35 billion, Transport $2.25 billion, Telecom sector $2.2 billion (including mobiles phones), Palm Oil $1.6 billion, Plastic materials $1.3 billion, Power Generation machinery $1.18 billion , etc.
Oil import bill surges by 55pc to $11.38 billion -DAWN - Top Stories; July 18, 2008

You can see the negligible amount that was spend on Telecom sector. You were able to achieve approximate $1.5 billion IT EXPORT due to import of IT sector.

On top of that he sold off the pakistani cell and telecom market to foreigners so that even the profits obtained domestically were shipped out eventually.

Get your facts correct!

Out of 1,215 IT & Telecom companies registered with PSEB, ONLY 60 are Foreign Telecom & IT companies. Only 4.9% foreigners!

The net result of this "eight year plan" under Shortcut Aziz's watch is that at first it will be financed by itself as foreign investors buy up shares in the market...but after the INCOMING INVESTMENT stops(because everything that isn't nailed down has already been sold off for pennies on the dollar and nothing more can be sold) then the OUTGOING DIVESTMENT starts.

Every country in the world attracts foreign investment. Foreign investment stops coming where there is lack of trust or your credit ratings go down. Yesterday, we were de-rated into negative category by S&P and Moodys. With Mr.10% as President … there’s nothing to trust!

Secondly, Shaukat Aziz increased our Revenue Generation from Rs.300 billion to Rs.800 billion ($13 billion). His policies raised our Exports from $8 billion to $18.5 billion.

This is like on a roller coaster when you go as high as you can go and then the only way to go is down like a fallingggg rockkkkkkk...

Sure, its like a roller coaster.... bring in democratic crooks & murderers & lunatics .... and you go down like a falling planetttttt .....

Shopper Aziz and Agent Mushy got off the roller coaster just before the fall that they orchestrated. And they handed over control to a blackmailable, brain damaged retard that they pulled out of prison whose only financial skills are knowing how to use the percent button on his calculator.

The 10 million PUBLIC VOTES gave this retard the privilege to press the %% button on his calculator. Democratic votes ushers in democracy!

Automobiles:Agent Mushy and Shopper Aziz were confronted with an economy which was a heavy net importer of Automobiles like all underdeveloped nations.

Wrong! Import of automobiles DECREASED!

Transport import DECLINED by 12.59% in 2006-07.
Daily Times - Leading News Resource of Pakistan

Each year billions of dollars in forex were spent to import vehicles and very little was manufactured or assembled in Pakistan. There was a golden opportunity in 1999 to fix the economy by incubating a domestic automobile manufacturing industry.

Wrong as usual!

Number of vehicles produced INCREASED was as follows:


2001-02 ------ 2006-07
Cars ----- 40,601 ----- 176,016
Jeeps ----- - ----- 3,298
Light Vehicles ---- 8,491 ----- 19,672
Trucks ----- 1,141 ----- 4,410
Tractors ----- 24,331 ----- 54,610
Motor cycles ----- 133,334 ----- 839,224

It looks above 100% to 500% improvement in manufacturing & assembling.
Statistics available on Board of Investment Pakistan website.

Pakistan Steel Mills also. I guess the plan was to also sell this off to foreigners for pennies on the dollar to finance the crazy insane consumer-oriented unbalanced economy that Shopper Aziz created--but somehow by some miracle the steel Mills Were saved by Judge Iftekhar Chaudry in one of the few acts of patriotism in pakistan's top leadership.

Again figure-less assertions?

Steels Mills worth - official stated figure calculated in 30-6-99 (not in Musharraf era) amounted to $0.294 billion (Rs.17.64 bn). www.edb.gov.pk/Corporations/STEEL/Pak Steel.pdf

Steels Mills worth (including Land) in 2005 (before offering for privatization) was $349 million.
http://www.privatisation.gov.pk/industry/PDF File/PSMC Summary Info - 27-09-05.pdf

Saudi group offers $362 million for buying. Khaleej Times Online - Saudi group pays $362 million for PSMC

So we were selling the Steels Mills in Profit ! A Steels Mills that in 1999 had loan of Rs.19.11 bn, which is being RE-PAID under Musharraf era and now only Rs. 4 billion left.
www.edb.gov.pk/Corporations/STEEL/Pak Steel.pdf

Energy: Well what can I say. If Kalabagh damn or Basha damn or both had been built then firstly there would be no brownouts

First of all, thank the military dictators who gave you Tarbela Dam and Mangla Dam!

