Personal Analysis: Pakistan Did mistake in priorities of CPEC projects

[nahtanbob]

"industrialization" is a very vague term. It is open to subjective interpretation and different people will have different ideas about it.

Personally for me (coming from the Late Dr. Zafar Altaf, former Secretary of Agriculture), the central issue is to develop first a steel industry. The 1960s plan was a rail line between a coal producing area connected to an iron ore producing area. This would create a powerful steel industry that would be globally competitive.

building a steel mill is one thing. having a competitive steel industry is another
pakistan has no iron ore, no high grade coal. why blow your FOREX on steel mills ?

 

[RIP Pak LAW]

No, power projects were indeed the priority and was addressed nicely by pmln. Though they included some wasteful projects like orange train and some super highways which are definately not the priority.

 

[shahbaz baig]

I believe this will eventually be addressed on demand.

There is already surplus electricity the demand should be laid down the transmission lines & developing of new SEZs with availability of electricity by laying down the new transmission lines.

 

[Nilgiri]

I think we did biggest mistake to priorities the CPEC projects. We should have done three things first.
1. Hydro dams
2. Transmission Lines to announced SEZs.
3. Industrialization.

For increasing exports, Pakistan needs industrialization, and for competitive industries we need cheap electricity, friendly business environment so that we could have competed regionally & then globally because of cheap total cost of products but Pakistan focused on motorways, roads, coal/wind & some hydro energy plants instead of completely focusing on big hydropower dams. (This is the biggest fault but really easy to understand). We should have worked on cheap hydro energy first since 2013. So today perhaps we will be exporting some goods, products.

Pakistan & China are still unable to build any successful SEZs yet because feasibility of final production cost is high even for textile if compare with Bangladesh & India. We have totally failed to resume our textile industry yet then forget about other industries.

I agree overall, please read my post here:

https://defence.pk/pdf/threads/why-...ation-in-pakistan.618116/page-8#post-11467460

...there should have been focus on production units and worker training/discipline etc etc as much as possible within Pakistan existing environment rather than the argument that environment should be made perfect first (by way of even more loans there). I mean no way segregated captive power supply to (basic MVA) exporting industry zones should cost billions of dollars if you focus in and design well (just like China itself did in the coastal factory areas during early phase of its export model in the 80s)...if the narrative being used (for all these loans) is that pakistan energy (esp electricity) and transport macro - infra is too weak.

Then over time as you get the hard buffer materialised and good stead momentum in capital investment (i.e keeping at 25% and higher at least) and steady forex inflow from the actual in-demand activities you can generate with your labour+business pool......then you can go for branching out the infra into more + better (like China has done with its vast cash surplus stockpile more recently).

You should not go for too much infra loan while you are cash (current account) deficit country. The priority should be always to balance that deficit and balance the loan intake being used to keep it that way FIRST by becoming more relevant/productive to what earns you the foreign exchange in first place.

Pakistan must be wise here...head rush emotion of "solve" its macro infra (through loans) before it can pay its way as it is now is quite foolish strategy. Just like earlier more global loans were used to prop up its PKR exchange rate to keep consumption at where it was (rather than allow market pressure to naturally help to spur savings).

Those that are lot better off than you (be they inside or outside your country) often want you to just consume status quo or take their loans/narrative first thing.....what they dont want you to do is save, tighten your belt and get to work to prove yourself (and be willing to take the short term hit whatever it is)....and actually learn how they did it themselves....because you just may turn into a competitor for them too (on whatever issue) long term.

Always challenge any narrative and think for yourself but work hard. Never accept anything for granted whatever the "good intention" claim is...and deflect the thinking to another and slack off and meekly accept some bigger richer type (inside playing political strings game or outside giving you loans and that "infra first whatever the cost" solves everything magically when they didnt do that themselves) knows better and thus will auto-guide you in some beneficial way. If you dont think, someone else does it for you.

@Sugarcane @Indus Pakistan @Oscar @ziaulislam @That Guy @MUSTAKSHAF @OsmanAli98 @farhan_9909

 

[shahbaz baig]

building a steel mill is one thing. having a competitive steel industry is another
pakistan has no iron ore, no high grade coal. why blow your FOREX on steel mills ?

This is just an accuse. Pakistan have both reserve iron ore & coal with good quality. But there is no kick backs I think.

 

[xyxmt]

Remember initial CPEC design: hamarey pass se ne guzra to tumhari ma bhen aik ker dain gye
CPEC wahan se kyun guzar raha hay, usey 5 mile more ke merey district se le ke jao

This is why education is must before you invest on anything else

 

[Indus Pakistan]

This is just an accuse. Pakistan have both reserve iron ore & coal with good quality.

I have both of them in my garden. but can I set up a steel mill? No. Quality, quantity, accessibility are critical. By that measure Pakistan in effect has no coal or iron that meets these benchmarks.

I think Pakistan does not steel mills. But they will have to import coal/iron at zero duties and if ran efficently to as good if not better then global standards it would work. But can we? Pakistan Steel is testimony to that.

 

[Sine Nomine]

I agree overall, please read my post here:

https://defence.pk/pdf/threads/why-...ation-in-pakistan.618116/page-8#post-11467460

...there should have been focus on production units and worker training/discipline etc etc as much as possible within Pakistan existing environment rather than the argument that environment should be made perfect first (by way of even more loans there). I mean no way segregated captive power supply to (basic MVA) exporting industry zones should cost billions of dollars if you focus in and design well (just like China itself did in the coastal factory areas during early phase of its export model in the 80s)...if the narrative being used (for all these loans) is that pakistan energy (esp electricity) and transport macro - infra is too weak.

