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Pakistan’s deepening economic crisis is largely due to Ishaq Dar’s flawed policies and gimmickry

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Pakistan’s deepening economic crisis is largely due to Ishaq Dar’s flawed policies and gimmickry

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Dar’s delusion

Editorial
September 3, 2023

ISHAQ Dar lives in a world completely divorced from reality, a world where he can be a self-styled ‘saviour’. During a media talk in London, the former finance minister once again boasted of having rescued Pakistan from the verge of defaulting on its foreign debt payments.

As always, he conveniently skipped the part where he botched the previous IMF loan programme that his predecessor and party colleague had helped revive after significant fiscal adjustments and months of tough talks with the lender. Nor did he mention his own role in bringing the country to the brink of the default he now claims to have averted.

Indeed, Pakistan’s economy was not faring very well when PML-N leader Nawaz Sharif removed Miftah Ismail unceremoniously from the Q Block and dispatched Mr Dar to Islamabad to replace him. Yet, investor confidence had clearly started to improve on the revival of the loan deal with the IMF, and Pakistan was expecting to successfully complete the next programme review that would have paved the way for more official capital inflows and ameliorated its balance-of-payments position.

However, Mr Dar’s advent totally changed the scene, reversing whatever little progress had been made since the revival of the IMF loan facility. His preoccupation with manipulating the exchange rate for a stronger rupee, as well as controlling interest rates, sabotaged Pakistan’s relationship with the IMF.

No matter what he did later — for instance, imposing huge additional taxes on already taxed persons through a supplementary finance bill and devaluating the currency — he was unable to convince the IMF to complete the pending review and release the money.

The deepening economic crisis, characterised by entrenched inflation, steep rupee depreciation and rising costs of power and fuel that we have on our hands today is largely because of his obsession with a strong rupee and low interest rates, as well as his failure to cut the huge fiscal deficit by taxing the undertaxed and untaxed sectors.

He says his party has paid a heavy political price to avert a sovereign default. What about the unimaginable price the majority of Pakistanis are forced to pay every day, and will continue to pay for the next several years because of his flawed policies and gimmickry? No wonder many don’t want him to return, at least not to Q Block.

 
He is likely to be Pakistan’s next Finance minister.
 
@PanzerKiel

On my last trip to Pakistan, when COVID hit, I heard cart pushers (rari-wala) discuss how to solve Pakistan's issues. Then and there, I knew it was impossible to fix the problems in Pakistan with Pakistanis themselves. The lack of economic tools at the State Bank of Pakistan and the Ministry of Finance and the skill sets our students acquire do not match up. Even the Chinese rushed to learn from the U.S. during the 2008 financial crisis how to divert the worst-case scenario.

During the 2008 financial crisis, one of the executives on Obama's team was a Pakistani named Saleem Khatri, who managed the 80 billion dollar program to revitalize the auto sector in 2008; since then, he created three start-ups and sold them for millions of dollars. (One of the projects Instavest Inc. I was involved with him.)

My problem is that if the Chinese ran to learn and we have talented individuals in the West, we can't tap them, as we already see some bring religious issues and other ideas to derail.

It's sad that while India touched the moon (jokes aside), we are discussing the agricultural revolution. This probably has to be the biggest joke of this century; even Bangladesh is past this stage.

Then the issue I have is the media publishing these useless reports and not countering them; how will borrowing to starve of default today make situations any better tomorrow when the debt due date comes, and we have to run again? Again, it's a lack of skilled individuals to teach people.

Anyways, it's just frustrating to see what's going on.
 
@PanzerKiel

On my last trip to Pakistan, when COVID hit, I heard cart pushers (rari-wala) discuss how to solve Pakistan's issues. Then and there, I knew it was impossible to fix the problems in Pakistan with Pakistanis themselves. The lack of economic tools at the State Bank of Pakistan and the Ministry of Finance and the skill sets our students acquire do not match up. Even the Chinese rushed to learn from the U.S. during the 2008 financial crisis how to divert the worst-case scenario.