Musharraf also increased capacity by 4,600 MW!

In 1999 our installed capacity was merely 15,860 MW. (With Hydel 4826 + Thermal 10,897 + Nuclear 137)

In 2005-06 our installed capacity increased to become 20,495 MW. (With Hydel 6499 + Thermal 13,534 + Nuclear 462) http://www.statpak.gov.pk/depts/fbs/publications/cee/census_electricity_2005-06.pdf

For detailed efforts of government see: Electricity: Solutions and Ongoing Projects Our leader - Musharraf

So in case anyone has been fooled into thinking that the economy was strong when it was handed over to the PPP/PML and it is their stupidity that is causing the forex bleeding you should ask yourself, if it was so super strong then how could it start burning up so quickly in just 6 months?

Do you know that $29 billion market capitalization is OUT of KSE alone? KSE worth was $75 billion under Shaukat Aziz and now its $46 billion. What were the efforts/competency to stop this drainage of investment?

Ask yourself, why did State Bank place a BAN to transfer/shift dollars OUTSIDE Pakistan? As investors DO NOT trust the current government! Bring back Musharraf and the investment will come BACK to Pakistan!

The answer is simple....for the last 8 years the economy had been built on lies, selling out to foreigners, consumerism, suppression of industrialization, suppression of indigenous energy development, selling out of financial institutions of foreigners?

Were these international institutions FOOLS as you suggest, when they praised Pakistan’s macro-economic reforms? Were they BLIND fooled by lies when they record statistics of 180 countries of the world?


IMF, WB praise Pakistan's economic and fiscal performance: Pakistan Times | Top Stories: IMF, WB praise Pakistan's economic and fiscal performance

PAK Economic growth has bolstered int’l confidence: WB
Daily Times - Leading News Resource of Pakistan

World Bank President praises Pakistan's recent economic achievements
World Bank President praises Pakistan's recent economic achievements.

IMF praise for Pakistan
BBC NEWS | Business | IMF praise for Pakistan

ADB praises micro-finance in Pakistan
Daily Times - Leading News Resource of Pakistan


Your post had NOTHING substantial and pure allegations indicating a pessimistic (half glass empty) perception. I replied ONLY as I admire Musharraf's accomplishment and let people judge with facts!

 

[maqsad]

The mood is to let Pakistan default so these idiots in government feel the pain and get off their ***** and do something. Bail out will again allow these idiots to waste the funding and take it easy.

Excellent! I hope the reserves go down to zero and for once in the 61 year history of Pakistan people actually start talking about the economy and realize that bhangeeconomics is what kept Pakistan back instead of skyrocketing to prosperity like South Korea did(once it was actually a smaller economy than Pakistan's). I hope that terror grips all of Pakistan, especially the educated middle class and they realize what every govt of Pakistan has been doing--especially Shopper Aziz who over-inflated the CONSUMER/IMPORT economy while Short Circuiting the PRODUCER/EXPORT economy. He turned Pakistan into a soon to be bankrupt shop-a-holic economy which can only be rescued by loans and bheek rather than standing on its feet and PRODUCING and EXPORTING equal or more than what it CONSUMES AND IMPORTS.

 

[maqsad]

Actualy we had never thought of putting our economy on track to self-sustained growth.

We had been and still we go all dancing over the temporary bubbling of our economy.
The temporary bubble is the cause of such kind of balance of payment crisis.

I would not call it bankcruptcy but balance of payment crisis.
I remember once i was talking to my Indian friend and we were discussing the same crisis which had gripped India in 1991 when it had only 30 billion dollars left with.
But then India had taken some strong and solid measures which had helped her.

