Uncertain economy problems.

[Dalit]

FTA with China is terrible for most developing economies. The low value manufacturing goods that lower economies can produce is not something that China wants to import. Trade relationship with China is typically similar to colonial trade. Export resources (food or raw materials) to China and import all manufactured consumer goods from them. Blanket no tariff on import means it is extremely difficult for local manufacturers to compete.

Oh how terrible. China the bogeyman.
Instead we should all follow India's example of being an American stooge.

 

[Wood]

Oh how terrible. China the bogeyman.

Nope. I don't blame China for doing what is in their best interest. It is upto to other countries to find their way to not become a colonial trade colony of China. It is a very tempting prospect for consumers to prefer Chinese goods when per capita income is low. India also has a colonial trade relationship with China even without a trade deal with them. I shudder to think what would happen if some politician thinks it will be a good idea to sign a trade deal with China. Luckily, it is not likely to happen

 

[Dalit]

Nope. I don't blame China for doing what is in their best interest. It is upto to other countries to find their way to not become a colonial trade colony of China. It is a very tempting prospect for consumers to prefer Chinese goods when per capita income is low. India also has a colonial trade relationship with China even without a trade deal with them. I shudder to think what would happen if some politician thinks it will be a good idea to sign a trade deal with China. Luckily, it is not likely to happen

You sound like an American. Oh wait, you reside in the Canada. I count that as almost American.

 

[Wood]

You sound like an American. Oh wait, you reside in the USA.

I'm in Canada. But what does that have to do with anything?

 

[Dalit]

I'm in Canada. But what does that have to do with anything?

Yes. I changed it to Canada. You are almost American to me. Actually more loyal than the king. I have seen Canadians act more American than Americans LOL

Your location has everything to do with your anti-China paranoia. Now don't make me explain why this is the case.

 

[Wood]

Yes. I changed it to Canada. You are almost American to me. Actually more loyal than the king. I have seen Canadians act more American than Americans LOL

Your location has everything to do with your anti-China paranoia. Now don't make me explain why this is the case.

Canadians are unreasonably anti American to be honest. You'll know that if you live in Canada.

I'm certainly pro US. It is in the best interest of Canada and India the way I see it.

My statements about China though are opinions based on my perception of China's trade relationship with other countries. If you can reasonably refute what I say by citing how well China Pakistan trade has progressed after FTA, I'll concede. You will more importantly be educating passive readers about the flaw (if any) in what I say.

 

[Dalit]

Canadians are unreasonably anti American to be honest. You'll know that if you live in Canada.

I'm certainly pro US. It is in the best interest of Canada and India the way I see it.

My statements about China though are opinions based on my perception of China's trade relationship with other countries. If you can reasonably refute what I say by citing how well China Pakistan trade has progressed after FTA, I'll concede. You will more importantly be educating passive readers about the flaw (if any) in what I say.

The only reason I need to convey is that India, US and Western countries are generally speaking anti-China. That is not a secret to anyone.

 

[Wood]

The only reason I need to convey is that India, US and Western countries are generally speaking anti-China. That is not a secret to anyone.

Sure, but that does not mean that they are always without merit

 

[nope]

mullahs

army

establishment

 

[ziaulislam]

Because for decades and decades (yes decades) Pakistan has financed its growth through imports and consumption. What this means is that Pakistan (in one way or the other) has encouraged imports so that people can consume more, and this is one way to achieve growth. The problem with this approach is that Pakistan also needs to earn dollars to pay for these imports. But because Pakistan has been spending more than it can produce, everytime Pakistan's growth goes above 5% there is a crises of inflation and low reserves. We produce/export very little but want to import a lot. Each year we make the difference up with loans. The terms of these loans getting worse (higher interest rate) because our ability to pay back the loans becomes more suspect as our economy worsens.

In simple words there is no free lunch. Pakistan, as a country, has been living beyond its means for decades. American aid during the 80s and 2000s allowed Pakistan to persist in this "beggar" mode but you see the boom-bust cycle regularly. There was no boom cycle this time because we had no American aid this time. So Pakistan is going through a reality check this past decade.

Remember those loans we need to finance our country? IMF's role is to provide a small loan to Pakistan and more importantly certify to the rest of the world that Pakistan is good for loans because we are asking them to do reforms to fix their economy. Unfortunately, Pakistan has completed few IMF programs because:
1. We have unimaginative planners that ask IMF to give us policies without proposing our own
2. IMF recommends unpopular measures and Pakistan agrees first few years then leaves program without finishing reforms.
So what has been happening for decades is that IMF certifies Pakistan's goodness for loans, Pakistan takes tonnes of loans, then Pakistan abandons IMF program and doesn't do any of the reforms needed for fixing the structural problems of Pakistan's economy.

