Pakistan Economy Updates

[Bilal Khan(Quwa)]

Well isn't defence spending one of your major budget eater ,some independent think tanks said that your defence budget is understated , and pensions etc kept out to make it look small .

And defence spending if done in indigenous development and production can be really helpful .

There's a massive 'public sector development' budget that goes into infrastructure programs. Not much goes into auditing those and explaining what the prime benefit of most that expenditure actually is. In fact, year-after-year you'll find the national auditors raise alarm bells about unaccounted spending (no records or controls) of that budget. But yes, the defence budget is also uncontrolled. The sum in of itself isn't the issue, but we don't really know where it's going.

 

[Nilgiri]

I remember co-authoring an internal think-tank paper with a couple of Pakistani economists 12 years back arguing how to solve the account deficit issues. Simply put, we had advocated for a market protection program that forces outside brands to manufacture domestically.

So, for example, if you're Toyota and want to sell cars and trucks in Pakistan, you need to source 51% of the car's value domestically. We know that some companies go 70-90% value sourcing in India, but we kept ours super flexible at 51%. You'd be surprised to know that even stupid things like interior trim and seating materials were being imported into Pakistan!

The rationale was that Pakistani cars service the local market without torpedoing our hard currency and, potentially, produce hard-currency gains by exporting cars to Central Asia. We then asked for combining this with a concerted investment in education and skill-building (without taking a dime from defence).

We laid out how to get the revenue for it. The idea was that sustained investment in education and snowballing market protection would result in an industry that can one day absorb more complex production work. Granted, it wasn't a tier-one economic policy paper. After all, you're talking about three 20-21-year olds who are just trying to complete their graduate degrees. But I swear to this day, the research, data analysis and other inputs of that paper is more thorough than the papers the Pakistani gov't and armed forces are making today. I will bet that this paper uses the term "regression analysis" more than an entire year's worth of GOP economy papers.

Reads all too familiar to me.

Pak-origin buddy of mine (he is born in Canada though, only nominally identifies as Pakistani past it)....his father and I developed a valuable friendship....he is a mentor to me in quite a number of ways.

His son (my bud) is very intelligent too (apple doesnt fall far from tree), he worked on a space design project alongside me for couple years....some of my best formative years (looking back now) for project work in my domain....the contacts and friends I made. That is how I eventually made acquaintance with his father.

Anyway his father (intellectual heavyweight of high caliber) went through quite similar frustrating process....he laid things out on the table for branching Pakistan industrially in viable human resource approach from the bottom....and what can be done in the interim etc. He persisted at it with both zia admin and then 90s (sharif bhutto etc)....till he finally realised he was beating the proverbial dead horse again and again....and eventually was noticed by a foreign MNC who took his talent to foreign shores (eventually ending up here in Canada where his youngest boy was born).

Concerning the GOP papers etc.... I did deep delve (when the interest did occupy me and there was environment of relative good faith in PDF still) on number of issues.

There is good quality+competence there too if one looks deep enough (filtering out the noise padded filler to find the diamonds of worth)....I mentioned a young female economist to @VCheng in passing convo....this is 2nd or 3rd time I am bringing her up again without naming her (as I have forgotten).

I will try rectify that later, probably a deep search in the PDF archives might help me....if memory serves me right, there is good chance "jungibaaz" was having a good exchange on the matter with me (whatever the matter was in Economics)....and I think I pointed out her paper and some others at SBP "core quality" level.

Please do say hi for me (if you can) ....to jungibaaz my old friend there...

Anyway I will have to look all that up again...she did a very good frank analysis, I was most impressed.

But it is again case of her and others like her being stuck in the bottom half of SBP and other such control lever organisations.

They have to jostle each day with the "on the ground" Bajwa pizza enterprises, locked drawers, "please take a number, we will be with your shortly"...."dont call us, we'll call you" and all of that stuff....and speak in hushed tones and euphemisms...while they wait and hope....

I told vcheng ppl like her stay at their prime in Pakistan, instead of simply taking a foreign bank gig of their selection.....and cpl decades of best of their life is eventually squandered, like those that did so before them (like my mentor).

