pakistan economy to face severe crises over chinese loan

[IceCold]

People and i mean those who matter and not PDF trolls have something up their asses since CPEC began and the more this project goes towards completion, the more deep that thing goes behind them and hence the pain. Never the less CPEC is going to continue one way or the other. Having said that however i feel that everything in it needs to be transparent. No matter how much close of a relationship we have with China, at the end of the day it comes down to ones own interest and while China will surely look after hers at the end of the day, Pakistan should be looking at her own. There is neither anything wrong in it nor will it make us any less of a friend. Its just business and no one better than the Chinese would understand it.

 

[RoadRunner401]

If whats said in the op is true,its really bad for Pakistan.i wish its not true theough.

Pakistani's should try to look at the actual truth instead of blindly saying these are paid articles..there is nothing wrong in verifying.
As my math teacher used to say numbers dont lie....

STAB a finger at the middle of a map of India and you will hit Nagpur. Some 20 miles (32 kilometres) north-west of the city is a sloping tunnel bored into the rock. Ride two miles down into the gloom, hanging from a wire, and after a torch-lit hike past underground streams and conveyor belts you arrive at a black wall. Sweating men are rigging it with tubes of explosives and wire detonators. Soon they will blast it apart, and down should tumble tonnes of India's most important commodity: coal.

In coal India has something as abundant as people. As more Indians enjoy the trappings of middle-class life and the country industrialists, demand for coal-fired electricity will continue to rise smartly, roughly in line with economic growth. India may not have much oil or gas to call its own but it has the world's fifth-largest coal reserves. And it has successfully raised a mountain of the other raw material needed to turn carbon into sparks: capital. Some $130 billion has been ploughed into the power industry in the past five years. Of that, $60 billion or so has come from the private sector—probably the largest-ever private-sector investment India has seen.

Possessing coal and capital is no guarantee that India's energy boiler will work properly, however. It also involves multiple states, government ministries, regulators, mandarins, politicians, tycoons, environmentalists, villagers, activists, crooks and bandits. There are the usual gripes of an emerging economy: blackouts (during peak hours the system delivers 10% less electricity than customers want) and an inadequate grid that does not reach some 300m people (although it has improved a lot in recent years).

There is also a risk that India cannot deliver the long-term increase in electricity generation that its economy needs to fulfill its potential. On January 18th a group of influential businessmen gathered in Delhi to bend the prime minister's ear on this very matter.

The problem is partly one of design. Coal is dug up by a state-monopolist that has failed to boost output significantly in recent years, unlike China (see chart 1), and so cannot keep up with demand. Power is distributed to homes and firms by publicly owned grid companies that are often bankrupt, their tariffs kept too low by local politicians. Trapped in the middle are the firms that run power stations. In desperation they are importing pricier foreign coal, but the grid companies cannot afford the power it produces. With too little coal and wobbly customers, the private firms that have built new power stations are in financial trouble. Another wave of private investment looks unlikely.

Yes it seems Indians have sustainable system in place to produce and sell power plus I am pretty sure 60 $billion from private sectors isn't taking any profits not to mention Indian government underwrote those investments at the cost of millions to tax payers, point is simple, go fix your own before telling us what to do, our experiment with private power (k-Electric) has been a complete success and we should continue on that path

 

[Laozi]

STAB a finger at the middle of a map of India and you will hit Nagpur. Some 20 miles (32 kilometres) north-west of the city is a sloping tunnel bored into the rock. Ride two miles down into the gloom, hanging from a wire, and after a torch-lit hike past underground streams and conveyor belts you arrive at a black wall. Sweating men are rigging it with tubes of explosives and wire detonators. Soon they will blast it apart, and down should tumble tonnes of India's most important commodity: coal.

In coal India has something as abundant as people. As more Indians enjoy the trappings of middle-class life and the country industrialists, demand for coal-fired electricity will continue to rise smartly, roughly in line with economic growth. India may not have much oil or gas to call its own but it has the world's fifth-largest coal reserves. And it has successfully raised a mountain of the other raw material needed to turn carbon into sparks: capital. Some $130 billion has been ploughed into the power industry in the past five years. Of that, $60 billion or so has come from the private sector—probably the largest-ever private-sector investment India has seen.

Possessing coal and capital is no guarantee that India's energy boiler will work properly, however. It also involves multiple states, government ministries, regulators, mandarins, politicians, tycoons, environmentalists, villagers, activists, crooks and bandits. There are the usual gripes of an emerging economy: blackouts (during peak hours the system delivers 10% less electricity than customers want) and an inadequate grid that does not reach some 300m people (although it has improved a lot in recent years).