But alas i am sad to think that our current government of Zardari is still looking for the same shortsighted policy to overcome this crisis.

(i am not well versed with economy things so if i am wrong in above post my appology for that )

Of course it is a balance of payments crisis, this is exactly what it is when you look at the forex burning up. This can easily be understood if you divide the pakistani economy from the rest of the world's economy. Pakistan cannot PAY outsiders for everything it BUYS because it SELLS less than it BUYS. If you SELL a lot less than you BUY then you go in DEBT because you need LOANS and BHEEK to pay for what you BUY from others because you cannot PRODUCE enough of what they want. This entire disaster is because of EXPORTS being less than IMPORTS and that has been the #1 problem of the Pakistan economy since 1947 and nobody has fixed it properly yet! If you look at what I wrote about Telecom, Automobiles and ENERGY which are huuuuuuge sectors of the economy then it becomes clear why we have this crisis today. It is because of the mismanagement of these three huuuge industries that the forex crisis is here today--mainly because of oil prices skyrocketing of course.

But besides the forex crisis which is a balance of payments crisis there is also other problems, mainly that bhangeeconomics has prevented the rapid industrialization of Pakistan because people keep importing hi tech goods instead of creating an environment where high tech manufacturing and high value added products are produced in pakistan. This makes it much much harder to export hi tech hi value products to the rest of the world to help in export earnings.

So you are actually partially agreeing with me but pretending to disagree with me by stealing my points? Wow special journalist trick?

 

[opinion786]

Last few years Pakistan was growing at a very fast pace but the government (Musharraf) spent very little money in improving the productivity of the country, buying technology, building power plants or educating it`s people. Instead they chose to spend money on defense. It`s arguable that spending so much money on military is good or bad but I need it amazing with 10% GDP compared to India, Pakistan was able to spend so much money on military. .

Musharraf increased our education spending to 4% of GDP and our literacy rate INCEASED from 45% in 1999 to 53% in 2007. We had around 31 Public Universities and Musharraf increased them to above 50 Public Universities. Private Universities are uncountable!

Productivity increased and hence revenue generation occured. Revenue Generation INCREASED from Rs. 300 billion to become Rs.800 billion and now in 2008 it will exceed Rs. 1 trillion.

Pakistan is spending ONLY 16% of the annual budget and 3% of GDP on Defence. Yes, we do get monetary assistence from friendly countries. We cannot afford to lag behind when our neighbours are advancing.

Pakistan Defence budget $4.8 billion

Indian Defence budget $26.4 billion

Iran Defence budget $6.3 billion

But, Pakistan has manufactured and developed several landmarks - modernized our Military:

Airborne Early Warning system, Cruise missiles, Agosta Submarines, Al-Khalid Tanks, large scale expansion of Nuclear, will soon manufacture JF-17 thunder, depleted Uranium weapons, Chaft Grenade, etc

 

[maqsad]

Unfortunately, as bad as this government is, I do not see any way to restore investor confidence short term,

Why is it that when any pakistani hears talk about "investors" turning up their noses they have heart attacks? Why should a third world economy be so anxious as to become an INVESTMENT of foreigners? What is wrong with INVESTING IN YOURSELF and standing on your own two feet and exporting and producing equal or more to what you import and consume? Why are INVESTORS with their own CAPITAL so essential to the equations.

Why do you think investors invest in a foreign country to begin with? They do it for PROFIT mostly which means if someone invests $1 billion they expect to MILK $5 billion in the next decade or two and TAKE IT ALL OUT OF PAKISTAN. Now if this "investment" was made by native pakistanis, or the pakistani govt, or even joint ventures and there were laws againt capital flight then money would not run off like this.

None of these investors who are running off intended to invest in pakistan for the benefit of the pakistani people, they did it to make money and then pull their loot OUT of the pakistan economy. The govt should encourage indigenous domestic investment which is guaranteed to STAY in pakistan through thick and thin.