During the 2008 financial crisis, one of the executives on Obama's team was a Pakistani named Saleem Khatri, who managed the 80 billion dollar program to revitalize the auto sector in 2008; since then, he created three start-ups and sold them for millions of dollars. (One of the projects Instavest Inc. I was involved with him.)

My problem is that if the Chinese ran to learn and we have talented individuals in the West, we can't tap them, as we already see some bring religious issues and other ideas to derail.

It's sad that while India touched the moon (jokes aside), we are discussing the agricultural revolution. This probably has to be the biggest joke of this century; even Bangladesh is past this stage.

Then the issue I have is the media publishing these useless reports and not countering them; how will borrowing to starve of default today make situations any better tomorrow when the debt due date comes, and we have to run again? Again, it's a lack of skilled individuals to teach people.

Anyways, it's just frustrating to see what's going on.

The same individuals if they would be in pak would have struggled with basic bread and butter. Hence the system spearheaded by khaki creatures is the issue.
 
On my last trip to Pakistan, when COVID hit, I heard cart pushers (rari-wala) discuss how to solve Pakistan's issues. Then and there, I knew it was impossible to fix the problems in Pakistan with Pakistanis themselves. The lack of economic tools at the State Bank of Pakistan and the Ministry of Finance and the skill sets our students acquire do not match up. Even the Chinese rushed to learn from the U.S. during the 2008 financial crisis how to divert the worst-case scenario.

My problem is that if the Chinese ran to learn and we have talented individuals in the West, we can't tap them, as we already see some bring religious issues and other ideas to derail.

It's sad that while India touched the moon (jokes aside), we are discussing the agricultural revolution. This probably has to be the biggest joke of this century; even Bangladesh is past this stage.

Then the issue I have is the media publishing these useless reports and not countering them; how will borrowing to starve of default today make situations any better tomorrow when the debt due date comes, and we have to run again? Again, it's a lack of skilled individuals to teach people.
Lack of human capital may be as severe or more than the lack of fiscal capital. Money may be borrowed but from whence shall talent come?

,.,..

Pakistan’s deepening economic crisis is largely due to Ishaq Dar’s flawed policies and gimmickry

View attachment 950746

Dar’s delusion

Editorial
September 3, 2023

ISHAQ Dar lives in a world completely divorced from reality, a world where he can be a self-styled ‘saviour’. During a media talk in London, the former finance minister once again boasted of having rescued Pakistan from the verge of defaulting on its foreign debt payments.

As always, he conveniently skipped the part where he botched the previous IMF loan programme that his predecessor and party colleague had helped revive after significant fiscal adjustments and months of tough talks with the lender. Nor did he mention his own role in bringing the country to the brink of the default he now claims to have averted.

Indeed, Pakistan’s economy was not faring very well when PML-N leader Nawaz Sharif removed Miftah Ismail unceremoniously from the Q Block and dispatched Mr Dar to Islamabad to replace him. Yet, investor confidence had clearly started to improve on the revival of the loan deal with the IMF, and Pakistan was expecting to successfully complete the next programme review that would have paved the way for more official capital inflows and ameliorated its balance-of-payments position.

However, Mr Dar’s advent totally changed the scene, reversing whatever little progress had been made since the revival of the IMF loan facility. His preoccupation with manipulating the exchange rate for a stronger rupee, as well as controlling interest rates, sabotaged Pakistan’s relationship with the IMF.

No matter what he did later — for instance, imposing huge additional taxes on already taxed persons through a supplementary finance bill and devaluating the currency — he was unable to convince the IMF to complete the pending review and release the money.

The deepening economic crisis, characterised by entrenched inflation, steep rupee depreciation and rising costs of power and fuel that we have on our hands today is largely because of his obsession with a strong rupee and low interest rates, as well as his failure to cut the huge fiscal deficit by taxing the undertaxed and untaxed sectors.

