Pakistan's Economy - News and Updates

[Skull and Bones]

View attachment 954967

Purchasing power of people is going to go down drastically. And if there is any natural calamity, then it could put people close to starvation.

 

[fatman17]

Purchasing power of people is going to go down drastically. And if there is any natural calamity, then it could put people close to starvation.

PP already hurting the lower middle class and the poor.

 

[epebble]

Purchasing power of people is going to go down drastically. And if there is any natural calamity, then it could put people close to starvation.

At present, Pakistan is similar to other distressed economies in PP:

Ghana *	Africa	6,974	2023	6,498	2022	5,400	2021
Djibouti *	Africa	6,894	2023	5,893	2022	4,900	2021
Pakistan *	Asia	6,836	2023	6,437	2022	5,200	2021
Palestine *	Asia	6,688	2023	6,200	2021	5,600	2021
Kenya *	Africa	6,569	2023	5,764	2022	4,700	2021

A further reduction may bring it down to:

Myanmar *	Asia	5,132	2023	4,870	2022	4,400	2021
Nepal *	Asia	5,101	2023	4,725	2022	3,800	2021

 

[fatman17]

Pakistan’s economy on edge of precipice, warns World Bank

Says current model can’t reduce poverty as Pakistan has lowest per capita income in South Asia and highest out-of-school kids.

www.dawn.com

 

[fatman17]

Economic model ‘flops’: Poverty hits 39.4pc mark, say World Bank officials

ISLAMABAD: Pakistan’s current economic development model is no longer reducing poverty and provides few benefits to...

www.brecorder.com

 

[fatman17]

Economic model ‘flops’: Poverty hits 39.4pc mark, say World Bank officials

ISLAMABAD: Pakistan’s current economic development model is no longer reducing poverty and provides few benefits to...

www.brecorder.com

Inflation has hit the poor and the lower middle classes the elite and the upper middle class think that things are normal. The restaurants and malls in Karachi DHA and KDA are enjoying great business.

Inflation has hit the poor and the lower middle classes the elite and the upper middle class think that things are normal. The restaurants and malls in Karachi DHA and KDA are enjoying great business.

 

[Dalit]

But but the generals were going to fix the economy?

Remember how the Western powers used to lecture us how terrible the economy was during Imran Khan's days. They are incredibly muted today.

Inflation has hit the poor and the lower middle classes the elite and the upper middle class think that things are normal. The restaurants and malls in Karachi DHA and KDA are enjoying great business.


View attachment 955724

What I find incredibly inconceivable is how the Pakistanis are taking this without any protest.

 

[Ali_Baba]

Inflation has hit the poor and the lower middle classes the elite and the upper middle class think that things are normal. The restaurants and malls in Karachi DHA and KDA are enjoying great business.


View attachment 955724

It just shows how unequal Pakistani society have become with the "awam" paying all the taxes, and the middle classes and elites are partying by paying no taxes. Of course good times are here for those classes, where is no taxes on houses, or retail .. i can go on, etc.

 

[fatman17]

But but the generals were going to fix the economy?

Remember how the Western powers used to lecture us how terrible the economy was during Imran Khan's days. They are incredibly muted today.



What I find incredibly inconceivable is how the Pakistanis are taking this without any protest.

There has been protests against electricity bills and petrol prices in the cities esp Karachi but were not sustained. People are angry.

 

[fatman17]

Govt projects 31% rise in inflation | The Express Tribune

Aligns with ADB highlighting Pakistan as having highest inflation rate in Asia

tribune.com.pk

 

[fatman17]

Economy bleeds $23b annually | The Express Tribune

On black market currency trade, oil and gold smuggling, import controls

tribune.com.pk

 

[fatman17]

Pakistan fails to realise CPEC potential | The Express Tribune

Fawad says country could not increase exports by putting together SEZs

tribune.com.pk

 

[Olympus81]

That’s good.

Corrupt Lumber 1 and their failed project of installing cartoons at the helm.

 

[nahtanbob]

May be old news

2022 a dismal year for Pakistani startups​

2022 a dismal year for Pakistani startups

The cracks first began to appear in the second quarter of 2022, when startups started scaling back their operations and laying off people.

asianews.network

The cracks first began to appear in the second quarter of 2022, when startups started scaling back their operations and laying off people.

December 28, 2022

By every measure, 2022 has been a pretty tumultuous year for Pakistan. On the political front, it saw the first vote of no confidence being passed in parliament, removing former prime minister Imran Khan’s government. The massive protests that followed seem to have put an irreparable dent in the establishment’s role and status.

However, all those developments pale in comparison to the economic crisis the country has been reeling through over the last year. Peak inflation in almost two generations and the sharp monetary contraction managed to put a major dent in customers’ and businesses’ pockets. All of this was only made worse by the dilly-dallying resumption of the International Monetary Fund (IMF) programme and the constant talk of default.

