Debate / Ideas for solutions to Pakistan's economic problems

[Indos]

@Indos @Goenitz this article recently published in Dawn captures everything that is wrong with Pakistan's IMF program. Indos should look at this and take away lessons to apply for Indonesia

A redesigned programme

The design of the IMF programme has led to perverse incentives and unintended consequences.

www.dawn.com

Bro, Indonesia since long time ago doesnt trust IMF. We see that institution has ill intention where they force us to sell all of our state owned companies (only few are sold and we are hurry to pay the loan so we can save many of our state owned companies).

They also forbid Indonesia government to finance Indonesia Aerospace despite during Asian Financial Crisis (1997-2000 (we need to obey them until we pay the loan in 2008) we have already run two expensive program which are N 250 and N 2130, where because of that prohibition those program are failed.

During Asian Financial Crisis we dont have any option beside borrow huge money from IMF with interest and obey their advice or they will not lend us more money or even ask Indonesia to pay sooner.

We paid all of our loan in 2008 and never ask anything to IMF again. While you can see India is still borrowing money from IMF until Today. Indonesia Today borrow money mostly from financial market and few from World Bank and Asian Development Bank. We never borrow money from IMF after we paid all of the loan in 2008, because of that we dont have any obligation to follow their advices.

Indonesia government is closer to World Bank and Asian Development Bank and has some colaboration research with those two institutions where our economic policy will likely be based on those research.

Our current financial minister is also former World Bank Managing Director, so we dont think we are going to weight IMF advice on us as something better than our own economist analysists, but of course we should have open mind and study all of the advises from different think thank groups and financial institutions (including from IMF) to better form our economic strategy.

 

[Goenitz]

Bro, Indonesia since long time ago doesnt trust IMF.

@CriticalThought
I know you once said that world is not fair and these multinational corporations are milking tons of money so why they would reform Pakistan with a good will.

DAWn article is a difficult to understand for me as idk abc of economics. However, in our old discussion in charter of democracy thread, we know that our economy is informal, so taxing is low. Plus, our 70% economy is consumer based economy with little or no export potential.

The power tariffs the articles talked about is highly dependent on oil price. Unless they are diversified, we have to rely on tariff. Anyway, the article didn't talk about solution.

I think we have to cut number of ministries, judges pay with more austerity measurement. I know that their high pays are there, so that they don't look for bribes. As still they do, so reduce their halal income, anyway.

Article also mentioned about more exports. Besides, FDI, we have to support SMEs. Why? bcz we cannot setup large plants and run on our own. The govt/think tank look for small manufactured goods potential in neighbouring regions and support SMEs towards that.

Examples can be, many like more of our food products like chocolates/energy bars/jams/cereals/cheese (already but more).

I was thinking that our govt should convince gulf towards greener solution, for their own publicity, acknowledgement and praise.

Like bamboo straws, coconut shells bowls, coconut husk dish scrubbers, bamboo toothbrush, etc. For world appraisal, UAE would quickly adopt it.



coconut shell bowls

straws






husk scrubber

Also, these are expensive.

@The Accountant @JamD

 

[Ahmet Pasha]

You guys have easy access to a market of a billion plus people right next to you not to mention cheaper alternatives to many products, how many countries have that?
Just give peace a chance and see the effects, that alone can have a big impact.
If higher ups and the common people see the economic growth even they will think twice before escalating tensions or demanding it as trade will be impacted, south asia will be more prosperous and peaceful.
The current ceasefire is the right step.

Yes China. You are right.

 

[Goenitz]

I forgot to add more about circular economy.

How can we collect leaves, twigs, fruit markets left over to compost if not feed. These compost are better than chemical/organic fertilisers for kitchen gardening...
@Blacklight Sir you mentioned about different cattle breeds about Wagyu beef. However, I was referring more about our own cattle but with better diet. Like, wrestlers/body builders have certain diet to grow muscles, so cattle can have to grow fats.

Also, I forgot to add edible spoons and forks to be sold in Gulf. Indians made it. These are made from lentils/barley/oats etc

 

[Indos]

@CriticalThought
I know you once said that world is not fair and these multinational corporations are milking tons of money so why they would reform Pakistan with a good will.

