Pak plans to seek USD 15 bn in new loans to pay external public debt

[Patriot forever]

I'm not ashamed to admit I don't know much about economy and all the technical terms...if u have such knowledge and can find out the nitty gritty details and explain to me in laymen's terms about how this loan would better the situation...I'm all ears.

I don't make it about this party or that party...I'm not some jiyala or patwari. My wish is simple...which is to see the nation prosper...so that ppl don't suffer and can live a respectable life. My post was based on the general notion...that if I take a loan of let's say a $100 dollars...then to pay off that I take a loan of $150 to pay it off and it's interest...then another loan of $300 to pay the $150(plus interest)...
...u can see how it becomes very unsustainable very fast. The previous governments have been doing this...and the total debt has only grown over decades.

But if this case is different...plz do tell...I want to know more about this.

I agree but the main underlying problem in our economy is unsustainable import based model of plmn. If you are runing a foreign account deficit, than you need to borrow firstly to balance your external account deficit, 2nd for the interest and 3rd to repay principal mount. If we understand these 3 factors we will understand the debt trap that Pakistanis in. Plmn destroyed he fundamentals of our economy. Unless we address this basic flaw in our economy we can not overcome this crisis.

IMF, World bank are one of the cheapest source of funding. And in the current post covid scenario its more cheaper. We should take as much of it as possible and try to roll over some of the more expensive loans. This will give us some relief interns of interest payment.

 

[Path-Finder]

Right...that's great and all...but it will take generations of hard work to educate the awam...that's not my concern(right now)...neither are the corrupt assholes of PPP, PML-N, PML-Q, MQM, and all the other clowns.

My concern is for the now and the future. One of the main reasons PTI was able to come to power is bcuz ppl had enough of trying the previous clowns over and over and getting nowhere. This however doesn't mean that PTI should get a free hand. Any leader in a democracy is subject to scrutiny. All I wanna know is...whether this new loan is a step in the right direction or the same old "new bigger loan to pay off the previous one"(like what other parties did). For that...it is important to know the details. I would highly appreciate if someone who knows these things can better explain.

Agreed. Right now there is a huge info war on this! We will know more when more details come out.

 

[dbc]

@dbc pls counter this argument, im not trolling or off topic or breaking any other rule. this is very much to the point. why a negative rating when there is no offence here? why dont we have debate on this topic?

calling Pakistani members 'delusional pricks' earned you a negative rating.

 

[Path-Finder]

I agree but the main underlying problem in our economy is unsustainable import based model of plmn. If you are runing a foreign account deficit, than you need to borrow firstly to balance your external account deficit, 2nd for the interest and 3rd to repay principal mount. If we understand these 3 factors we will understand the debt trap that Pakistanis in. Plmn destroyed he fundamentals of our economy. Unless we address this basic flaw in our economy we can not overcome this crisis.

IMF, World bank are one of the cheapest source of funding. And in the current post covid scenario its more cheaper. We should take as much of it as possible and try to roll over some of the more expensive loans. This will give us some relief interns of interest payment.

are you an economist?

 

[Arsalan]

This is quote an informative discussion and i will like for this to progress. However i will request you and everyone keep emotions in check. Any abusive and foul language will have to be deleted. Please understand that.
If you see any off-topic. irrelevant or trolling posts please hit the report button. It will be taken care of.

This thread is NOT about Bangladesh or India so please avoid dragging them here.

@Arsalan can you control these indians here thanks!

Will be taken care of. REPORT any irrelevant or off-topic post.

 

[Path-Finder]

Hi,
Well to my understanding I agree with your first point. People need to understand that you need to repay your loans in dollars. The most important thing is your exports and remittances vs your imports. No matter how good your domestic economy is doing if there is a deficit then you need to take foreign financing to bridge the gap.

Regarding your 2nd point. Do you have a source for 2% and 5% claim? Now the real problem with plmn government was import based unsustainable growth policy, this destroyed the fundamentals of our economy. Our imports grew at unhealthy rates and exports actually decreased yoy, couple this with subsidized dollar rate. A disaster in the making. We ran huge foreign account deficit, there is no way to bridge the gap except foreign loans.

2ndly most people don't understand that the outflow of dollars is not just imports, but the shady exorbant long term return on investment deals plmn signed in their tenure. IPPs, gas terminal etc. These foreign companies shift their profits in dollars abroad.

I welcome your input/ constructive criticism to my post.

another thing, how many billion did dar spend to keep the rupee artificially floating and false rate?

 

[313ghazi]

Yes...that would be great. Anyone here know how much was the interest rate(s) of the previous loan(s)...as compared to this new one?

No idea. I just hope it's not the other way around!

 

[313ghazi]

I agree but the main underlying problem in our economy is unsustainable import based model of plmn. If you are runing a foreign account deficit, than you need to borrow firstly to balance your external account deficit, 2nd for the interest and 3rd to repay principal mount. If we understand these 3 factors we will understand the debt trap that Pakistanis in. Plmn destroyed he fundamentals of our economy. Unless we address this basic flaw in our economy we can not overcome this crisis.

Absolutely agree. If you spend more than you earn, you either need to spend less or earn more (or both).

If we can't spend less, than we need to earn more. People need to make things, sell them and pay taxes. State needs to help faciliate this.

 

[Path-Finder]

This is a very good video of debt history of Pakistan. it explains the debt relief efforts and borrowing uptill fairly recent.

 

[Patriot forever]

are you an economist?

No I am a doctor. I have an MBA as well but in management. These are some basic concepts, we can easily see the underlying faults in our economy.

 

[bananarepublic]

Its amazing how the forum's face has changed.
Once there were patwaris being overly defensive for the leaders
Ann now the youthias have taken their place, overly defensive and abusive to any criticism their leader

 

[Arsalan]

No idea. I just hope it's not the other way around!

I wont be surprised if it is. In fact, if i am IMF then that is EXACTLY what i would go for. Knowing the desperate situation and the fact that there is not way for gov to pay-off the previous debts i will issue new loans at even higher interest rates knowing that gov. have no choice but to accept it.

 

[volatile]

We are in this mess bcas we are politically unstable where CJ ,Establishment just for the sake of teaching lesson has made blunder e.g the Saqib Nisar famous judicial activism , Dharna 2014 staging , Faizabad dharna .and above all lack of understanding by PTI .The rupee was devalued to push exports which till date has done nothing adding 3 Trillion Rupees in debt financing .FOr Mess you need to look into GDP size and spending

you see that in itself has many holes in it! claimed to be 2% IF it really was 2% do you really think we would be in this mess?

 

[Arsalan]

This is quote an informative discussion and i will like for this to progress. However i will request you and everyone keep emotions in check. Any abusive and foul language will have to be deleted. Please understand that.
If you see any off-topic. irrelevant or trolling posts please hit the report button. It will be taken care of.

This thread is NOT about Bangladesh or India so please avoid dragging them here.

Update, NO MORE DISCUSSING BANGLADESH/INDIA or any other off topic subject. Let this be the final soft warning.

 

[Path-Finder]

We are in this mess bcas we are politically unstable where CJ ,Establishment just for the sake of teaching lesson has made blunder e.g the Saqib Nisar famous judicial activism , Dharna 2014 staging , Faizabad dharna .and above all lack of understanding by PTI .The rupee was devalued to push exports which till date has done nothing adding 3 Trillion Rupees in debt financing .FOr Mess you need to look into GDP size and spending

do us a favour and watch this to understand the destruction of dar!