The DHA does not let them rise vertically to do anything....precisely because they are competent (and thus inevitably perceived as contrarian).

Then it becomes a matter of understanding the DHA psyche and why it has formed that way....and that is longer story...and it does not need me to tell to you I feel.

You see it all really talked about deeply by folks like Hoodbhoy....his english is great, but in the urdu stuff he really brings out the deepness of what ails Pakistan.

 

[Bilal Khan(Quwa)]

Reads all too familiar to me.

Pak-origin buddy of mine (he is born in Canada though, only nominally identifies as Pakistani past it)....his father and I developed a valuable friendship....he is a mentor to me in quite a number of ways.

His son (my bud) is very intelligent too (apple doesnt fall far from tree), he worked on a space design project alongside me for couple years....some of my best formative years (looking back now) for project work in my domain....the contacts and friends I made. That is how I eventually made acquaintance with his father.

Anyway his father (intellectual heavyweight of high caliber) went through quite similar frustrating process....he laid things out on the table for branching Pakistan industrially in viable human resource approach from the bottom....and what can be done in the interim etc. He persisted at it with both zia admin and then 90s (sharif bhutto etc)....till he finally realised he was beating the proverbial dead horse again and again....and eventually was noticed by a foreign MNC who took his talent to foreign shores (eventually ending up here in Canada where his youngest boy was born).

Concerning the GOP papers etc.... I did deep delve (when the interest did occupy me and there was environment of relative good faith in PDF still) on number of issues.

There is good quality+competence there too if one looks deep enough (filtering out the noise padded filler to find the diamonds of worth)....I mentioned a young female economist to @VCheng in passing convo....this is 2nd or 3rd time I am bringing her up again without naming her (as I have forgotten).

I will try rectify that later, probably a deep search in the PDF archives might help me....if memory serves me right, there is good chance "jungibaaz" was having a good exchange on the matter with me (whatever the matter was in Economics)....and I think I pointed out her paper and some others at SBP "core quality" level.

Please do say hi for me (if you can) ....to jungibaaz my old friend there...

Anyway I will have to look all that up again...she did a very good frank analysis, I was most impressed.

But it is again case of her and others like her being stuck in the bottom half of SBP and other such control lever organisations.

They have to jostle each day with the "on the ground" Bajwa pizza enterprises, locked drawers, "please take a number, we will be with your shortly"...."dont call us, we'll call you" and all of that stuff....and speak in hushed tones and euphemisms...while they wait and hope....

I told vcheng ppl like her stay at their prime in Pakistan, instead of simply taking a foreign bank gig of their selection.....and cpl decades of best of their life is eventually squandered, like those that did so before them (like my mentor).

The DHA does not let them rise vertically to do anything....precisely because they are competent (and thus inevitably perceived as contrarian).

Then it becomes a matter of understanding the DHA psyche and why it has formed that way....and that is longer story...and it does not need me to tell to you I feel.

You see it all really talked about deeply by folks like Hoodbhoy....his english is great, but in the urdu stuff he really brings out the deepness of what ails Pakistan.

Pakistanis eventually realize that our biggest enemies are simply other Pakistanis. Despite what we may say with our words on forums, we expend far, far more energy squabbling with each other than any Indian, American, or Israeli. The results (or lack thereof) in our economy, industry, science R&D, technology growth, etc all speak to this fact. Our top Pakistanis are those who triumphed over other Pakistanis (i.e., politicians, generals, and so on), not any outside power or great insurmountable challenge. IK was a hope, but he couldn't walk his talk. When he was shown the same pressures as preceding politicians, he had the choice to expose the entire system by (1) walking away from it and (2) telling the public exactly who these shady characters are once and for all. If he had done so, he would've torpedoed the entire establishment's credibility in the eyes of the public. Yet, he didn't. He stuck around in the system and became a part of it.