DAWn article is a difficult to understand for me as idk abc of economics. However, in our old discussion in charter of democracy thread, we know that our economy is informal, so taxing is low. Plus, our 70% economy is consumer based economy with little or no export potential.

The power tariffs the articles talked about is highly dependent on oil price. Unless they are diversified, we have to rely on tariff. Anyway, the article didn't talk about solution.

I think we have to cut number of ministries, judges pay with more austerity measurement. I know that their high pays are there, so that they don't look for bribes. As still they do, so reduce their halal income, anyway.

Article also mentioned about more exports. Besides, FDI, we have to support SMEs. Why? bcz we cannot setup large plants and run on our own. The govt/think tank look for small manufactured goods potential in neighbouring regions and support SMEs towards that.

Examples can be, many like more of our food products like chocolates/energy bars/jams/cereals/cheese (already but more).

I was thinking that our govt should convince gulf towards greener solution, for their own publicity, acknowledgement and praise.

Like bamboo straws, coconut shells bowls, coconut husk dish scrubbers, bamboo toothbrush, etc. For world appraisal, UAE would quickly adopt it.

View attachment 746427

coconut shell bowls

straws

View attachment 746428

View attachment 746429


husk scrubber

Also, these are expensive.

@The Accountant @JamD

What I can say is that, current Pakistani financial problem looks quite hard to be solved, but dont let this problem consume a lot of your time and energy that make you forget your long term goals, which I see has been explained quite clearly by Indonesian finance minister, Sri Mulyani, which are improving education, ease in making and operating a business, good governance, anti corruption campaign, supportive law for businesses, and so on.

These are actually something that any Pakistani economist I believe have already known, but do you see any progress on those things ?

For instants, in Indonesia despite we dont have huge financial problem like Pakistan but we still can make law that force any administration to put 20 % of central government budget for education, making Omnibus Law that ease people to make business like for example we can now make legal business by only using our Identity Card number and only use internet to make one while both tax officer and investment ministry officers will help us if there is some problem during the online registration process by calling the hotline numbers.....Even local province administration also have that hotline numbers and ready to help us if there is some question we need to ask about making or registering a business

Forgeting the long term goals can make Pakistan cant solve this economic problem even until the next 20 years. The reasons is simple, more education to both genders will make better democracy, people are getting better in picking the righ leader, more people get education will create more opportunity to have more entrepreneurs and of course better work force and civil servants, all are very supportive to economic development and better governance and policy making

 

[Goenitz]

put 20 % of central government budget for education,

Man!!!!!!!!!!!!! we spend 2-3% !!! may be? The main reason is our overall GDP, besides we have to spend on defence as we have India as enemy. The rest goes to corruption.

Identity Card number and only use internet to make one while both tax officer and investment ministry officers

Thats hurts me the most. A single number should be for driving license, for fiscal code and for identity, etc. Every department has its own paper work for identification, declarations, and so on.

which are improving education, ease in making and operating a business, good governance, anti corruption campaign, supportive law for businesses, and so on

Sure brother. Everyone knows that, but yes, no one is implementing it. What we (Edit: I am) are discussing mainly here, to look for new exports items.

 

[HAIDER]

Dear friends, from quite some time I wanted to initiate a debate on economic development of Pakistan but due to personal and professional commitments never got time to actually write something. Leveraging on eid holidays I am initiating the topic where I would like you guys to share your ideas.

Those interested in politics are already well aware of key economic problems of Pakistan. Thanks to consistent budget deficits Pakistan has a mounting public debt as a result most of the budget get utilized in debt servicing rather than for any development project.

On the other hand consistent and huge trade deficit keeps on pushing for currency devaluation and need for borrowing from abroad; putting Pakistan under influence of its creditors.

The twin deficit coupled with low economic growth resulted in vicious circle where Pakistan’s per capita GDP growth is getting lower and lower in comparison to other comparative economies.

However, most of these are only the symptoms of poor economic management rather than problem itself. Our problems are structural in nature and requires a lot of economic restructuring before any benefits can be seen. Short term decision making of the ruling elites for the personal benefits has made our business uncompetitive. Our resources and money is being used for hoarding and speculating mostly in non-productive sectors. Most safe and profitable investment is to buy a property and wait for prices to increase which is a total wastage of resources. Similarly in commodity sector most of the profit earned by the middle man (arti) rather than the producer or risk taker.

