Pakistan should refuse to pay foreign aid: Labour Relief Campaign

[muse]

Sparkling


Was that a call to renegotiate or to default?


I don't share your soft spot for PPP, they are but betrayers.

 

[kidwaibhai]

its not that bad our debt to GDP ratio is still below 60% which is ok for a developing country. Everybody needs to calm down with the hyperbole. We are in bad shape right now but we will find a way we always do. not in the most elegant of ways but we always find a way

 

[sunny001]

its not that bad our debt to GDP ratio is still below 60% which is ok for a developing country. Everybody needs to calm down with the hyperbole. We are in bad shape right now but we will find a way we always do. not in the most elegant of ways but we always find a way

It's just not about percentage of debt, its percentage of external debt that's worrying Pakistan.

 

[airuah]

Thats not a bad idea infact a great idea. This will just open a pandoras box. Other African countries will follow suit.
I am not sure how G7 will react to it.. but there will be a lots of support for Pakistan.

(in reply to ididani alone)
brilliant post i must say......now who do you think will trade with pakistan if it refuses o pay its debt.....even china wont coz most of the stuff pakistan is receiving is under credit (including jf17 -though locally produced china is offering credit as it is a partner). what will happen to security-both national and food?......

and africa will follow......? what if US refused to pay its debts?what will happen to world eonomy? china became an economic giant on hard work.....it will become a pauper in a day if the world nations start forgoing their debts................and when even china will suffer think where it will leave bangladesh?

foreign aid is given to help nations in need.....and if the nation does not repay the money?what honour does it have ?

 

[Awesome]

Lunatics want Pakistan to default on its payments

 

[sparklingway]

Sparkling

Was that a call to renegotiate or to default?

Renegotiate. Defaulting is moronic.

I don't share your soft spot for PPP, they are but betrayers.

So does that mean off-topic and clearly non-related rants are necessary all the time?

Objectivity should be the prime criteria.

 

[Sinnerman108]

Renegotiate. Defaulting is moronic.



So does that mean off-topic and clearly non-related rants are necessary all the time?

Objectivity should be the prime criteria.

Please do discuss how is defaulting "moronic"

Brazil defaulted and is coming back pretty ok.

that too without the political and strategic leverage that we bring to the table.

 

[AgNoStiC MuSliM]

K-P province alone is announcing 2 trillion in damages. Costs overall will continue to rise as the impact of destroyed crops sinks in.

With damages this high, and with the mindset that Pakistan will have to shoulder the burden for this on its own for the most part, I think the possibility of defaulting on the foreign debt, if the major lenders do not agree to restructuring, needs to be seriously considered.

One has to balance the arguments of loss of foreign investment and end of foreign lending for a certain amount of time with the cost of not having enough funds to feed millions of starving people and reconstructing their homes and businesses, and providing farmers the resources and infrastructure to get ready for the next planting cycle.

The whole point of foreign investment and foreign loans is to fund infrastructure and socio-economic projects and create economic opportunity for more people to benefit from - that means little when millions have had everything destroyed, and the government does not have the resources to rehabilitate them.

 

[Solomon2]

Guys, international creditors are not the harshest of people in such situations and are usually more than ready to let interest payments slide for some months without penalty - it just takes a little negotiation. What they won't want to see is (1) Pakistan totally excused from all its debts, and (2) loan relief that doesn't get applied to the needy but disappears in a puff of corruption instead. In my opinion, too many Pakistanis are looking at the $$$$, rather than how they can best help their countrymen.

The South Koreans, while not suffering from natural disasters of a Pakistani scale, nevertheless have a corruption-prone society. Maybe taking a couple of pages from their books will help? For example, I understand that teachers charged with drawing up critical school exams are held incommunicado - comfortably - until the exams are actually taken. This eliminates the pressure to give an "edge" to their own family members, who of course then would also use the information to help their friends...

 

[AgNoStiC MuSliM]

Guys, international creditors are not the harshest of people in such situations and are usually more than ready to let interest payments slide for some months without penalty - it just takes a little negotiation. What they won't want to see is (1) Pakistan totally excused from all its debts, and (2) loan relief that doesn't get applied to the needy but disappears in a puff of corruption instead. In my opinion, too many Pakistanis are looking at the $$$$, rather than how they can best help their countrymen.

Hence my suggestion that debt payments and interest waived should be looked at as if the lenders were providing financial assistance for development projects - i.e the GoP would have to show lenders which projects the money saved was going into, and establish transparency, accountability and feasibility WRT those projects.

Nawaz Sharif had the right idea in suggesting the formation of an independent authority that would monitor and control reconstruction funds (proposed several very reputable former Justices as members of the authority) - if Zardari agrees, such an authority could relieve doubts in the minds of lenders and donors WRT to money provided/payments postponed not being embezzled and wasted.

The South Koreans, while not suffering from natural disasters of a Pakistani scale, nevertheless have a corruption-prone society. Maybe taking a couple of pages from their books will help? For example, I understand that teachers charged with drawing up critical school exams are held incommunicado - comfortably - until the exams are actually taken. This eliminates the pressure to give an "edge" to their own family members, who of course then would also use the information to help their friends...

When the ruling party's top leadership makes statements like 'a degree is a degree, whether real or fake' and 'corruption is our right since we were elected', then I think there is little chance of 'accountability'.

 

[Solomon2]

If Pakistan made an effort to raise domestic capital using low-interest bonds and offered to let international creditors hold these as security, that would be one of the most confidence-inspiring efforts I can imagine. (Unfortunately, wealthy Pakistanis are much more apt to stash their money abroad. )

 

[Hyde]

K-P province alone is announcing 2 trillion in damages. Costs overall will continue to rise as the impact of destroyed crops sinks in.

are you sure its 2 trillion rupees? Khyber Pakhtunkhwa contributes about 10% of country's economy this 2 trillion rupees (or 23 billion dollars) sounds unrealistic.

 

[sparklingway]

Please do discuss how is defaulting "moronic"

Brazil defaulted and is coming back pretty ok.

that too without the political and strategic leverage that we bring to the table.

Do you seriously think that the creditors are giving us the political and strategic leverage that is necessary? I've not got positive thoughts on that. I seriously think that defaulting is not an option since we're obviously primed for further loans and defaulting will create problems.

My opinion, does not have to be right obviously.

 

[AgNoStiC MuSliM]

If Pakistan made an effort to raise domestic capital using low-interest bonds and offered to let international creditors hold these as security, that would be one of the most confidence-inspiring efforts I can imagine. (Unfortunately, wealthy Pakistanis are much more apt to stash their money abroad. )

The Pakistani Finance Minister Hafeez Shaikh and PML-N's finance man, Ishaq Dar, are supposed to enter into discussions on the feasibility of the PML-N's proposal on the reconstruction commission/authority/body - under the proposal the Feds would deposit Rs. 250 billion, with the provinces kicking in another 300 billion (or raising the total to 300 billion - statements were not clear on that count). That would be in addition to foreign aid and private domestic donations.

If anything close to that can be managed, I would think that default, or even rescheduling/restructuring loans, would not be completely necessary, though still helpful.

 

[Solomon2]

Default won't help Pakistan in either the long- or short-run. And the financial games should wait. Flood relief is needed now. Relief accounting can wait. You need to supply refugees with 10,000 tons a day. Two hundred fifty tractor-trailers' worth every day. Doesn't anybody else grasp the magnitude of these statistics?