 

[Spring Onion]

Of course it is a balance of payments crisis, this is exactly what it is when you look at the forex burning up. This can easily be understood if you divide the pakistani economy from the rest of the world's economy. Pakistan cannot PAY outsiders for everything it BUYS because it SELLS less than it BUYS. If you SELL a lot less than you BUY then you go in DEBT because you need LOANS and BHEEK to pay for what you BUY from others because you cannot PRODUCE enough of what they want. This entire disaster is because of EXPORTS being less than IMPORTS and that has been the #1 problem of the Pakistan economy since 1947 and nobody has fixed it properly yet! If you look at what I wrote about Telecom, Automobiles and ENERGY which are huuuuuuge sectors of the economy then it becomes clear why we have this crisis today. It is because of the mismanagement of these three huuuge industries that the forex crisis is here today--mainly because of oil prices skyrocketing of course.

But besides the forex crisis which is a balance of payments crisis there is also other problems, mainly that bhangeeconomics has prevented the rapid industrialization of Pakistan because people keep importing hi tech goods instead of creating an environment where high tech manufacturing and high value added products are produced in pakistan. This makes it much much harder to export hi tech hi value products to the rest of the world to help in export earnings.

So you are actually partially agreeing with me but pretending to disagree with me by stealing my points? Wow special journalist trick?

lolzzz come on maqsad i even did not read your earlier post.
I dont know much about economy but i posted what i understood as layman (i wonder if they call it a laywoman too )

i had started learning about economy and i had so far came to understand that it was always a sudden influx of money we had injected into our economy by increasing the public expenditure, borrowing from abroad just like Zardari is trying to do or by sudden FDI investement.
Pondering over it after a while i feel that this sudden influx of money led to shortsighted economic policy.

 

[maqsad]

are you done being stupid? okay because if you are, I'll be able to go over this with you.

And if I am not being stupid then what? You can still go over all this and create confusion, right?

the govt. is SUPPOSED to pay for its imports, in case you did not notice. that's why we are loosing valuable exchange, because we are paying for imports that outstrip our own total production and exports. why is that? it's because of the flight of capital in the recent six months due to political instability.

Doh! No kidding! You just repeated what I said about not exporting enough and importing too much. What do you mean IN CASE I DIDNT NOTICE? I wrote a whole mini-essay on how Shopper Aziz short circuited the economy to create a DEBT BOMB except I gave you the NUTS AND BOLTS of how Shopper Aziz created this shop-o-holic import-dependent bheek-dependent disaster.

And now you turn around and tell me IN CASE I DIDNT NOTICE? That's like me saying one and one is two and two plus two is four and then you coming around and telling me in case I didn't notice one and one is two. What the hell---do you actually think someone can write all that stuff up without realizing that imports are costing way more than exports? Or do you have some serious reading comprehension problems and only read one word in 5 and piece those together in some confused fashion?

Privatization of cell and telemarketing companies has nothing to do with the economy.

The cell industry has EVERYTHING to do with the economy and balance of payments. BILLIONS EACH YEAR IN FOREX ARE LOST BY IMPORTING OVERPRICED CELLPHONES.

Are you actually denying that a) Billions are spent each year in import bills for cellphones alone and b) foreign telco companies are taking out their profits from pakistan each year? (yeah doh that is why people invest--in order to make profits not as welfare)

this is the same retarded excuse on the PPP-manifesto, "Musharraf made Pakistan into consumer economy and not cared for exports". I intentionally wrote that way in a language you can understand, jiyala language.

What PPP manifesto are you talking about first of all because I have never in my life read any manifestos from PPP or Mushy or anyone. What I wrote is just based on common sense and put together with the info I have picked up from news reports all over.


And your figures are just figures---you wanna play figures with me? Ok come on lets play. Show me exactly HOW Shopper Aziz created a $16 billion surplus in FOREX. Come on lets play math now since you seem to like numbers so much lets see you link those numbers to something that makes sense. I want you to start by answering these two very questions:

1. The $17 billion in forex surplus, was it a SOVEREIGN WEALTH FUND or not? Trace back for me billion by billion, year by year and month by month WHERE THAT MONEY CAME FROM.