One of the reasons that successive Pakistani governments have been unable to do the difficult but necessary reforms is elite capture and the kinds of things our elite puts money in. Our elite (politicians generals judges businessmen malikriaztypes) have ensured laws such that there is little to no tax on property/land and these people are the biggest landowners and decision makers. An X amount of money invested in land produces nothing in the economy. The same X amount if used to start a factory can produce jobs and exports. Starting and running business is highly taxed and complicated compared to property. So everyone with money buys plots (I am sure you can relate). Land in Pakistan is an unproductive asset that can't be exported. Roughly speaking this real estate bubble is being funded by the loans being burdened on the poor Pakistan and the tax that they pay on petrol for example. Other countries also have elite capture: most famously South Korea. But their elite has invested into Hyundai and Samsung. Sure there is wealth inequality but the capital in the country is being used for productive things as opposed to Pakistan where it only fuels speculation nothing else.

Currenr crisis has nothing to do with 6% growth
First CAD this yr was still managble(lower then 2018 with economy 20-25% larger)


Second we have global commodity crisis ans covid crisis..just adjusting oil to 50$ you get a positive CAD

The crisis now is simply due to having not enougj time to build reserves(just 3 yrs starting from negative) and more imp ..inability to roll over old loans

 

[JamD]

Currenr crisis has nothing to do with 6% growth
First CAD this yr was still managble(lower then 2018 with economy 20-25% larger)


Second we have global commodity crisis ans covid crisis..just adjusting oil to 50$ you get a positive CAD

The crisis now is simply due to having not enougj time to build reserves(just 3 yrs starting from negative) and more imp ..inability to roll over old loans

It would be simplistic to blame it all on the current oil prices and commodity super cycle. Yes it has definitely made things super worse. No denying that.

But this isn't the first time that oil has been at this price. Our economy is especially weak because of the reasons that I've pointed out. There is a reason why our inflation is twice that of India. Unfortunately, the PTI government was unable to do any major structural reforms. And the expansionary budget given by Shaukat Tarin caused overheating according to Shaukat Tarin in October. Oil was $80 back then. He was literally saying what I said in my post. Other economies grow at 6%. We overheat at 6%. That's the problem. Sure it has come to the forefront because of global reasons but it is not the reason that we have these problems.


EDIT: Arguing that CAD would've been positive if oil was $50 is wishful thinking. And even if we accept this wishful thinking nudging our CAD to be positive isn't enough to put ourselves on the right track, albeit it's a start. I'm just saying it's a low bar that is only achieved with a mythical oil price. So what's the point? Stronger economies can obviously deal with these externalities better.

 

[Sayfullah]

desi raj

Doesn’t this prove all the anti army propaganda right then?
Doesn’t this also prove we never truly got independence and basically are run like a colony?
If “desi raj” is true then many claimed many things about this desi raj and if that is true than it’s very concerning.

 

[ziaulislam]

It would be simplistic to blame it all on the current oil prices and commodity super cycle. Yes it has definitely made things super worse. No denying that.

But this isn't the first time that oil has been at this price. Our economy is especially weak because of the reasons that I've pointed out. There is a reason why our inflation is twice that of India. Unfortunately, the PTI government was unable to do any major structural reforms. And the expansionary budget given by Shaukat Tarin caused overheating according to Shaukat Tarin in October. Oil was $80 back then. He was literally saying what I said in my post. Other economies grow at 6%. We overheat at 6%. That's the problem. Sure it has come to the forefront because of global reasons but it is not the reason that we have these problems.


EDIT: Arguing that CAD would've been positive if oil was $50 is wishful thinking. And even if we accept this wishful thinking nudging our CAD to be positive isn't enough to put ourselves on the right track, albeit it's a start. I'm just saying it's a low bar that is only achieved with a mythical oil price. So what's the point? Stronger economies can obviously deal with these externalities better.

Its not wishful thinking its simple maths
Oil is not going to stay at 120$ this artifical low supply state by blocking four largest oil producers isnt going to stay for ever

Exports and remittences growth outpaced imports FOR THE FIRST TIME in last 20 years

PTI didnt lag in refroms in its foreign stability part
Its biggets failure was reforms in taxation/revenue side and we all know why that happened..noone will allow any political party to tax the elite

 

[VCheng]

@PakFactor @VCheng @SQ8
Good question but there's a reasonable explanation. The "British Raj spiritual successor" moniker warrants more explanation.

Sorry but I received no notification for the mention. Please let me peruse the thread and post a bit later.

 

[VCheng]

So this makes me believe very strongly that IK is a project of the desi raj to have an internationally acceptable version of their views.

Oh boy. I have attracted a lot of animosity and unfair treatment simply for saying this.

So to answer your question:
why don't they care about their country enough to make the right decisions?

They care deeply about the country. They just don't believe that the people of Pakistan are smart enough to make decisions for themselves and they keep trying to control Pakistan in unsustainable and dangerous ways. Like a child holding on to a bird too tight because he loves it too much but doesn't realize that he's killing it.

Interesting that your advice comes to "they just need to let go", which sounds fine in theory, but truly a devil to think about implementation. That is the dilemma, even if they agree to let go, just how do they do it, and to whom? Decades of policies have left no other institution in any shape to bear this responsibility your solution is placing on them.

My views are simply to recognize the system for what it is in reality, and work with it wherever possible. That is far more feasible IMO.