Burger_King
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Never thought I would see the day but I have to agree with Dollar Dar on his comments on IMF as well as on Moody's hostile actions.
Given the challenges faced by Pakistan due to floods, IMF should be showing more flexibility when dealing with Pakistan. Government, clearly, cannot deliver on targets committed to IMF before the flood. Likewise, Moody's acted with undue haste when it downgraded Pakistan. Before issuing a negative rating action, ratings agencies usually give the issuer, in this case Pakistan, an opportunity to respond to concerns of the ratings analyst. Based on the response from the issuer, rating agency decides whether to go ahead with the downgrade or not, sometimes giving the issuer time to show if targets can be achieved within a specified time. Moodys did no such thing when it last downgraded Pakistan. Moodys actions were clearly mala fide. So Dar was right in expressing anger but not in the way that he did because he made Pak look like a banana republic.
But question is should the actions of gora financial institutions come as a surprise to us or to Dar? No, because goal of regime change operation was to weaken Pakistan. The whole purpose of RCO would have been defeated if IMF had relaxed the terms and acted in a manner which would be supportive for Pakistan's economy in the long run. Dar is simply a tuttoo who unwittingly helped goras to achieve their nefarious ends.
Now going back to Dar and his backers, while these people are corrupt and borderline ghaddars, they do not want to see a bankrupt Pakistan partly for reputational reasons and partly because they still derive support from Pakistan based tubquas. Dar and his backers genuinely believed that they would get gora backing if they removed IK's government. But goras had other plans which explains Dar's hysteria.
As for Pakistan foreign reserves, picture as well as trend is negative but it is not the end of the world. Reserves are like savings which should not be touched. And saying reserves are negative is like saying an individual is bankrupt because mortgage on individual's house is multiple times individual's bank balance. Reality is mortgage is paid through income, usually salary. Same is the case with import Pakistan requires in order for its economy to function. Like most non-oil producing developing countries, Pakistan has to borrow money to finance part of imports because Pakistan's export plus remittances do not fully cover import requirements which is only going to increase given Pakistan's demographic profile.
Under IK's government, economy had reached a state of equilibrium. IK's government had earned the trust of foreign investors as indicated by Eurobond issued by Pakistan earlier this year. More importantly, IK had managed to convince overseas Pakistanis to invest in Pakistan. But then RCO happened and its consequences are what we see today. Foreign investors remember the folly committed by Dollar Dar during his last tenure and ran for the hills. Mufta managed to right the ship to a certain extent but reappearance of DD was the last straw. Likewise, overseas Pakistanis, having an understanding of how civilized societies function, dont want to invest in society where likes of Rana Sanaullah hold unchecked power.
How did things get to this stage? I still cant understand why army high command would want to see a bankrupt Pakistan? Surely army cannot operate at anything close to normality when oil is hard to come by?
Anyone who can solve the puzzle of army's "neutrality" in the face of economic distress will do us all a huge favour.
Given the challenges faced by Pakistan due to floods, IMF should be showing more flexibility when dealing with Pakistan. Government, clearly, cannot deliver on targets committed to IMF before the flood. Likewise, Moody's acted with undue haste when it downgraded Pakistan. Before issuing a negative rating action, ratings agencies usually give the issuer, in this case Pakistan, an opportunity to respond to concerns of the ratings analyst. Based on the response from the issuer, rating agency decides whether to go ahead with the downgrade or not, sometimes giving the issuer time to show if targets can be achieved within a specified time. Moodys did no such thing when it last downgraded Pakistan. Moodys actions were clearly mala fide. So Dar was right in expressing anger but not in the way that he did because he made Pak look like a banana republic.
But question is should the actions of gora financial institutions come as a surprise to us or to Dar? No, because goal of regime change operation was to weaken Pakistan. The whole purpose of RCO would have been defeated if IMF had relaxed the terms and acted in a manner which would be supportive for Pakistan's economy in the long run. Dar is simply a tuttoo who unwittingly helped goras to achieve their nefarious ends.
Now going back to Dar and his backers, while these people are corrupt and borderline ghaddars, they do not want to see a bankrupt Pakistan partly for reputational reasons and partly because they still derive support from Pakistan based tubquas. Dar and his backers genuinely believed that they would get gora backing if they removed IK's government. But goras had other plans which explains Dar's hysteria.
As for Pakistan foreign reserves, picture as well as trend is negative but it is not the end of the world. Reserves are like savings which should not be touched. And saying reserves are negative is like saying an individual is bankrupt because mortgage on individual's house is multiple times individual's bank balance. Reality is mortgage is paid through income, usually salary. Same is the case with import Pakistan requires in order for its economy to function. Like most non-oil producing developing countries, Pakistan has to borrow money to finance part of imports because Pakistan's export plus remittances do not fully cover import requirements which is only going to increase given Pakistan's demographic profile.
Under IK's government, economy had reached a state of equilibrium. IK's government had earned the trust of foreign investors as indicated by Eurobond issued by Pakistan earlier this year. More importantly, IK had managed to convince overseas Pakistanis to invest in Pakistan. But then RCO happened and its consequences are what we see today. Foreign investors remember the folly committed by Dollar Dar during his last tenure and ran for the hills. Mufta managed to right the ship to a certain extent but reappearance of DD was the last straw. Likewise, overseas Pakistanis, having an understanding of how civilized societies function, dont want to invest in society where likes of Rana Sanaullah hold unchecked power.
How did things get to this stage? I still cant understand why army high command would want to see a bankrupt Pakistan? Surely army cannot operate at anything close to normality when oil is hard to come by?
Anyone who can solve the puzzle of army's "neutrality" in the face of economic distress will do us all a huge favour.