2. During the 8 year rule of Shopper, how many billions in expatriate remittances did Pakistan experience from 1999 to 2007? Give me the figure in billions for each year how much came in.

 

[opinion786]

Of course it is a balance of payments crisis, this is exactly what it is when you look at the forex burning up. This can easily be understood if you divide the pakistani economy from the rest of the world's economy. :

Your analysis are confused enough!

Trade deficit is never a problem. It BECOMES one if your macro-economic indicators witness an imbalance.

Take India,
Exports - $125 billion
Imports - $188 billion
Deficit - $63 billion
Public debt - $132 billion

But, their Reserves $ 308 billion EXCEED both their deficit and Public debt combined, which gives them the fiscal space to implement export policies and fiscal policies. Hence India's GDP growth is stable at 9%.

Problem numder ONE, with Pakistan is once your credibility goes DOWN (political disturbance) and visionless & policy-less goverbment .... your reserves start depleting.

Investors take their money OUT and start transfering them to stable economies. Overseas pakistani also hodl back their money .... what happens?

Reserves GO DOWN! Reserves go down and that DEVALUES your currency! Currency unstable and investment stopped and reserves halted ... you start taking loans and debt servicing increases.

Credit Rating agencies DEGRADE your currency and exports & imports get halted or stagnated!

Once trade deficit GROWS and there is no Captal inflow nor Revenue Generation.... the government is FORCED to pay debts & import bill through REMAING reserves.

This process hits the REserves TWICE! This is pure incompetence of PPP government !

Our Trade deficit was $13.53 billion in 2006-07 under Shukat Aziz and now 2008 its $20.74 billion.

External Debt under PPP increased from $41 billion (caretaker govt) to $46 billion. Debt serving increased. Shaukat Aziz kept it at $40 billion.

Inflation is 30 year high under PPP.

 

[opinion786]

I want you to start by answering these two very questions:

1. The $17 billion in forex surplus, was it a SOVEREIGN WEALTH FUND or not? Trace back for me billion by billion, year by year and month by month WHERE THAT MONEY CAME FROM.

2. During the 8 year rule of Shopper, how many billions in expatriate remittances did Pakistan experience from 1999 to 2007? Give me the figure in billions for each year how much came in.

You should answer these to justify your stand. He was correct. You present and we'll explain then.

I have the figures!

 

[opinion786]

The cell industry has EVERYTHING to do with the economy and balance of payments. BILLIONS EACH YEAR IN FOREX ARE LOST BY IMPORTING OVERPRICED CELLPHONES. .

EVERYTHING ???? How much billions? How much percent is that of our trade deficit? Why don't you bring FIGURES ... instead of assuming that billions in forex are lost by importing cell phones?

Cell phones import are around $1.1 billion and trade deficit $20.74 billion. It arises to ONLY 5.3%

 

[maqsad]

lolzzz come on maqsad i even did not read your earlier post.
I dont know much about economy but i posted what i understood as layman (i wonder if they call it a laywoman too )

i had started learning about economy and i had so far came to understand that it was always a sudden influx of money we had injected into our economy by increasing the public expenditure, borrowing from abroad just like Zardari is trying to do or by sudden FDI investement.
Pondering over it after a while i feel that this sudden influx of money led to shortsighted economic policy.

Jana let me tell you something. Even a layman can tell what a big disaster bhangeeconomics is. You see I think you are just afraid that because you don't have a masters from LSE that you cannot understand what is going on? Well guess what because you don't have that economic degree you can actually understand some things better! How? Because education is part brainwashing that is how. All these fancy colleges are located in countries that used to colonize Pakistan so you think their courses would be full of information on how third world economies can prosper? Or would they be full of very sophisticated tricks and theories and philosophies which can be used to waste time of pakistanis instead of giving them 100% only the information needed to become from 3rd world to 1st world economies?