There is also a risk that India cannot deliver the long-term increase in electricity generation that its economy needs to fulfill its potential. On January 18th a group of influential businessmen gathered in Delhi to bend the prime minister's ear on this very matter.

The problem is partly one of design. Coal is dug up by a state-monopolist that has failed to boost output significantly in recent years, unlike China (see chart 1), and so cannot keep up with demand. Power is distributed to homes and firms by publicly owned grid companies that are often bankrupt, their tariffs kept too low by local politicians. Trapped in the middle are the firms that run power stations. In desperation they are importing pricier foreign coal, but the grid companies cannot afford the power it produces. With too little coal and wobbly customers, the private firms that have built new power stations are in financial trouble. Another wave of private investment looks unlikely.

Yes it seems Indians have sustainable system in place to produce and sell power plus I am pretty sure 60 $billion from private sectors isn't taking any profits not to mention Indian government underwrote those investments at the cost of millions to tax payers, point is simple, go fix your own before telling us what to do, our experiment with private power (k-Electric) has been a complete success and we should continue on that path

For a moment I was worrid

Then I Googled the Report

Guess What after seeing the date of publication I
http://www.economist.com/node/21543138

The future is black
Power is essential for India’s long-term growth. But electricity is unlikely to flow fast enough
Jan 21st 2012 | NAGPUR

Hindu Country Debt
$485.6 billion (x9.7 Times more debt than Pakistan)

Yours Debts are still manageable

But If your GDP does not keep pace with the Debts then Pakistan may fall in Debt Trap

 

[RoadRunner401]

For a moment I was worried

Then I Googled the Report

Guess What after seeing the date of publication I
http://www.economist.com/node/21543138

The future is black
Power is essential for India’s long-term growth. But electricity is unlikely to flow fast enough
Jan 21st 2012 | NAGPUR

Not exactly sure what you are so happy about, you are celebrating the date difference between today and when this report was published, ignoring the fact that the issues reported in that report are still alive and not resolved by any imagination

 

[rome333]

Pakistan should make sure that connectivity through CPEC does not reduce its competitive advantage in selective export oriented sectors as Western Chinese industrial zone will gain a significant logistical and cost advantage.
Also close scrutiny is required from Pakistan side on the quality of work done by Chinese, since Chinese do have records of using under-qualified staffs for their work. Eg. recently a group of engineers of Sino Hydro was unable to come forward with a satisfactory design for river bank protection work of Padma Bridge in BD. After scrutinizing by monitoring board it was found that the professionals were under qualified to undertake the work. Therefore they were dismissed from the project.
See. Always be on your toes regardless of friend or foe.

 

[Laozi]

Not exactly sure what you are so happy about, you are celebrating the date difference between today and when this report was published, ignoring the fact that the issues reported in that report are still alive and not resolved by any imagination

We Indians have started producing more Solar Power than the Total Power Pakistan produces from all sources

Therefore We know where we are Heading : Towards RENEWABLE SOURCES

But why I am telling it to someone who openly PROCLAIMS
People who think they know everything are a great annoyance to those of us who do.

 

[mzeeshanfahd]

it will not be under stress when we lend form IMF and WB ..... it will only .... repeat only under stress when we take from china .............

 

[Saif-ud-Din Qutuz]

If there weren't any severe economic crisis due to IMF/World Bank loans then there won't be any over Chinese loans. This writer can go and jump inside the kussa of his mom and all he got to do is dub gaye in the stinky kussa of his mom. That's all I can say.

 

[Zee-shaun]

My reply to a similar thread:

The oracle paints a pic of 2050 but fails to understand the dynamics of Pakistan; not a single ref to our natural resources, our manpower or the powerful diaspora which is ready to invest billions in Pakistan securing their wealth from the troubled shores of America and the EU and the ever increasing remittances to name a few.

Once the infrastructure is there, we will finally exploit our untouched natural resources which are worth over $2 trillion. Coal, copper, gold, ironore, carbohydrates, molybdenum and even uranium and thorium. Most of these metals and liquids don't even need to travel across the globe, the biggest market is right next door connected with a dense network of state of the art highways, railways and pipelines.

One really has to be an idiot, or an Indian for that matter to believe that none of these wealths will be utilised, our tax base will remain at 1% and no domestic investments will be made till 2050, every penny will come from China.

Obviously someone here is on the Indian payroll and the article is for Indian consumption.

