The Path Out of Pakistan's Economic Crisis

[Olympus81]

I agree. Tax real estate and agricultural land above a certain threshold.

 

[lafete]

No one will give you money. In hard times, you only can depend on your own people.

There are 10 million Pakistanis living abroad. They are your best bet.
1) Impose a NICOP/Passport yearly tax. This should result in an immediate inflow of dollars
2) Develop thar coal mines on a war footing. This is the biggest coal reserve in the world. By next year it will output 12 million tons per year. Power generation, cement, fertilizer industries must use domestic coal.
3) fix the agriculture to stop import of wheat. There is no reason why an agriculture based country should be importing wheat.
4) Bring everyone into the tax bracket by imposing a small NIC yearly tax
5) Tax the 400 billion dollar real estate market. Currently the tax on a 2 kanal house anywhere in pakistan is 0.05% only. This is crazy!
6) Hand over control of PIA to overseas pakistani's. Impose a 100 dollar PIA investment tax and convert it to shares owned by overseas pakistanis. Once service starts to US, Can, Aus, UK, NZ, South-Africa, EU, middleast, PIA could be turned into a very profitable company.

 

[Baburfromsarmarkand]

Here are some suggestions for Sir Dar.
1. impose tax on overseas Pakistanis income. Have them declare their foreign assets and income tax slips. If they dont comply, ban them from the nation for life.
2. Talk to Iran, tell them we want a cut of that Baluchi oil they have been drilling, we all know they are taking some of it from our side. Get rid of their embassy if there is non compliance.
3. Get rid of PIA, sell all the planes and decomission the airline. Its a POS and will never make money.
4. Get rid of Steel mills, pak railways, all these white elephant projects - sell them to private individuals.
5. Get rid of 80% of ministers, Chat GPT can do better, and you might consider AI to run the nation.
6. No more free oil for ministers, UNLESS they opt for a 4 cyliner car like a civic or alto, no more V8

 

[epebble]

Good idea from an economist.

The case for sovereign default​

The case for sovereign default

The biggest impediment to sovereign debt restructurings is not economic but political.

www.dawn.com

 

[zn426]

Here are some suggestions for Sir Dar.
1. impose tax on overseas Pakistanis income. Have them declare their foreign assets and income tax slips. If they dont comply, ban them from the nation for life.
2. Talk to Iran, tell them we want a cut of that Baluchi oil they have been drilling, we all know they are taking some of it from our side. Get rid of their embassy if there is non compliance.
3. Get rid of PIA, sell all the planes and decomission the airline. Its a POS and will never make money.
4. Get rid of Steel mills, pak railways, all these white elephant projects - sell them to private individuals.
5. Get rid of 80% of ministers, Chat GPT can do better, and you might consider AI to run the nation.
6. No more free oil for ministers, UNLESS they opt for a 4 cyliner car like a civic or alto, no more V8

1. Don't threaten overseas Pakistanis with a good time. You want to drive them away entirely? You want to try to apply the danda to people who can simply walk away. Of course, if they belong to PDM party then of course all that should be done since they are in the country.
2. How about we finish the IP pipeline first? Sell it to Pakistani investors in the west. Then have Pakistan State Oil collaborate with the military to enforce Pakistani oil rights in Balochistan.
3. Might as well. 3 years ago I would have said PIA is salvageable. Now there's no forex reserves, so they can't even buy fuel for flights.
4. Deal
5. And every department underneath them. The rot goes all the way down to the bottom of the government. Get rid of this ridiculous blasphemy law and let Christians and HIndus have freedom of religion-muzzling them and denying them their rights hasn't worked. It will be a huge cost savings not having to enforce these laws.
6. No more free oil period, we can't afford it. Since I'm sure they've enriched themselves already they can afford fuel prices.

 

[_NOBODY_]

My recommendations:

1) Never try to manage the Rupee. Makes the exports uncompetitive.
2) Restrict dollar spending per person per year. It is too liberal
3) Start increasing import taxes on all manufactured items incrementally every year. This will force everybody to setup manufacturing in Pak.

I agree with everything that you have stated except the second point. Before I try to counter that I would like you to elaborate on your second point so I don't get anything wrong with my counter argument.

 

[_NOBODY_]

Other than usage on foreign education and business, any dollar spending (eg; shopping, travel) is a waste of foreign exchange. Local economy gains nothing in return.

Gold purchase is fine though, since it is an asset to an individual and keeps circulating in the economy when it is sold. Investment in foreign shares should be banned outright, since there is no guarantee of returns (unlike Gold which goes up most of the time).

$100,000 per year (or whatever is the number right now) allows too much wealth of nation to flow out through legal channels

Would imports count as dollar spending? If yes, I will disagree with you as this destroys the free market; consequently, this reduces competition and gives local producers protection. This protection disincentivizes innovation, innovation in our market mostly comes from foreign brands. Our banking sector is the prime example of this, almost all the innovation in our banking sector came from Western banks, Western banks left the Pakistani market after Pakistan went into the FATF grey list and this resulted in an almost complete lack of innovation in our banking sector until our fintech startups suddenly started receiving insane funding and started making a huge impact. My point is that free market is essential for innovation and without innovation you can't compete against the world.

