Market nosedives as hopes of Chinese aid die down .

[ziaulislam]

all markets runs on speculation. wonder why people take it so serious.

Shows how little EDUCATED people understand the economy and hence nobody cares/votes to the right people

 

[BHarwana]

https://twitter.com/x/status/1059747013594636289

 

[alee92nawaz]

aik to wo ham ko karzay dain .... oper say un ke top brass airport per hamain red carpet welcome bhe karay ... yeh kuch zida nahi ho gaya ...

but this is not an issue who received him at airport, i consider it a very big achievement that both countries are agreed on bilateral trade in local currencies it will reduce the pressure on US Dollar and will eventually bring its value down

Not in local currency. It's in yuan only i think

 

[Tshering22]

Things work completely differently in Pakistan. Our genius FM has decided to create a sovereign "wealth" fund consisting of heavily indebted and loss making public sector companies. The profitable ones will not be included in this wealth fund

Fact is these enterprises have to be shut down. There is no way to turn them around as long as they remain under public sector administration and the private sector will not invest in them because they are technically bankrupt. The country has a terrible reputation so it can't really attract foreign investors. However, shutting these companies down is hard for our weak government because it'll mean mass retrenchment of workers. So they are going to kick the can down the road instead.

Our debt to GDP ratio is approaching 80%. Meanwhile we have one of the lowest tax to GDP ratios in the world so we won't be able to service this debt burden. All the borrowing that the PTI is now doing to stabilize the economy will also add to that. There is no plan to cut down on debt.

I never knew that you guys also had the socialist problem of government "job guarantee". This feature came into India due to Soviet influence of socialism and 'providing job to everyone'. How come you guys have it, considering you rapidly moved towards a US-style system?

You'd be surprised that even we don't have a fully national owned sovereign wealth fund. There are joint funds with Japan, UAE, South Korea etc, but not standalone one.

Not having sovereign wealth funds and corporate managed systems leaves our respective economies very exposed to foreign manipulations in the long run. This is dangerous.

 

[Abdussamad]

How come you guys have it, considering you rapidly moved towards a US-style system?

Jobs for the boys basically. Politicians inducted their workers into government departments and state owned companies.

Sovereign wealth funds are for countries with natural resource wealth not for Pakistan or India. Oil rich countries for instance. These countries suffer from dutch disease if they repatriate all their oil earnings in one go. So in order to avoid that they have to invest their oil wealth abroad and derive a steady income from it instead. This stabilizes their economy which would otherwise suffer from booms and busts alongside the rise and fall of global oil prices.

Pakistan is not oil rich but we do suffer from dutch disease too. Our problem is that our strategic position in the region allows us to get repeated bailouts from foreign powers without having to reform our economy. This results in an overvalued exchange rate that discourages domestic manufacturing and exports.

What Mr. Umar is proposing is not a wealth fund at all. It's wrong to call it that.

 

[Kompromat]

This news turned out to be fake.

 

[prashantazazel]

I never knew that you guys also had the socialist problem of government "job guarantee". This feature came into India due to Soviet influence of socialism and 'providing job to everyone'. How come you guys have it, considering you rapidly moved towards a US-style system?

You'd be surprised that even we don't have a fully national owned sovereign wealth fund. There are joint funds with Japan, UAE, South Korea etc, but not standalone one.

Not having sovereign wealth funds and corporate managed systems leaves our respective economies very exposed to foreign manipulations in the long run. This is dangerous.

Even capitalist countries have this problem. People in government jobs even in the US, consider it extremely safe.

 

[valkyr_96]

Shows how little EDUCATED people understand the economy and hence nobody cares/votes to the right people

The problem is not the poor uneducated people its the rich educated but not so educated people. Just take the example of the media companies crying about loss in revenue from government advertisements. Government ads are never a constant stream of revenue and mostly to "inform" the people of the so called progress that the incumbent government is bring to the "masses". These newspapers can expand by an equity offer or banking lines, but they won't because as a private organization they can claim foreign funding without declaring it.Both Banks and IPOs will allow unprecedented scrutiny of financials, agency costs, salaries and taxes which is not in their interests. Furthermore, if the newspaper fails there will be change of management that is a big no-no.

 

[valkyr_96]

I never knew that you guys also had the socialist problem of government "job guarantee". This feature came into India due to Soviet influence of socialism and 'providing job to everyone'. How come you guys have it, considering you rapidly moved towards a US-style system?

You'd be surprised that even we don't have a fully national owned sovereign wealth fund. There are joint funds with Japan, UAE, South Korea etc, but not standalone one.

Not having sovereign wealth funds and corporate managed systems leaves our respective economies very exposed to foreign manipulations in the long run. This is dangerous.

The point of the sovereign wealth fund is just like any other fund you manage what reserves you have in order to dampen any external pressures, in this case, on the economy. The oil producing countries used their funds to mitigate the risk of low oil prices ensuring there was no slump in the economy. In the case of the Venezuela, the government dipped into the their sovereign wealth fund unnecessarily, expecting the prices will never fall and we can see the result.

Pakistan does not have big export oriented PSEs most of our oil & gas is for local consumption. Pakistan can invest in other funds but it would be difficult to do so because the ever-present financial turmoil every old government passes on means that risk and return profile will not meet the investment profiles of most sovereign funds that have a longer time horizon and are invested in new and upcoming technologies. What Asad Umar has suggested that companies such PIA should be independent of government influence with a separate management and its performance and remedy be linked to market forces/indicators (golden shares or whatever latent form of influence that needs to be retained or not). This is important because leftist party PPP like to interfere in PSEs give undue employment and generally have no understanding of finances. Next, our last PM from PMLN government was the owner of Airblue, a successful private airline -therefore no motivation to improve performance/management,hence problems like drugs mules/repeatedly leaving behind dead bodies to move revenue generating cargo etc. Meanwhile serene air shows up. PIA can become competitive but it is evident no one wants it to succeed.

Lets be clear successful large companies in both aerospace/engineering and airlines receive subsides from their incumbent government as they employ large amounts of people. There is a reason why "100 tola F sola" happens because if Lockheed Martin wants to retain its workers the US government need to make those sales. Same pressure was applied to indian steel companies in Europe during the slump following the financial crisis 2008/9.

I can add many thing to this but whats the point.