 

[VCheng]

Pakistanis eventually realize that our biggest enemies are simply other Pakistanis. Despite what we may say with our words on forums, we expend far, far more energy squabbling with each other than any Indian, American, or Israeli. The results (or lack thereof) in our economy, industry, science R&D, technology growth, etc all speak to this fact. Our top Pakistanis are those who triumphed over other Pakistanis (i.e., politicians, generals, and so on), not any outside power or great insurmountable challenge. IK was a hope, but he couldn't walk his talk. When he was shown the same pressures as preceding politicians, he had the choice to expose the entire system by (1) walking away from it and (2) telling the public exactly who these shady characters are once and for all. If he had done so, he would've torpedoed the entire establishment's credibility in the eyes of the public. Yet, he didn't. He stuck around in the system and became a part of it.

Imran Khan was always destined to be no more than the useful puppet he was created to be: Naya Pakistan = Purana Pakistan.

 

[Nilgiri]

IMF rejects borrowing request | The Express Tribune

Doesn’t allow Pakistan to keep doors open for taking loans from central bank

tribune.com.pk

Pakistan’s debt, liabilities cross Rs50tr | The Express Tribune

Burden increased by Rs20.7 trillion in past 39 months

tribune.com.pk

@VCheng past all the usual stuff (its by design etc etc) ....is the general population enquiring why "higher than mountains" iron brother is not stepping in for even a nominal amount of help in these trying times?

 

[Bilal Khan(Quwa)]

IMF rejects borrowing request | The Express Tribune

Doesn’t allow Pakistan to keep doors open for taking loans from central bank

tribune.com.pk

Pakistan’s debt, liabilities cross Rs50tr | The Express Tribune

Burden increased by Rs20.7 trillion in past 39 months

tribune.com.pk

@VCheng past all the usual stuff (its by design etc etc) ....is the general population enquiring why "higher than mountains" iron brother is not stepping in for even a nominal amount of help in these trying times?

In general? No.

But there's a small segment that's skeptical of China, if not hostile to it.

However, they're Pan-Islamists.

Ironically, despite its tolerance or acceptance of mainstream Islamic political parties, the Pakistani establishment will never engage with Pan-Islamists. The latter isn't just out for power for the sake of it (they could've joined the main parties), but they have bigger agendas that endanger the top.

It's not the Islamic flavor that makes Pan-Islamists undesirable (to the establishment), but the fact that they're an independent breed. In that sense, they're structurally similar to the old-school secular groups that used to exist in Pakistan pre-1978. The establishment can't wrangle them, so it fights them.

It's ironic, but of the people who 'disappear' in Pakistan, true-blooded seculars and the Pan-Islamists make up the majority. That should tell us something. I don't know if they'll ever catch on. These 'true blooded' types had never caught on in Pakistan or elsewhere. Secular or Pan-Islamic, they expect way too much from their societies.

 

[VCheng]

IMF rejects borrowing request | The Express Tribune

Doesn’t allow Pakistan to keep doors open for taking loans from central bank

tribune.com.pk

Pakistan’s debt, liabilities cross Rs50tr | The Express Tribune

Burden increased by Rs20.7 trillion in past 39 months

tribune.com.pk

@VCheng past all the usual stuff (its by design etc etc) ....is the general population enquiring why "higher than mountains" iron brother is not stepping in for even a nominal amount of help in these trying times?

The "general" population is actually too entangled in just getting by day to day to worry about anything else. Iron Brother gets a pass because the narrative is directed towards painting the IMF as the evil bank inflicting all the pain, without any introspection as to why the situation is heading towards where it must. That is also why TLP is being built up to create the next monster to scare everyone into supporting the officially blessed setup in the next selection cycle once the present one is dismantled to defuse the explosive pressures rising right now.

 

[Nilgiri]

In general? No.

But there's a small segment that's skeptical of China, if not hostile to it.

However, they're Pan-Islamists.

Ironically, despite its tolerance or acceptance of mainstream Islamic political parties, the Pakistani establishment will never engage with Pan-Islamists. The latter isn't just out for power for the sake of it (they could've joined the main parties), but they have bigger agendas that endanger the top.

It's not the Islamic flavor that makes Pan-Islamists undesirable (to the establishment), but the fact that they're an independent breed. In that sense, they're structurally similar to the old-school secular groups that used to exist in Pakistan pre-1978. The establishment can't wrangle them, so it fights them.