Although government and establishment has realized that without a strong economy survival of Pakistan as a nuclear nation is impossible and is focusing her efforts for increasing export and import substitution but till to date the improvement in external trade account is still small in comparison to required target.

Despite putting a lot of efforts bringing economic experts from around the world and having support from establishment; the results are still far from encouraging, so what the real reason behind such a slow progress?

In my opinion Pakistan structural issues are not even touched till to date. The remedies suggested by the government is again addressing the symptoms without touching the core structural issues of the economy.

In my opinion to address the structural issues of Pakistan government need to work on following areas:

• Development of human resources capable of dealing with modern day challenges in every field of life. Right from an engineer to a farmer, every individual person in the work force should be developed, trained and retrained to become competitive to one of the best among the world. Need to establish institutes, online courses, access to resources and internet to the work force teaching them the efficient ways of production.
• 
  
• Establishment of research and think tank institutes free from political influence comprising of one of the best brain in their respective fields. Those research centers and think tanks should be responsible for policy making and monitoring development progress in their relevant field.
• 
  
• Pakistan economy lacks the basic backbone industries without which industrialization is nothing but a wet dream. In order to industrialize Pakistan we need to invest heavily in steel industry, petrochemical industry, electronic industry, artificial intelligence industry, and electrical goods industry, heavy machinery manufacturing industry and bio sciences. Till to date the only investment being done is in energy sector and housing sector only.
• 
  
• All these industry will provide basic raw material to other manufacturing companies. However, these industries need some serious heavy investments which an individual investor is not capable to arrange. And hence we move to fourth area where we need to work on.
• 
  
• The fourth area where government needs to work is establishment of special purpose financing vehicles that can collect finance from individuals and then invest those finances into venture capital industry to establish new organizations to the likes of Pakistan steel mills, PICIC commercial bank, PECO and other such flagship organization. However, the key is here is to arrange finances only while keeping the operations to professionals only and exiting the organization after 2 years of profitable operations.

These are some of the ideas that I can think of right now. I am sure, some you might have even greater ideas or can add a lot to my opinion. Looking forward for further suggestion from respected members.

Here is the issue .. whatever you suggest.... everyone must listen .. hamari quam corrupt ha ... only danda is peer.

 

[Blacklight]

I forgot to add more about circular economy.

How can we collect leaves, twigs, fruit markets left over to compost if not feed. These compost are better than chemical/organic fertilisers for kitchen gardening...
@Blacklight Sir you mentioned about different cattle breeds about Wagyu beef. However, I was referring more about our own cattle but with better diet. Like, wrestlers/body builders have certain diet to grow muscles, so cattle can have to grow fats.

Also, I forgot to add edible spoons and forks to be sold in Gulf. Indians made it. These are made from lentils/barley/oats etc

View attachment 746432

Brother,

The idea was to switch breeds or seeds for greater yields. Our own cattle, not only with better diet, but better breeds like Sibi. Just look at the size of this bull, it is over a ton!

Same goes for our dairy cows, we can definitely get better yields from holstein friesian dairy cows,

than buffaloes and our domestic ows

We need more R&D as well as breeding centers to help our farmers slowly transition to better farming methods.

EDIT: Majority of our dairy milk comes from Buffaloes, we can maximize its return, by using it in manufacturing cheese.

 

[Vapour]

OK So If I Was The PM What SHould I Do????

1.Float ADRs and GDRs Of PTCL State Life Pakistan Steel and PIA As Well As OGDCL And PPL.This Will Trigger Interest of Global Investors in Pakistan