For tech startups though, it was the changing global macros more than anything that spoiled the party. After a solid 2021 on the back of a capital frenzy that swept away markets the world over, and record investment of $366 million in Pakistan, there was naturally a lot of optimism for the ecosystem in 2022. And it started on a high note too: local startups raised over $174m in the first quarter. But the US Federal Reserve’s contractionary policy amid high inflation soon caught up and slowed down the venture capital activity.

The cracks first began to appear in the second quarter of 2022, when startups started scaling back their operations and laying off people. That included Airlift, which pulled out of all cities other than Karachi, Lahore and Islamabad and let go of 31 per cent of the workforce. Soon after, Swvl, Retailo and Truck It In followed suit. However, the fundraising held up to $104m, still higher compared to the same period last year.

Come the third quarter and it was almost carnage. Investment plunged 47pc QoQ and 68pc YoY to $55.4m — the lowest since Q1-2021. More than that, the period saw the biggest casualty of the new fundraising environment: Airlift, the most funded Pakistani startup, announced it was shutting all operations after its investors backed out. This was the same company that had first unlocked meaningful capital for the country.

In 2019, it announced a $12m Series A, with participation from First Round, one of the backers of Uber. Then in 2021, it bagged Series B of $85m — an eye-popping amount by local standards.



The post-mortem in the press and social media didn’t give a comforting picture. And to make things far worse, around a similar time, news reports of TAG — a regulated fintech with $17.5m in funding — forging its documents appeared. It raised serious question marks over both the underlying governance at startups and investors’ due diligence process. More importantly, it certainly didn’t induce confidence among foreigners who had very recently started exploring Pakistan as an investment destination.

Whether it was for these high-profile shutdowns, the global macros or our own weakening fundamentals, the pullback was hard to miss. The number of unique investors participating in Pakistani startup deals fell to just 52, the lowest since Q1-2021. And while the current quarter is yet to complete, it makes up for a dismal picture.

Only seven investments (excluding M&A) worth $13.9m have been disclosed so far. If it continues this way, it would be the worst quarter in terms of amount since Q1-2022 and joint lowest by deal count since Q2-2020.



Doomsday?
Based on all this information, it might seem like doomsday for the startup scene.

But there’s hope.

A number of positives have come out for the ecosystem towards the tail end of the year. For example, JS Group announced a partnership with 500 Startups, one of the biggest investors globally — thus unlocking a mix of local and foreign capital. Similarly, Duraid Qureshi of Hum Network and Naveed Sherwani of US-based RapidSilicon launched a $50m Pakistan-focused Katalytic Fund. Moreover, at least three local VCs are in the process of raising their second investment vehicle. All of it should bring in some much-needed liquidity to the market.

That said, most of Pakistan’s inherent issues remain and have raised the country’s risk premium, which is well beyond the control of any founder. The perennial external account troubles are hitting the fan as forex reserves are now not even enough to cover a month of imports. In this uncertain environment, even the more established businesses are struggling to keep afloat and continue daily operations, let alone early-stage startups.

 

[Clutch]

This is the real reason for Pakistan's Economic Woes

Pakistan continues to sink deeper into an ever-spiralling crisis that is entirely avoidable. There is a straightforward explanation for this: the military’s bloody-minded attitude. It has controlled every facet of life in the country and refuses to confine its activities to the primary role they are supposed to perform: protect the country’s borders. For the record, the military has failed miserably in fulfilling this primary responsibility.



Instead, it has barged into other domains for which it is totally unqualified. The mess that Pakistan faces today is the direct result of the military’s meddling in politics, economics, the judiciary and social spheres. It acts as an occupation army terrorizing people that dare to question its illegal intrusion in other spheres of life.



Pakistan’s latest bout of convulsion began on April 9, 2022 when Imran Khan’s government was ousted from power through an army-engineered coup. This was demanded by the Americans because Imran Khan wanted to make Pakistan truly independent. After years of chaos and disruption, Imran Khan’s government was beginning to make some headway in economic and social spheres. There was absolutely no justification for his removal from power.



He had steered the country out of economic doldrums. People were beginning to feel optimistic after years of despondency and frustration. All the economic indicators were positive. More importantly, Imran Khan initiated social welfare programs that helped cushion the desperately poor to provide them some relief. For this “crime”, he is being hounded and kept in appalling conditions in jail on totally bogus charges.



After ousting him from prime minister, the army installed a bunch of criminals and murderers in power whose 17-month stint has been an unmitigated disaster. While they are gone, Pakistan’s woes continue to multiply. True to their troublesome meddling nature, the army continues to manipulate the political, economic and judicial systems from behind the scenes.