It's ironic, but of the people who 'disappear' in Pakistan, true-blooded seculars and the Pan-Islamists make up the majority. That should tell us something. I don't know if they'll ever catch on. These 'true blooded' types had never caught on in Pakistan or elsewhere. Secular or Pan-Islamic, they expect way too much from their societies.

I understand that. There are still further uneasy combinations involved. Pakistan has evolved into a very complicated society for its population size.

This explain the dissonance at PDF to large degree....the large repetitive threads against KSA, UAE (Gulfies etc), while over-celebrating China (and other more "Asian continental" alliances)....and indulging all the related sycophancies for this...

....but it is KSA that now actually fronted the 3 billion emergency forex....with whatever understandings it involves with Pakistan's power centres.

Whereas China remains quite wary on this matter (short term immediate needs and reliability)....and keeps everything (seemingly) long-term approach as possible. Given Pakistan itself internally is not consolidated to degree they would prefer for that (among other things they prefer at large)....and they see no need to delve into that I feel.

The "general" population is actually too entangled in just getting by day to day to worry about anything else. Iron Brother gets a pass because the narrative is directed towards painting the IMF as the evil bank inflicting all the pain, without any introspection as to why the situation is heading towards where it must. That is also why TLP is being built up to create the next monster to scare everyone into supporting the officially blessed setup in the next selection cycle once the present one is dismantled to defuse the explosive pressures rising right now.

I agree. Well general population I meant online variety with some means and buffer to talk about such things online .

It seems to me they are either mostly blinded by certain things, oblivious to them....or resigned. They build up a fantasy regarding countries like China and do not proceed to challenge or call them out (or their own logic on it) on very brazen discrepancies regarding it.

This is repeated with other countries too as well....but China just happens to be the most glaring one in view now with these fiscal problems....and its IMF and KSA etc involved in them.....but not the dragon "strangely"...

That refusal to do so (by this large noisy crowd that assert whatever ideology w.r.t Pakistan patriotism/nationalism).... runs contrary to consistency and rationality.

 

[VCheng]

I agree. Well general population I meant online variety with some means and buffer to talk about such things online .

This segment of the "general' population, particularly at the cesspool forum where scum has risen to the top, is best described by the famous song lines:

"Clowns to the left of me, jokers to the right!"

Need I say anymore?

 

[Nilgiri]

This segment of the "general' population, particularly at the cesspool forum where scum has risen to the top, is best described by the famous song lines:

"Clowns to the left of me, jokers to the right!"

Need I say anymore?

Yeah I have just looked into other gatherings since....relative non-cesspool ones....since I have formed an understanding cesspools exist for every country online....somewhat inevitably to the larger contexts involved.

But even in these other gatherings ....no one really is asking these questions when the hammer and nail present itself so readily....people much more educated and rational.

Maybe they are just resigned to it...

Folks like Hoodbhoy and Shuja Nawaz can't be carrying this stuff alone (especially given they intellectually must prioritise to scale the vertical side of the argument).....a few torch bearers model is just going to get ignored and snuffed out....

Something needs to spark even among the relative well-to-do that have rationality within them, its not such a small % as one might think (at least in my opinion).

The hammer and nail construction and edifice must take shape beyond them.

Pakistan presents quite conundrum to me.....I mean look at just these two articles I posted....from express tribune.

It shows one large advantage (i.e measure of alignment to a fundamental truth) that Pakistan does have over number of countries (of which I count mightier ones like PRC even)....ready to harness and develop if actioned properly and wisely (but this needs other advantages truth columns for it to support itself and grow).

But looking at this one single solitary pillar (without support and thus no real roof).....the fact the deep problems are aired out in quite some detail if you read it.....shows again what potential is there to question and reform and renew (and then mount the charge on the bastille later when proper)....but only if enough contrarian challengers shape up in some bulk in those with means to do so....to build the further pillars and then the steady roof.

This is the core problem I see in Pakistan.

 

[VCheng]

Folks like Hoodbhoy and Shuja Nawaz can't be carrying this stuff alone (especially given they intellectually must prioritise to scale the vertical side of the argument).....a few torch bearers model is just going to get ignored and snuffed out....

Such folks are definitely on the way out, the percentage is now simply too low to sustain itself.

