Further cuts to defense expenditures

[VCheng]

The funny thing is that all of our economic managers have known why the boom and bust cycles happen but nobody is willing to address them.

For the past 20+ years, it has been a matter of passing the buck. At one point in time, this would become a national security issue (and that time has kind of arrived). When you have no fiscal space to keep up your military readiness, then obviously all the stakeholders get worried.

I happened to read in one report that almost 60% of the defense acquisition spend was being managed with loans. So the debt servicing and increased oil prices are really taking a toll on everything including military readiness.

I have been saying the same thing on PDF for over a decade now, to no avail, sadly.

(The other one is overpopulation, and its associated evils of resource scarcity and lack of social development. Sadly, these topics are not as sexy as new Eff Sola and therefore ignored as well, but infinitely more important IMO.)

 

[blain2]

Proposal is minimum 35% of the annual Budget not GDP

We would go belly up like USSR!

 

[Abdul Rehman Majeed]

We would go belly up like USSR!

USSR went belly up due to their perestroika policy.

 

[blain2]

USSR went belly up due to their perestroika policy.

That too.

 

[Abdul Rehman Majeed]

That too.

That was the main reason. People with strict control cannot handle freedom. That is why Russia was unstable under Yelstin but became stable under Putin.

 

[blain2]

I have been saying the same thing on PDF for over a decade now, to no avail, sadly.

(The other one is overpopulation, and its associated evils of resource scarcity and lack of social development. Sadly, these topics are not as sexy as new Eff Sola and therefore ignored as well, but infinitely more important IMO.)

Pakistan essentially needs to go on war footing with not letting our businesses/industry import without exporting something.

Essentially a credit system. If you want to import a certain amount etc., you/your industry must have a similar amount outbound. No more one-way imports or local only distribution for consumption.

I recall a Podcast with Miftah Ismail prior to he was in government. This was sort of his line of thinking. Now when he is in the hot seat, hopefully he can put some meaningful changes in the system which can be sustained.

 

[truthseeker2010]

Pakistan essentially needs to go on war footing with not letting our businesses/industry import without exporting something.

Essentially a credit system. If you want to import a certain amount etc., you/your industry must have a similar amount outbound. No more one-way imports or local only distribution for consumption.

I recall a Podcast with Miftah Ismail prior to he was in government. This was sort of his line of thinking. Now when he is in the hot seat, hopefully he can put some meaningful changes in the system which can be sustained.

Lol to export something, you need your industry to be competitive in terms of energy, logistics and ease of doing business. Pakistan energy prices have become prohibitive even with no taxes because of ppa and exchange rates. Next is export friendly policies of gov is inconsistent and those who do export are not incentivized.
All the govs have focused on increasing revenue through indirect taxation, thereby increasing inflation, PTI did focused on Direct taxation but for that FBR and tax courts should be reformed.
Industrialist nor accountants don't run economy that's a tested recipe for disaster!

 

[blain2]

Lol to export something, you need your industry to be competitive in terms of energy, logistics and ease of doing business. Pakistan energy prices have become prohibitive even with no taxes because of ppa and exchange rates. Next is export friendly policies of gov is inconsistent and those who do export are not incentivized.
All the govs have focused on increasing revenue through indirect taxation, thereby increasing inflation, PTI did focused on Direct taxation but for that FBR and tax courts should be reformed.
Industrialist nor accountants don't run economy that's a tested recipe for disaster!

All of what you say would be needed as well. New regulations, ease of doing business but very fundamentally we have to incentivize our industry to export as much as they import.

This was a basic formula that was implemented by South Korea and Vietnam (and perhaps others too) to make sure they became competitive in the export market and this was the one key way for them to break the chronic deficit problem that we also face. If you are not going to export then you are not allowed to import. This would have a bigger positive impact on our budget deficit than banning imports of consumer goods.

 

[Bilal Khan (Quwa)]

All of what you say would be needed as well. New regulations, ease of doing business but very fundamentally we have to incentivize our industry to export as much as they import.

This was a basic formula that was implemented by South Korea and Vietnam (and perhaps others too) to make sure they became competitive in the export market and this was the one key way for them to break the chronic deficit problem that we also face. If you are not going to export then you are not allowed to import. This would have a bigger positive impact on our budget deficit than banning imports of consumer goods.