There is supposedly a “caretaker” government whose sole function, according to the constitution, is to hold elections within 90 days. Yet few people believe there will be elections any time soon. Instead, there are grave fears that the army plans to cling to power indefinitely. As part of this plot, it is trying to destroy all the political parties and create a single party that it will control directly.



The men in khaki indulge in such destabilizing actions because they think they know everything. They don’t. They are not very bright although they loathe to admit this. The only reason they are able to get away with their crimes is because they have the guns and tanks.

They were provided such weapons, at enormous expense and by sacrificing the well-being of the people, so that they would defend the country against external enemies. They have failed to do so. In every war against India, their performance has been dismal.

Unable to fight the external enemy, primarily India that has made enormous progress economically, the army has turned its guns against the people of Pakistan. The people are treated with disdain while the army hides in high-walled gated communities across the length and breadth of the country. Consuming enormous resources of state, the men in uniform demand even more.

Let us see what the army, or more specifically the top brass (generals and brigadiers), stand for. They are completely subservient to the US. Almost all of them have properties in the US, Canada, Europe or Australia. Their family members have foreign citizenship. The army is nothing more than a mercenary force available for hire.



Destruction of the economy over the last 17-18 months is complete. Exports have dwindled because industrial production has stopped. Foreign exchange reserves are non-existent. So, what do these smart men plan to do? Sell state assets as well as mines, minerals and agricultural land.



The plans they have announced are mindboggling. Early last month, the army chief, General Asim Munir went around meeting businessmen in different cities (also see here) announcing that $75-$100 billion worth of investment will flow into the country over the next three to five years. And where will these dollars come from? Saudi Arabia, the UAE and Qatar, of course, as the general informs us helpfully. Why would they throw money into a sinking hole? The Arab rulers are no fools.



Pakistan’s own Bill Gates (or whatever successful businessman you fancy), general Munir says he has convinced the Arab rulers (he used the words, “told them”!) to part with their money and invest in Pakistan. What is he offering them in return?



The general says that the Saudis have agreed to invest $10-$12 billion in the Reko Diq gold and copper mine in Baluchistan. They have also agreed to set up a $10 billion refinery in Gwadar. Further, general Munir has said that the Arabs will invest in developing land for agriculture purposes. The army will provide protection and guarantee security.



It is important to look at these grandiose plans past the general’s blinkered view. Even if the Arab rulers agree to invest such huge sums—a big if—it will take years to materialize. After all, the refinery project has been talked about since 2009 and nothing concrete has materialized. The Riko Deq mine development is similarly problematic.



Barrick Gold owns 50 percent of the shares while the federal and provincial governments in Pakistan own the other 50 percent split 30 to 20 percent respectively. Who will divest their shares to hand them over to the Saudis? True, the mine’s potential is supposed to be about $4 trillion. This is a huge amount but realizing this potential is a major challenge.



When Asif Zardari was the president—this is no joke, Pakistan has had this mega-thief as its president—he sold the Reko Diq mine for $6 billion to Barrick Gold. Of course, he received a hefty bribe. It was the then chief justice Iftikhar Chaudhry who stopped the deal. Barrick Gold sued Pakistan and was awarded $9 billion in damages, money the country did not have.



Under Imran Khan’s government, the deal was renegotiated and the fine was averted. It is now back to the negotiating table and new players want to get their cut. The elite in Pakistan never learn; they are beyond reform.



There are other disasters looming. Donald Blome, the American ambassador operates like a viceroy. The inferiority complex-stricken Pakistani elite cannot imagine life without American approval. Blome struts about the country not only meeting political leaders, he has also met the election commissioner as well as the chief of Punjab police. It is a notorious outfit operated by criminals and murderers. Blome’s meeting with the police chief was interpreted as a green signal to continue the rape and murder of innocent people.



He even visited the Gwadar port on September 12 and met businessmen as well as political leaders promising to invest in the area. Gwadar was developed by China as part of the China Pakistan Economic Corridor (CPEC). It is an important component of China’s Belt and Road Initiative (BRI), a trillion-dollar project that links most of West and Central Asia with Russia and Europe.

America wants to scuttle the BRI and CPEC. Unfortunately, the Pakistani generals are willing accomplices in this disruptive plan. They would rather destroy Pakistan than incur America’s displeasure.



China is Pakistan’s neighbour; America is 10,000 kms away. Islamabad’s experience shows that the US has always used Pakistan and then abandoned it. Why would it act any differently today?



So, why are Pakistani generals so desperate to repeat the same mistake again and again? Pakistan’ tragedy is that the generals cannot see beyond their noses. They only think of the here and now, not what will happen two or five years down the line. Their ill-conceived plans are inflicting enormous harm on ordinary people and leading the country toward destruction.