Pakistan agrees to depreciate rupee In talks with IMF

[H!TchHiker]

If and when it touches 125, their economy in dollar value terms will crash by 20%. Lets see how they'll avoid that.

Little calculation of how did you arrive this magical figure of 20 % will help us to learn..

 

[somebozo]

Best place to start is textiles as its easier , doesnt require skill labour and we have raw material (unlike countries like Bangladesh )
We just need good policies

If textile was competitive , first world would still be producing it.
They arent..textiles is for countries we have no choice between starving to death or working for $2 a day..

 

[ziaulislam]

If textile was competitive , first world would still be producing it.
They arent..textiles is for countries we have no choice between starving to death or working for $2 a day..

correct
and that is where Pakistan is, most of our people income is les than 2$

unless you bring 90% of education, and produce skilled workers, you cannot move forward, so far we are not doing that..no emphasis on vocational education

for unskilled workers, textiles is next best, especially if you have raw material at hand

countries like Bangladesh who has no raw materials is exporting over 30 billion dollars worth of textile

If and when it touches 125, their economy in dollar value terms will crash by 20%. Lets see how they'll avoid that.

wrong inflation will happen and it will be adjusted
the very reason why currency should be allowed to move independently which was not done due to political reasons
i doubt though it will pass 110, if it does it would be temporary passing 110 would mean the loss of more than 15%

since IMF has been quoting 5-20% the rupee already lost 5%

 

[protest]

correct
and that is where Pakistan is, most of our people income is les than 2$

unless you bring 90% of education, and produce skilled workers, you cannot move forward, so far we are not doing that..no emphasis on vocational education

for unskilled workers, textiles is next best, especially if you have raw material at hand

countries like Bangladesh who has no raw materials is exporting over 30 billion dollars worth of textile


wrong inflation will happen and it will be adjusted
the very reason why currency should be allowed to move independently which was not done due to political reasons
i doubt though it will pass 110, if it does it would be temporary passing 110 would mean the loss of more than 15%

since IMF has been quoting 5-20% the rupee already lost 5%

I am not talking about GDP growth but GDP in dollar terms. Seriously don't quote me and make fool of yourself.

 

[313ghazi]

Pakistan needs to get out of textiles and agriculture produce economy.
We were once the rising star of industrial economy in Asia..
then Bhutto struck with nationalization to destroy the industry and put agrarian hoards in the parliament.

I disagree about the agriculture bit. We 100% need to make sure all the food we need as a country is grown inside the country. Right now we have a country where laborers cannot afford to eat even daal. Any country who imports it's food is a failure. The moments imports stop - you starve.

Little calculation of how did you arrive this magical figure of 20 % will help us to learn..

He is trolling, it's what Indians do on Pakistani forums. He has no evidence to backup such a figure, he will simply argue around the issue and not address the question you asked with any credible facts or figures.

Long before Putins twitterbots and CENTCOM leaving pro US statements on Pakistani message boards, Indians were using their 1 billion swarm to sway public opinion on the internet. There is not a single Pakistani forum/twitter handle, news site (in English) that doesn't have Indians trolling there - i challenge anyone to find 1 - just 1. They will masquerade as Pakistani's, others will post as themselves and their aim is the same - to project negativity about Pakistan and influence the conversation in Pakistan. An entire generation has grown up reading comments about Pakistani affairs from an Indian perspective. I have no doubt it is state sponsored - especially nowadays.

Do not consider this just a story, the US, UK, Russia, China, Israel, all do this.

Russia
https://en.wikipedia.org/wiki/Internet_Research_Agency
http://www.bbc.co.uk/news/blogs-trending-41584227
http://www.bbc.co.uk/news/blogs-trending-41203789
https://www.theatlantic.com/interna...ussias-online-comment-propaganda-army/280432/

Israel
https://en.wikipedia.org/wiki/Jewish_Internet_Defense_Force - idf sponsored

Chinese
https://en.wikipedia.org/wiki/50_Cent_Party
https://en.wikipedia.org/wiki/Internet_Water_Army

USA
https://en.wikipedia.org/wiki/Operation_Earnest_Voice

Vietnam (yep Vietnam...lol)
https://en.wikipedia.org/wiki/Public_opinion_brigades

A good piece in the Guardian about them - https://www.theguardian.com/media/2016/nov/06/troll-armies-social-media-trump-russian

Evidence of Indian troll armies
http://www.huffingtonpost.in/2017/0...tands-it-may-turn-on-them-one-day_a_23204198/
http://mashable.com/2016/12/27/bjp-planned-online-trolling/#gkuQXx2PkGqh
https://www.theguardian.com/world/2...nline-abuse-opponents-actors-modi-claims-book
----

It's a fully fledged political strategy called astroturfing - https://en.wikipedia.org/wiki/Astroturfing

Unfortunately mods here and on most Pakistani sites are either unaware, or unwilling to take action.