Pakistan is a conundrum only to those who do not understand it. To me, everything happening there is the product of conscious choices by design. The results are equally inevitable, and very predictable.

(Pity that even this forum, better as it is, could not resist muddying its own waters with some cross-contamination despite the known sewage in the source, a fact that is my continuing conundrum here. )

 

[Nilgiri]

KSA that now actually fronted the 3 billion emergency forex

Seems even that isn't all that it seemed at initial glance....

https://twitter.com/i/web/status/1464910317125726208

 

[Paro]

Seems even that isn't all that it seemed at initial glance....

https://twitter.com/i/web/status/1464910317125726208

 

[VCheng]

Seems even that isn't all that it seemed at initial glance....

https://twitter.com/i/web/status/1464910317125726208

When is it ever the case with the jokers in charge right now?

 

[Kaptaan]

Seems even that isn't all that it seemed at initial glance....

https://twitter.com/i/web/status/1464910317125726208

Is this a reliable or credible source?

 

[Kaptaan]

You know posting a reportage or analysis by Indian media on Pakistan is like using Israeli referance on Palestine or Armenian reporting on the so called genocide. One sided dribble.

 

[Nilgiri]

Is this a reliable or credible source?

If you prefer:

Cabinet approves $4.2b Saudi loan package | The Express Tribune

Minister says much-need hard cash to help stabilise exchange rate

tribune.com.pk

Saudi conditions

DECADES of fiscal profligacy have trapped the country in a situation where it not only has to borrow more money to...

www.dawn.com

 

[Paro]

You know posting a reportage or analysis by Indian media on Pakistan is like using Israeli referance on Palestine or Armenian reporting on the so called genocide. One sided dribble.

Is he wrong?
Irrespective of any country’s reportage every single fact he stated is true. Your own media reported the same.

 

[Nilgiri]

@Bilal Khan(Quwa) can't help but want to flesh out a bit on your reply in gathering elsewhere (if you are interested to do so):

I remember the days when a lot of Bengali folks were complaining about Hasina. This was circa-2010-2015-ish. Then after 2015, I started to hear (from people living inside Bangladesh), "It's hard to find anyone to do cleaning work. People have all sorts of opportunities at factories and companies. No one goes hungry." Yes, the Awami League struck down a lot of opposition, but at the end of the day, no amount of authoritarianism will quiet a rumbling stomach. Despite the pain and turmoil at the start of Hasina's government, the Bangladeshi people are now benefitting from the economy. This was also the case in Turkey in the Erdogan era.

It wouldn't surprise me if Pakistan goes down the same path. You'll hear a lot of animosity at the start of the PTI governments, but as true businesses (not importers) see growth and as naukar-walay houseboys find better jobs, the opposition will lose supporters. Today's poor guy might take biryani for votes, but his better-educated sons or daughters with jobs will not. If PTI gets through these initial years, they'll reach a growth phase where they'll build stronger roots in the population.

The real interesting thing will be to see if they clean house like Hasina or Erdogan did...

That was part of thread talking about this article:

Trade deficit — the worst is almost over

Global Container Freight Rate Index soared from $3,143 in Dec 2020 to $10,839 in Sept 2021 before falling.

www.dawn.com

Out of interest, what range do you put a trade deficit (even deep recurring one) as the % intensity driving Pakistan's current situation?

i.e where do you broadly put it: In the >75%, 50-75%, 25-50% or <25% range?

It is the kind of thing needing asking first before you establish a larger argument.

i.e we need to first understand if its more a cause or effect.....or disease or symptom if you prefer.

That is worth sorting out before we can address if authoritarianism is relevant to that...... much less in relation to solving it in any capacity (especially if it itself is major part of the cause to begin with).

I have explored the topic deeply (reading a number of SBP papers for example) most likely more than anyone else in that (now severely diminished) gathering.

All part of the reason they have silenced me (and the Turks that you find here)...which I will get to later maybe. Its all part of the root cause.

The standard-bearer references must also be picked wisely:

Forex reserves overstated by $7.2bn: IMF

The foreign exchange reserve of $46 billion as reported at the end of June this year was overstated by 15%

www.tbsnews.net

There is such a thing (even among the "authoritarian" miasma) of being so in the especially wrong places to perpetuate power rather than any kind of prosperity....and the dissonance that builds up with actual rational more standardised+transparent referencing.