Why doesn't the establishment back a horse that will get all that (e.g., South Korea/Vietnam-type management) done? Why perennially trust the same political class over and over again? Even PTI didn't carry as much of the 'real change' because, ultimately, many of its key drivers were from the old guard.

 

[Goritoes]

Remove all gardeners, drivers, secretaries, batmans etc of ALL the military officials…..how much does that save?

Remove them all and you have a Army that can't even wash their own dishes, clothes , and make their own food. They need slaves yet they are the Mujahid's lol Bloody Chickens.

 

[GriffinsRule]

Latest weaponary is being donated to Ukraine and they in turn are selling it ahead.
If our military could exploit the situation through backdoor channels, we could have some good machines and weapons.

Instead of buying think what you could have sold to Ukraine instead

The funny thing is that all of our economic managers have known why the boom and bust cycles happen but nobody is willing to address them.

For the past 20+ years, it has been a matter of passing the buck. At one point in time, this would become a national security issue (and that time has kind of arrived). When you have no fiscal space to keep up your military readiness, then obviously all the stakeholders get worried.

I happened to read in one report that almost 60% of the defense acquisition spend was being managed with loans. So the debt servicing and increased oil prices are really taking a toll on everything including military readiness.

Where are all those forum economists that kept saying we have ALL the money in the world to keep "buying" stuff using loans. Lets see what happens as those loans start coming due.
Wondering why we are not seeing more JF-17 Block IIIs ... its the economy.

 

[ziaulislam]

tbh I think the forum public's "eyes" are on the part of the budget that goes into salaries, pensions, and perceived perks and concessions.

PS: My old man left the PAF early and left his pension, etc on the table. So, my view on this matter is definitely a little biased. Having seen my father pursue further education and training outside of the PAF and work his way up in the non-military world... I'm of the view that we shouldn't be giving pensions to able-bodied and minded people, even if they retire. Rather, focus more on training officers and men with knowledge and skills they can transfer to the civilian world.

Or do what happens elsewhere
Create a good equity funds for everyone that not only support local economy but also retiree

Remove all gardeners, drivers, secretaries, batmans etc of ALL the military officials…..how much does that save?
Officials can use their own salaries to pay for servants if they like. Apna kaam khud kerna sekho, shayad tidd kam hojaway

This is somwthing that army will fight a world war for..so it wont happen

Army has indian british army culture

In US army it will be insult to keep a batman in pakistan batmans are there to look for generals wife

This is total disgrace...in any sane country wouldnt be allowed

Pakistan essentially needs to go on war footing with not letting our businesses/industry import without exporting something.

Essentially a credit system. If you want to import a certain amount etc., you/your industry must have a similar amount outbound. No more one-way imports or local only distribution for consumption.

I recall a Podcast with Miftah Ismail prior to he was in government. This was sort of his line of thinking. Now when he is in the hot seat, hopefully he can put some meaningful changes in the system which can be sustained.

This is where you get it wrong
Blaming everything on local industries

Textiles told you give them same prices as bengaldesh and they will double xports

And they did deliver

Now you have taken away that..this means exports will drop and PROBABLY would never recover

 

[SD 10]

Proposal is minimum 35% of the annual Budget not GDP

i know that!

 

[truthseeker2010]

All of what you say would be needed as well. New regulations, ease of doing business but very fundamentally we have to incentivize our industry to export as much as they import.

This was a basic formula that was implemented by South Korea and Vietnam (and perhaps others too) to make sure they became competitive in the export market and this was the one key way for them to break the chronic deficit problem that we also face. If you are not going to export then you are not allowed to import. This would have a bigger positive impact on our budget deficit than banning imports of consumer goods.

The key to any growth economy is accountability and institutions working in their limits. Pakistan has neither of it.

 

[Olympus81]

Economy growth pre requisites
- Political Stability
- Strong Institutions working within their limits
- Strong justice / arbitration system
- Strong accountability

Macroeconomic challenges
- Controlling CAD
- Increasing exports
- Educated Human Resource

The solutions are simple. Implementation of the aforementioned policies is difficult.

For example, what message are you giving potential investors when a crook is a PM, when some institutions interfere with total impunity.