Then over time as you get the hard buffer materialised and good stead momentum in capital investment (i.e keeping at 25% and higher at least) and steady forex inflow from the actual in-demand activities you can generate with your labour+business pool......then you can go for branching out the infra into more + better (like China has done with its vast cash surplus stockpile more recently).

You should not go for too much infra loan while you are cash (current account) deficit country. The priority should be always to balance that deficit and balance the loan intake being used to keep it that way FIRST by becoming more relevant/productive to what earns you the foreign exchange in first place.

Pakistan must be wise here...head rush emotion of "solve" its macro infra (through loans) before it can pay its way as it is now is quite foolish strategy. Just like earlier more global loans were used to prop up its PKR exchange rate to keep consumption at where it was (rather than allow market pressure to naturally help to spur savings).

Those that are lot better off than you (be they inside or outside your country) often want you to just consume status quo or take their loans/narrative first thing.....what they dont want you to do is save, tighten your belt and get to work to prove yourself (and be willing to take the short term hit whatever it is)....and actually learn how they did it themselves....because you just may turn into a competitor for them too (on whatever issue) long term.

Always challenge any narrative and think for yourself but work hard. Never accept anything for granted whatever the "good intention" claim is...and deflect the thinking to another and slack off and meekly accept some bigger richer type (inside playing political strings game or outside giving you loans and that "infra first whatever the cost" solves everything magically when they didnt do that themselves) knows better and thus will auto-guide you in some beneficial way. If you dont think, someone else does it for you.

@Sugarcane @Indus Pakistan @Oscar @ziaulislam @That Guy @MUSTAKSHAF @OsmanAli98 @farhan_9909

That whole idea from start wasn't good.

 

[Crusher]

Hi,

A country that burns natural gas in motorcycles---rickshaws and cars---its fate is doomed---when it cannot supply natural gas to the industry---.

This fool of a nation has destroyed its industry while people burnt this precious product to move around---.

I was watching a talk show about economic situation of pakistan and one of the speakers said that we used to have industrial manufacturing generating 24 % of our GDP until 2000, but post 2000 it started declinging gradually and now in 2018/2019 our industrail manufacturing sector only contributes 12 % to our GDP, this clearly shows that how successive governments in the past 2 decades have fukked up our national industrial manufacturing sector through subsidized cheap consumer imports (mainly from china) and overall bad policies towards industry and manufacturing.

 

[American Pakistani]

Hi,

A country that burns natural gas in motorcycles---rickshaws and cars---its fate is doomed---when it cannot supply natural gas to the industry---.

This fool of a nation has destroyed its industry while people burnt this precious product to move around---.

Not to mention these fools asking for more subsidies on gasoline whose importing is a huge burden on forex. The gasoline prices are way lower than countries like US, China, India, Bangladesh, Vietnam, etc. 220 Million population and importing almost each and everything.

 

[Crusher]

Not to mention these fools asking for more subsidies on gasoline whose importing is a huge burden on forex. The gasoline prices are way lower than countries like US, China, India, Bangladesh, Vietnam, etc. 220 Million population and importing almost each and everything.

I think you should use the word "petrol" because no one calls petrol as "gasoline" in pakistan and no one in pakistan will understand what you mean by gasoline.

 

[Nilgiri]

building a steel mill is one thing. having a competitive steel industry is another
pakistan has no iron ore, no high grade coal. why blow your FOREX on steel mills ?

Agree, its best Pakistan import cheap quality steel (esp with economy of scale China has unlocked on it to drive prices really low now), process it into a finished good (thats where the real MVA addition happens)...and then consume/export the product.

This creates tons more productive value and jobs than keeping a govt steel mill afloat with taxpayer.

Taxpayer money in Pakistan must be treated 10 times better than gold if you ask me.

 

[nahtanbob]

Agree, its best Pakistan import cheap quality steel (esp with economy of scale China has unlocked on it to drive prices really low now), process it into a finished good (thats where the real MVA addition happens)...and then consume/export the product.

This creates tons more productive value and jobs than keeping a govt steel mill afloat with taxpayer.

Taxpayer money in Pakistan must be treated 10 times better than gold if you ask me.

Pakistan need to focus on low end stuff - textiles, farm products before they can build both physical and human infrastructure to compete on mid/higher end products

 

[Nilgiri]

I have both of them in my garden. but can I set up a steel mill? No. Quality, quantity, accessibility are critical. By that measure Pakistan in effect has no coal or iron that meets these benchmarks.

I think Pakistan does not steel mills. But they will have to import coal/iron at zero duties and if ran efficently to as good if not better then global standards it would work. But can we? Pakistan Steel is testimony to that.

Its best Pakistan focus on low capital intensive industries first. Steel is a huge capital sink for big surplus economies to play in...headwinds too strong for pakistan to make any productive return there if you ask me.

Best Pakistan learn from bangladesh, just import cheap capital (sewing machines) and organise the labour into forex export return zones. You get far more return easily that way.

For industry more broadly, investigate what is the capital needed for each dollar of return. Making stuff out of steel is always lot more profitable than making the steel itself.

 

[nahtanbob]

This is just an accuse. Pakistan have both reserve iron ore & coal with good quality. But there is no kick backs I think.

Pakistan is #40 on the list
https://en.wikipedia.org/wiki/List_of_countries_by_iron_ore_production

https://en.wikipedia.org/wiki/Coal_by_country

It is not that Pakistan cannot import iron ore/coal & make steel
Is that the best use of capital ??