what would Happen to a Country if its Loan is Written off ?

[Azadkashmir]

NOT Practical .... U cannot Turn Steel / Iron into Oil by International Barter .. Not specially with Negative Trade Deficit ..

If u Print Your OWN currency and it is Not link to Any international Currency .... it will not gain the trust of Users (For Sure Not the International Users, thr is a Reason Most of the Dealing is Done into USD)

As for Half Wages ... How come it makes difference when the ratio is halved by Both Traders ... the eventual Ratio will stay 1/1..

How will u trade a Shoe to a Dinner Set .. who will decide the Pant is Cheaper or costlier thn the Shoe ... how the Whole sake Market will work in barter ... how will the Storage will happen ... like i do not need a dinner set but i want to sell the shoe ... if i sell it anyway & keep the Dinner set , how will i store & sell that ...

What ABout Taxes .. how govt will perform the Road Construction, how she will collect Taxes from people and Pay to Contracter who need to pay it to Labour ... the Transfer & shipment of the Amount of Goods ..

Read a little About BARTER Trade even on Wiki & u will knw how it is Not possible at ANY LEVEL ...

Also Printing own & own Money ... Read About Zimbabwe

okay what is your suggestion/solution?

 

[NHUDA]

Nawaz Sharif ki Tajarbakar team said same

a) We will not take loan
b) We will break the KASHKOL
c) We will end electric crisis in Pakistan 3 months
d) We will build Transit in every city
e) We will reduce the Inflation

However reality

a) Failed Energy projects
b) More loan from IMF
c) Loan to pay Loan
d) Subsidies to poor becasue they can't afford roti
e) Cancellation of bullet train plan
f) Ruppee is 108 ruppee to dollar


In 90's he gave Pakistan Yellow cab, his idea was all unemployed ppl should become taxi drivers , and as result in billions were given in subsidy to allow car loans , the cars went out in 4-6 years

Ameer Ul Momeenin Nawaz Sharif , now wishes to be called His Excellency

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If aperson come to You & says I m Selling a Plot on the Moon give me a Million Dollars & i'll give U a Paper .... & U Buy it .. who is the MORON .. You or the Person selling paper & making Bucks ....

At this Moment ... it is Impossible to Not Take Loan (even to Pay Loan), Break Kashkol, & end Electricity Crisis, those who Fell for THAT .. have Themselves to Blame !

Inflation is on all time low .. if only u know the difference between Inflation & Currency Value !

It is Rich coming that Same PM is Flogged left Right ABove For Making Metro as Well as Also criticized Not Making a Highly Ambitious Super Tech Bulet Train ...

 

[ajpirzada]

I am not that good at understanding these economic matters, So just wanted to know from guys here who understand these things.
So my question is what effect will it have on Pakistan economy if all of its debt is written off(Which i think is round about $90 billion)?

debt servicing will end. currently around 40% (i think) of our budget goes to debt servicing. most of the new debt we take is to pay back our old debt. now you can imagine what will happen when all this money is spent on development...

also new debt becomes very cheaper if your existing debt is very less.

 

[NHUDA]

okay what is your suggestion/solution?

Already Mentioned in detail in above Comments ... below is a summary

Bring FDI & Increase GDP ...
Increase Govt. Revenue by Tax Reforms (Not Increase But Reforms)
Reduce Debt to GDP ratio so that in First Stage thr will be no need to Take Loan to Pay Loan ....
In case of Continuous Eco Growth Eventually we can be at a stage where May be will not need loan ...
thn Pay Back the Loan (Prinicipal Amount) as it matures
& thn On run Only Project Specific Budget Deficit ...

I have Mentioned here the Process in compartmentalized way but technically it will run with an over lap & this no Easy or Quick Solution to this ... THERE is no easy Way out ... it would take Decades of Sustained Growth to come out of this Mess ... Technically what PMLN was doing should have been good strategy (in essence) ... but once again thr Incompetency to complete the circle of economic revival as above is making it more & more of a MESS !!!

Oh ... but as Always .... God Help Us ... No ?

 

[Azadkashmir]

WHAT ABOUT BRICS ???

 

[AZADPAKISTAN2009]

 

[Grevion]

Man i came around this thread so late.
If Pakistan debts are written off then Pakistan can have a surplus budget. Moreover the pressure of paying interest and principle won't we their so the Pakistani leaders can invest more on infrastructure and security along with investment on skilled and efficient labor force which in turn will attract foreign investment developing your industrial sector which will earn your govt. revenue by taxes and trade. Given that corruption is minimal.