He says his party has paid a heavy political price to avert a sovereign default. What about the unimaginable price the majority of Pakistanis are forced to pay every day, and will continue to pay for the next several years because of his flawed policies and gimmickry? No wonder many don’t want him to return, at least not to Q Block.

But he is a devout man. He posts many verses on his Twitter, though there isn't any policy information.
 
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Lack of human capital may be as severe or more than the lack of fiscal capital. Money may be borrowed but from whence shall talent come?

That is the new issue Pakistan facing over a million individuals from technical and specialty fields have left the country for greener pastures within the last year. That is a brain drain on an irreplaceable scale. (For those who say we have a strong population as backbone; majority of youth are useless and very few make it to the top).

This wasn't within the scope of understanding with this regime change operation as in the past this many never left. One thing PDM and the military failed to understand is that in the outside world, there is a war of talent: companies and countries are paying top dollar as they are in a race with each other. I know many who were working in the defense sector in Pakistan and got offered and picked up and left with their families.

The other issue is the decrease in remittances over time. You can never live forever on borrowed time as eventually, the collector will come and it will be a time of reckoning.
 
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That is the new issue Pakistan facing over a million individuals from technical and specialty fields have left the country for greener pastures within the last year. That is a brain drain on an irreplaceable scale. (For those who say we have a strong population as backbone; majority of youth are useless and very few make it to the top).

This wasn't within the scope of understanding with this regime change operation as in the past this many never left. One thing PDM and military failed to understand is that in the outside world, there is a war of talent: companies and countries are paying top dollar as they are in a race with each other.
Lebanon 2.0
 
Lebanon 2.0


Read the article and comment section.

I said it before, and I was proven correct again. People do not do things they are trained for in Pakistan.

What credentials do this and any army officer have to talk economics and try and run a money-grabbing fund?
 
Pakistan literally has the Saudis/GCC, U.S.(IMF/World Bank), and China preventing Pakistan from collapsing.


It also seems that the current COAS is making a real effort to do economic reforms as well as actually making an effort to collect taxes.


Unlike the Political Parties, who have to make poor decisions due to Pakistani's Suicidal Voter Preferences, I think COAS Asim Munir can pull it off.


This model has proven very successful in Pinochet's Chile and Putin's Russia, which are countries with relatively similar material conditions to Pakistan.
 
Pakistan literally has the Saudis/GCC, U.S.(IMF/World Bank), and China preventing Pakistan from collapsing.


It also seems that the current COAS is making a real effort to do economic reforms as well as actually making an effort to collect taxes.


Unlike the Political Parties, who have to make poor decisions due to Pakistani's Suicidal Voter Preferences, I think COAS Asim Munir can pull it off.
What expertise does Pakistani army have in economic matters? They should first learn to do their primary job.
This model has proven very successful in Pinochet's Chile and Putin's Russia, which are countries with relatively similar material conditions to Pakistan.
How are Chile and Russia similar to Pakistan ? Both are much richer than Pakistan with huge natural commodities wealth relative to their population. Neither country has been very successful given the resources they have. One can argue that other countries in South America have done even worse than Chile, but Russia has been in steady decline for decades and the process has accelerated in the last few months.
 
What expertise does Pakistani army have in economic matters? They should first learn to do their primary job.

How are Chile and Russia similar to Pakistan ? Both are much richer than Pakistan with huge natural commodities wealth relative to their population. Neither country has been very successful given the resources they have. One can argue that other countries in South America have done even worse than Chile, but Russia has been in steady decline for decades and the process has accelerated in the last few months.
The Miracle of Chile and the Miracle of Putin's Russia are both the models for Anglo-Saxon designed Security States to achieve sustainable relatively high growth rates.


Both took a basket case, Most of Chilean History pre-Pinochet, and Yeltsin's Democratic Populist Russia, and turned them into Hyper-capitalist Ultra-Neoliberal Technocracies.
 
Pakistan is going back to her past, revise gear ..

When donkey carts were landing on the runway. Karachi airport in the 1940s.

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