2.Imran Khan Has A Lot Going For Him During The Previous Regime The Lack of Power Supply Was The Main Bottleneck To Economic Growth.Now The Opposite Is The Problem Way More Electricity Than We Need Resulting In Massive Capacity Payments To The Tune of Rs1+ Trillion.Such Large Capacity Payments Mean We ARe Practically Paying For Electricity That We Don't Need.The Only Way To Get Out Of This Conundrum Is To Stimulate Growth In Order To Increase Consumption.So How Do We Do That Simple
Right Now There Are A Large Number of Industrial Parks/Estates In Pakistan Ready For Use With World Class Facilities e.g
a)Port Qasim Industrial Zone(I Have Personally Studied Feasibility Reports Suggesting That With The Right Policies Port Qasim Can Attract Upward of $10 billion FDI)
b)Industrial Estates of Punjab Run By PIEDMC(Sundar,Bhalwal,Vehari,Rahim Yar Khan, Bahawalpur etc.)
c)Industrial Estates of Faisalabad especially M3 Industrial City and Allama Iqbal Industrial City
d)SITE Industrial Areas in Larkana Nawabshah and Nooriabad

The Industrial Estates Mentioned Above Are Mostly Unused.Most Plots Are Empty.IK Should Try And Get Some of The Relocating Industries of China,Korea Or Japan.I Have Written About This Before

Something Better Than Oil

Okay Guys So As You Know That Since The News That No Oil Found In Kekra 1 The Whole Nation Including Me Is Feeling Pretty Depressed and Despondent.But I Want To Tell You That If We Can Work A Little Hard Certain Developments Nationally and Internationally Can Favour Us We Can Attract Multi...

defence.pk

3.Also IK Should Utilized A Portion of The Chinese $1 Billion Grant To Start A Nationwide Technical Training Program So The Desired Human Resource Be Made Available.

Just The Above Steps Would Result In Killing Two Birds With One Stone.Increased Electrcity Consumption Would Result in Lowering of Capacity Payments Thus Lower Electricty Bills And Also Reduce Unemployment and Increase GDP.


I Will Write More On This Thread In The Coming Days.


To Be Continued..............

Excellent post.

 

[Indos]

Man!!!!!!!!!!!!! we spend 2-3% !!! may be? The main reason is our overall GDP, besides we have to spend on defence as we have India as enemy. The rest goes to corruption.

Thats hurts me the most. A single number should be for driving license, for fiscal code and for identity, etc. Every department has its own paper work for identification, declarations, and so on.

Sure brother. Everyone knows that, but yes, no one is implementing it. What we (Edit: I am) are discussing mainly here, to look for new exports items.

If it is hard to penetrate the export market at the moment, you can protect the domestic market more, I suggest to scrap that FTA with China and dont ever let China or American e-commerce to your country.

Talking about war with India. I will give a solution that you may be hard to accept. So I will give example where one nation has taken that decision and now become prosperous

You can read the story of why Natuna island belongs to Indonesia.....

Malaysian has two options, concentrating on military and take Natuna islands from Indonesia (which mean war and regional instability) or concentrate on the economy and regional peace and let go any desire to take these islands from Indonesia

You know which one that Malaysia has chosen....

https://www.astroawani.com/berita-dunia/natuna-islands-malaysian-geography-indonesian-sovereignty-94430

 

[Goenitz]

Gamla made in Pakistan

at Bunnings (an Australian group trading as Bunnings Warehouse, has stores in Australia and New Zealand)

 

[newb3e]

Brother,

The idea was to switch breeds or seeds for greater yields. Our own cattle, not only with better diet, but better breeds like Sibi. Just look at the size of this bull, it is over a ton!
View attachment 746450

Same goes for our dairy cows, we can definitely get better yields from holstein friesian dairy cows,
View attachment 746451

than buffaloes and our domestic ows
View attachment 746452

We need more R&D as well as breeding centers to help our farmers slowly transition to better farming methods.

EDIT: Majority of our dairy milk comes from Buffaloes, we can maximize its return, by using it in manufacturing cheese.

our buff milk is expensive and not feasible for cheese!

 

[Whirling_dervesh]

Massive drive to have learning and language colleges in chinese. This is the future. The west will do nothing for pak

 

[Goenitz]

our buff milk is expensive and not feasible for cheese!

@_NOBODY_
Is goat milk widely available in pak.. I heard it is good for lactose intolerant people...

 

[_NOBODY_]

@_NOBODY_
Is goat milk widely available in pak.. I heard it is good for lactose intolerant people...

In Lahore people mostly buy cow milk. Some may buy buffalo milk but mostly cow milk is consumed. In terms of health benefits, camel milk is the best. One of my biggest regrets is that I never tried camel milk despite living in Saudi Arabia for 15 years.