So since you are not educated in LSE that means you are also not brainwashed, so it means you can still quickly pick up the basics of how bhangeeconomics destroyed pakistan's economy. You are a journalist so you are supposed to investigate and report--so since you are not brainwashed you can stop listening to all these brainwashed buzz words like "we must have FDI", "we need to restore investor confidence", "we need to liberalize the banking industry", "we need to privatize XXXXX industry" because whenever you hear all these fancy words behind all the talk it is often a scam and a disaster! These fancy phrases are thrown around but in the end pakistanis get ripped off! And scammed!

 

[maqsad]

You should answer these to justify your stand. He was correct. You present and we'll explain then.

I have the figures!

Well if you have the figures then present them, your original post was well written and I haven't answered it yet but you, like everyone else is just presenting part of the picture. Since you present the pictures I have the right to contest them and then the burden of proof is on you to defend yourself. But fine...I can also get figures if needed. I am sure there are sources online that can back me up from the WB, IMF and GOP and I will dig around for them when I have time but right now I am just arguing based on CONCEPTS. Figures are just the icing on the cake, it's the concepts which are more important.

 

[maqsad]

EVERYTHING ???? How much billions? How much percent is that of our trade deficit? Why don't you bring FIGURES ... instead of assuming that billions in forex are lost by importing cell phones?

Cell phones import are around $1.1 billion and trade deficit $20.74 billion. It arises to ONLY 5.3%

Look when I said EVERYTHING I did not mean it literally, its a figure of speech meaning when he said it has NOTHING I said it has EVERYTHING which means that since they are 100% imported they contribute to forex bleeding.

Now with a market of 1.1 billion it could have been stipulated that some percentage of cellphones HAVE TO BE ASSEMBLED with TOT xfer in pakistan otherwise that manufacturer will be BANNED. This way the value added by manufacture would be distributed among pakistani factory workers...say maybe upto about $500 million in value who knows? But this is just an example of the ignorant policy of the govt which just ignores every single opportunity to industrialize and develop the pakistani economy.

But nothing was done--cellphones are a 100% shop-a-holic market niche in pakistan today and you know it.

 

[Spring Onion]

Jana let me tell you something. Even a layman can tell what a big disaster bhangeeconomics is. You see I think you are just afraid that because you don't have a masters from LSE that you cannot understand what is going on? Well guess what because you don't have that economic degree you can actually understand some things better! How? Because education is part brainwashing that is how. All these fancy colleges are located in countries that used to colonize Pakistan so you think their courses would be full of information on how third world economies can prosper? Or would they be full of very sophisticated tricks and theories and philosophies which can be used to waste time of pakistanis instead of giving them 100% only the information needed to become from 3rd world to 1st world economies?

So since you are not educated in LSE that means you are also not brainwashed, so it means you can still quickly pick up the basics of how bhangeeconomics destroyed pakistan's economy. You are a journalist so you are supposed to investigate and report--so since you are not brainwashed you can stop listening to all these brainwashed buzz words like "we must have FDI", "we need to restore investor confidence", "we need to liberalize the banking industry", "we need to privatize XXXXX industry" because whenever you hear all these fancy words behind all the talk it is often a scam and a disaster! These fancy phrases are thrown around but in the end pakistanis get ripped off! And scammed!

well no im not a die hard fan of these courses but i had always been critical of FDIs.

As according to my little brain i think the foreign investers sometime add to your finencial crisis by withdrawing their money just like the recent crisis when foreign investerd withdraw their money from Karachi Stock Exchange.

And we always think that party will never last forever which is a great bluff. iguess.

 

[maqsad]

Your analysis are confused enough!

Trade deficit is never a problem. It BECOMES one if your macro-economic indicators witness an imbalance.

That is ridiculous! Everything a country BUYS has to equal everything it SELLS! There is no way around it unless the country sells its soul and depends on BHEEK and USURY-loans. The value of foreign remittances, foreing investment returns, manufacting exports, service exports, raw material exports HAS TO EQUAL THE VALUE OF IMPORTS to keep the economy healthy. There is no way around that unless you want to hack off pieces of your country and sell it to foreigners.