@VCheng What do you think?

 

[VCheng]

Would imports count as dollar spending?

It depends on how those imports are being financed, obviously, hard currencies such as the USD versus other forms of financing such as barter, for example.

 

[epebble]

Here are some suggestions for Sir Dar.
1. impose tax on overseas Pakistanis income. Have them declare their foreign assets and income tax slips. If they dont comply, ban them from the nation for life.
Terrible idea. Confiscation does not work. far better to involve them in investment; Even better is use their skills. As many may have noticed, the brainiest Pakistanis may just be outside Pakistan.
3. Get rid of PIA, sell all the planes and decomission the airline. Its a POS and will never make money.

Just that Hotel in NYC will fetch a few hundred million dollars and take care of immediate needs for a few weeks. It is locked up, not earning anything, accumulating very heavy taxes and rapidly depreciating due to lack of maintenance. In a few years, it will become like that old embassy building in D.C. to be auctioned off for peanuts as an eyesore.

4. Get rid of Steel mills, pak railways, all these white elephant projects - sell them to private individuals.
5. Get rid of 80% of ministers, Chat GPT can do better, and you might consider AI to run the nation.
6. No more free oil for ministers, UNLESS they opt for a 4 cyliner car like a civic or alto, no more V8

 

[VCheng]

a few hundred million dollars and take care of immediate needs for a few weeks.

Pakistan probably needs more than a billion dollars per week.

 

[epebble]

Pakistan probably needs more than a billion dollars per week.

Yes, but the Delta (i.e. the shortfall between incoming and outgoing in steady state) is about half billion a week. So, that White elephant can keep the wolf from the door for another week. We are talking yard-sale (or eBay) now.

 

[_NOBODY_]

Developing countries are not "ready" for Western style free markets yet. Local businesses need all sorts of support initially.

Also, foreign companies can always be encouraged to setup plants via carefully planned import tariff structure, that goes up every year. Put tariffs on finished goods first and later on, even on components. You want access to 300 million customers? Build a manufacturing plant. If you don't, somebody else will.

To navigate the bureaucracy & managing workforce, foreign firms can be encouraged to enter the country via joint venture route, thereby improving the skillsets of local businessmen. Once a certain scale is achieved, exports too will happen. The Chinese did this for over two decades.

This solves the innovation problem. And no protection is offered to local businesses making substandard products. Foreigners are welcome to sell their high quality products via local plants.

Basically, whenever Pakistani citizen indulges in consumption, it has to help the local economy one way or the other (either import tax or local employment/capacity building). Else, such consumption should be discouraged.

The part that I highlighted is incredibly important as protection is currently being offered to a lot of local businesses that are making substandard products. The lack of protectionism will encourage FDI as the playing field will be levelled.

 

[Baburfromsarmarkand]

Just that Hotel in NYC will fetch a few hundred million dollars and take care of immediate needs for a few weeks. It is locked up, not earning anything, accumulating very heavy taxes and rapidly depreciating due to lack of maintenance. In a few years, it will become like that old embassy building in D.C. to be auctioned off for peanuts as an eyesore.

yeah what a waste of prime real estate. Running a hotel is one of the easiest business, you just outsource everything to a hotel management chain. But these Genuses prefer to let it rot. The US should force them to do something with it to sell it.

 

[epebble]

The US should force them to do something with it to sell it.

We have strict laws protecting private property. NYC will jump in only if it is considered unsafe or otherwise a nuisance (crime, drugs, prostitution, break-ins etc.) Otherwise, the huge property taxes will do the trick. If they can't pay the property taxes, the hotel will go into receivership for tax lien and then they can auction it off to realize the past due taxes.

 

[ghazi52]

.,.,,

https://twitter.com/x/status/1619605669744902144

4. All Government houses & govt cars to be finished,
5. All leases of Agricultural land to be finished. No patta system in agriculture
6. Open trade with India .
7. Start work on Turkmenistan-Afghan-Pakistan- India gas pipeline .
8.Haj, Umra Ziarat only by a taxpayer above 10 million .
Foreign travel in business class only for taxpayers above 10 million
9. No dual nationality for any govt. servant.
10. Compulsory closure of markets by 6 pm.
11. Abolish farcical transactions in the name of Islamic banking.
12. Apply Article 140A of local bodies.
13. Close FBR & empower PRAL, send employees of FBR on leave till retirement after keeping relevant in PRAL .
14. Abolish police, DMG and housing and place the same under Local Governments .
15. All military cants to be shifted away from cities .
16. Create a Federal land bank.

Financial emergency means acceptance of basic agenda as laid down above and no tinkering by people off and on. It means a consistent, pro Pakistan pro poor plan for 15 years. and Rationing at 50% rate if atta, lentils, sugar, rice, edible oil & tea.

https://twitter.com/x/status/1620071419328761857