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amazing work of Pakistani netizens

 

[rubyjackass]

That is an interesting thought experiment. There is foreign debt and public debt. Can someone post the figures for both?

 

[FaujHistorian]

USA can't just keep on printing dollars indefinitely. The more money they print, the more they offset the market and global demand for the dollar decreases.

Well said.

However we must realize that dollar is hard currency as opposed to rupee being soft currency.

Dollars are needed the world over. And thus USA has a lot of global demand to fill by printing more dollars.

We are living in an American age,
just like way back then, people were living in Roman Age, and before that in an Egyptian age.

In each of these eras, the dominant power had ALMOST limitless cash
AND the rest of the world had never ending demand for that cash.

if Americans do not goof up big time (and I doubt they will), dollar will be printed on an on an on for at least another 1500 years. Sometimes less and sometimes more, but it will be printed. And the world including Chinese and Indians will continue hoarding it.

peace

That is an interesting thought experiment. There is foreign debt and public debt. Can someone post the figures for both?

What really matters is the HARD currency debt aka dollar debt.

And by the way, OP is a doofus about world economy.

He doesn't understand that Pakistan like any other country needs lots of dollars every minute of every hour of every day of every week of every month of every year.

But we as a nation refuse to work hard like Indians, Chinese, and South Koreans.

Hence we must borrow dollars to pay for oil, tea, and other stuff,

we must borrow dollars
Because we don't to work and earn dollars.


we must borrow dollars
Because we don't to work and earn dollars.


we must borrow dollars
Because we don't to work and earn dollars.


we must borrow dollars
Because we don't to work and earn dollars.


we must borrow dollars
Because we don't to work and earn dollars.

Did I say it enough?

May be not!

So Here I say it again.


we must borrow dollars
Because we don't to work and earn dollars.


we must borrow dollars
Because we don't to work and earn dollars.


we must borrow dollars
Because we don't to work and earn dollars.


we must borrow dollars
Because we don't to work and earn dollars.

Get it OP? @Gamer-X

Get it?

 

[Icarus]

In a hypothetical scenario if usa decides to change its currency from dollar to euro and decides to write off its debt by printing dollars and both happens at same time what will be its effect on american and global economy ?

The dollar is the mainstay of international trade and commerce, the day the US decides its phasing out the dollar in favour of the Euro (which is a far stretch, mind you), the International Economy will cave in on itself and cease to exist.

 

[Kaniska]

Not much as our politicians will find some other ways to be corrupt and eat up the treasury.
Btw you can compare malaysia before and after Foreign dept was payed off.

Agreed...These politician will take new loan and take away more money to their swiss accounts.

 

[FaujHistorian]

Agreed...These politician will take new loan and take away more money to their swiss accounts.

Well corruption is a huge issue but it gets much more credit than it deserves.

Pakistan uses $40 billion a year MINIMUM.

Politicians siphon out may be may may be may be 200 million dollars. MAXIMUM

about 0.5 percent.

Meaning you earned 100 dollars in a day.
And somehow you end up wasting (spending) 50 cents on baying a rotten peace of fruit.

Hope you get things in perspective now.

 

[indianBong]

In order to balance currency value, countries choose to "gold back" their currency. The system serves as a means to ensure that the currency value remains stable, sort of like retaining balance on a scale. If one side is lighter, you can remove some weight from the other side to equalize the balance in simpler terms.
Just like that, you can release some of your gold into the market in order to drive down prices and increase buying if your currency is at risk of taking a dip.

Wel sir, one question... think of a scenario where govt finds a gold mine somewhere in country...what will be the effect on economy if tonnes of gold added to national reserve??

 

[Icarus]

Wel sir, one question... think of a scenario where govt finds a gold mine somewhere in country...what will be the effect on economy if tonnes of gold added to national reserve??

Finding a gold mine and actually building up gold reserves is an entirely different matter, lots of African countries have huge gold reserves, Pakistan has Saindak but there has been little effect of these resources. If however, such a resource is extracted then it can help the country earn good foreign exchange.

 

[Haroon Syed]

Sir, what is your evidence for claiming that global demand for USD decreases with increased supply? The world has taken up all the dollars it can be supplied with, thus far.

Back to the topic, Pakistan can always default on its loan repayments, but that decision will come with its own costs.

This is what my question is. I cannot see American dollar being devalued.