My do paisa

 

[nang2]

A quote from wiki:

The energy projects under CPEC will be constructed by private Independent Power Producers, rather than by the governments of either China or Pakistan.[157] The Exim Bank of China will finance these private investments at 5–6% interest rates, while the government of Pakistan will be contractually obliged to purchase electricity from those firms at pre-negotiated rates.[158]

 

[SecretMission]

Someone trying to make IMF happy ,below is detail of one of thar coal power project

Accordingly, the company would sell power at Rs3.67 per kilowatt per hour in the first 10 years of its operations. The tariff would reduce to Rs1.91 per kilowatt per hour for the next 20 years.

The tariff comprises a return on investment at 38% and debt servicing at 48%.

 

[NakedLunch]

There is smear campaign against CPEC in DAWN and other English news websites. From the day, CPEC project was declared in 2014, we have been seeing constant barrage of such anti-China topics in English media to spread so much negativity against it. Most of the times, these journalists doesn't know a shit about Govt to Govt deals yet every tom, dick and Harry becomes an economist with their blogs.

Its good that China is involved in most of the energy projects in next decade or so else we all know what we did with KalaBagh Dam when it comes to doing something on our own. Yes interest might be slightly higher in certain projects but at the same time we can't just sit down let our industry die because of lack of power.

Did you know that there are Pakistani newspapers affiliated with the Washington Post and New York Times? Ask the right questions and you will get answers. There are newspapers in Pakistan that are peddling US-India propaganda in Pakistan. I can name you at least one Pakistani journalist who is on US payroll.

To be honest, Pakistan being a poor country, has no choice anyway. It's generally considered a risky country for foreign investors, due to the security and economic/investment climate situation and corruption of the country. So obviously Chinese investors will charge a higher interests for their loans considering the high risks involved by such a huge investment. I don't find anything wrong there. At least they are getting some investment.
Granted that they should manage these loans to the best of their ability given the high interests rate which they have to repay together with the lump sum of the loan itself, else they MIGHT end up worse off at the end of the day. So it all depends on how well they manage and allocate these funds in the most productive areas of their economy as well. The Jury is still out there. Only time will tell.

The most important thing in this article and something i find really commendable, is the fact that some people in the country are aware and rational enough to indulge in self criticism and looking at any loopholes and asking questions from any investments/loans even coming from a very close ally at the risk of being labelled traitors or puppets of foreign powers lol ) That's a good start, since one might have expected them to turn a blind eye on this aspect and ignore everything else in there. Once a country can self criticize/introspect irrespective of which country it affects, then that's a good start in self correction and making things right or even better in future

You are not Anglo saxon are you?

To be honest, Pakistan being a poor country, has no choice anyway. It's generally considered a risky country for foreign investors, due to the security and economic/investment climate situation and corruption of the country. So obviously Chinese investors will charge a higher interests for their loans considering the high risks involved by such a huge investment. I don't find anything wrong there. At least they are getting some investment.
Granted that they should manage these loans to the best of their ability given the high interests rate which they have to repay together with the lump sum of the loan itself, else they MIGHT end up worse off at the end of the day. So it all depends on how well they manage and allocate these funds in the most productive areas of their economy as well. The Jury is still out there. Only time will tell.

The most important thing in this article and something i find really commendable, is the fact that some people in the country are aware and rational enough to indulge in self criticism and looking at any loopholes and asking questions from any investments/loans even coming from a very close ally at the risk of being labelled traitors or puppets of foreign powers lol ) That's a good start, since one might have expected them to turn a blind eye on this aspect and ignore everything else in there. Once a country can self criticize/introspect irrespective of which country it affects, then that's a good start in self correction and making things right or even better in future

Indian masquerading as an Anglo Saxon. Why do you think you need to do this?

 

[Hakikat ve Hikmet]

At the end of the day if some Pak folks pocket some US money, which isn't easy at all, not a bad thing!! They know it fully well that these are propaganda, and the Pak establishment is way too smart and general folks are way too brave. Even after the devastating bomb blast they rush to the same shrine with new vigor!!! They know that Hayat and Rizk are from Allah-u Azimushshan not White House or Wall Street...

 

[NakedLunch]

At the end of the day if some Pak folks pocket some US money, which isn't easy at all, not a bad thing!! They know it fully well that these are propaganda, and the Pak establishment is way too smart and general folks are way too brave. Even after the devastating bomb blast they rush to the same shrine with new vigor!!! They know that Hayat and Rizk are from Allah-u Azimushshan not White House or Wall Street...

May Allah Bless my Turkish Brothers and Sisters. You guys are our right arm. We will always need you brothers.

 

[Hakikat ve Hikmet]

May Allah Bless my Turkish Brothers and Sisters. You guys are our right arm. We will always need you brothers.

And, the Turkish folks need you. Insha'Allah they have a bright future together in all aspects - defense, trade, education, economy, industry, construction etc. These Last Castles at the western and eastern flanks will not fall Insha'Allah!!