 

[Bilal Khan(Quwa)]

@Bilal Khan(Quwa) can't help but want to flesh out a bit on your reply in gathering elsewhere (if you are interested to do so):

I remember the days when a lot of Bengali folks were complaining about Hasina. This was circa-2010-2015-ish. Then after 2015, I started to hear (from people living inside Bangladesh), "It's hard to find anyone to do cleaning work. People have all sorts of opportunities at factories and companies. No one goes hungry." Yes, the Awami League struck down a lot of opposition, but at the end of the day, no amount of authoritarianism will quiet a rumbling stomach. Despite the pain and turmoil at the start of Hasina's government, the Bangladeshi people are now benefitting from the economy. This was also the case in Turkey in the Erdogan era.

It wouldn't surprise me if Pakistan goes down the same path. You'll hear a lot of animosity at the start of the PTI governments, but as true businesses (not importers) see growth and as naukar-walay houseboys find better jobs, the opposition will lose supporters. Today's poor guy might take biryani for votes, but his better-educated sons or daughters with jobs will not. If PTI gets through these initial years, they'll reach a growth phase where they'll build stronger roots in the population.

The real interesting thing will be to see if they clean house like Hasina or Erdogan did...

That was part of thread talking about this article:

Trade deficit — the worst is almost over

Global Container Freight Rate Index soared from $3,143 in Dec 2020 to $10,839 in Sept 2021 before falling.

www.dawn.com

Out of interest, what range do you put a trade deficit (even deep recurring one) as the % intensity driving Pakistan's current situation?

i.e where do you broadly put it: In the >75%, 50-75%, 25-50% or <25% range?

It is the kind of thing needing asking first before you establish a larger argument.

i.e we need to first understand if its more a cause or effect.....or disease or symptom if you prefer.

That is worth sorting out before we can address if authoritarianism is relevant to that...... much less in relation to solving it in any capacity (especially if it itself is major part of the cause to begin with).

I have explored the topic deeply (reading a number of SBP papers for example) most likely more than anyone else in that (now severely diminished) gathering.

All part of the reason they have silenced me (and the Turks that you find here)...which I will get to later maybe. Its all part of the root cause.

The standard-bearer references must also be picked wisely:

Forex reserves overstated by $7.2bn: IMF

The foreign exchange reserve of $46 billion as reported at the end of June this year was overstated by 15%

www.tbsnews.net

There is such a thing (even among the "authoritarian" miasma) of being so in the especially wrong places to perpetuate power rather than any kind of prosperity....and the dissonance that builds up with actual rational more standardised+transparent referencing.

My comment was more in the context of establishment stability. My thesis (so to speak) was, be it authoritarian or democratic, if the economic base is satisfying enough of the population, the public resistance to the establishment generally tapers off.

I highlighted Bangladesh because (at least based on the conversations I had with people living there) the public seems to value perceived economic benefit over the Hasina government's authoritarian bent. Admittedly, it's an anecdotal observation, but I genuinely do believe Bangladesh is a place where high public discontent can displace the top no matter how strong or brutal the top is.

The issue with Pakistan is that no party or group made fundamental changes to the economy since Bhutto Sr. and Musharraf. In both cases, they benefitted certain groups but left many in the dust. There hasn't been a broad economic uplift akin to Bangladesh IMHO. I don't know if PTI will do it, but if they do, the opposition will lose energy. If that happens, then IMO, the PTI will re-engineer Pakistan's political environment to cement itself at the PPP and PML's expense. I'd say the PPP is a more attractive target as displacing it unlocks Karachi and, if leveraged right, could open a wellspring of power and influence for PTI and its backers.

But it's really an issue of perception. If the right people perceive things are going their way, then they'll support whoever is leading them to that direction. That's what will give PTI stronger roots in the population and, in turn, enable it to displace other parties. Now whether those perceived economic uplifts or benefits reflect true economic prosperity or not is a different story. PTI can 'finesse' this too, and I wouldn't be surprised if they do as, ultimately, they're another Pakistani party that was let into the power corridor.