 

[ziaulislam]

I am not talking about GDP growth but GDP in dollar terms. Seriously don't quote me and make fool of yourself.

i thought you had some basic understanding apprently you dont.
i will explain it in simple words

There are two types of GDP 1. nominal,2. PP
only nominal GDP is affected by devaluation, the effect are mostly temporary if devaluation is slight, as the loss is overset by inflation.
for example, if we produce a kilo of mango that's priced 50 rs a kilo(0.5$), if inflation occurs your GDP PP is unchanged but nominal will drop(as now 50 rs is 0.4$) as mango price 50 is not right price, this will be overset by inflation(total growth=gdp real growth+inflation), as mango will go up next year to 60 rs

this was seen in early 2008-09 with inflation over 20% due to devaluation was done then

problem is political parties have not allowed natural devaluation and end up doing abrupt devaluation which is not good due to being inherently unstable

NOW THIS DOESNT APPLY OBVIOUSLY TO EXTREME DEVALUATION IN CASES OF RUSSIA, IRAN OR ZIMBABWE

the result of losing 10% will simply by 5-10% of inflation than very low levels of 3-4% we have been seeing recently

 

[protest]

i thought you had some basic understanding apprently you dont.
i will explain it in simple words

There are two types of GDP 1. nominal,2. PP
only nominal GDP is affected by devaluation, the effect are mostly temporary if devaluation is slight, as the loss is overset by inflation.
for example, if we produce a kilo of mango that's priced 50 rs a kilo(0.5$), if inflation occurs your GDP PP is unchanged but nominal will drop(as now 50 rs is 0.4$) as mango price 50 is not right price, this will be overset by inflation(total growth=gdp real growth+inflation), as mango will go up next year to 60 rs

this was seen in early 2008-09 with inflation over 20% due to devaluation was done then

problem is political parties have not allowed natural devaluation and end up doing abrupt devaluation which is not good due to being inherently unstable

NOW THIS DOESNT APPLY OBVIOUSLY TO EXTREME DEVALUATION IN CASES OF RUSSIA, IRAN OR ZIMBABWE

the result of losing 10% will simply by 5-10% of inflation than very low levels of 3-4% we have been seeing recently

I was talking about your gdp in dollar terms but you go ahead to explain me nominal gdp vs gdp ppp. Let me put it in simpler terms. You gdp in nominal terms in 2017 is 31862 billion pkr per imf October report. When measured in dollar terms at today's rate assuming 107 pkr per dollar, it is 297 billion. When pkr further looses to dollar, your gdp in dollar terms will still go lower. At 125 per dollar exchange rate, gdp will further go down to 254 billion dollars. And devaluation doesn't improve your rupee circulation.

Also inflation has one more side effect it makes poor, destitute.

 

[ziaulislam]

I was talking about your gdp in dollar terms but you go ahead to explain me nominal gdp vs gdp ppp. Let me put it in simpler terms. You gdp in nominal terms in 2017 is 31862 billion pkr per imf October report. When measured in dollar terms at today's rate assuming 107 pkr per dollar, it is 297 billion. When pkr further looses to dollar, your gdp in dollar terms will still go lower. At 125 per dollar exchange rate, gdp will further go down to 254 billion dollars. And devaluation doesn't improve your rupee circulation.

Also inflation has one more side effect it makes poor, destitute.

yup but inflation will take the 31862 rs gdp to well above 15% within a year(5 real +10 inflation) vs if there had been no drop(5 % real + 3-4% inflation)
so a drop is a temp, this happened when dollar fell from 60 to 80 which was followed by 25%inflationn

 

[HannibalBarca]

Time to buy gold/or $... and rebuy later on that depreciated Rupee...

 

[somebozo]

I disagree about the agriculture bit. We 100% need to make sure all the food we need as a country is grown inside the country. Right now we have a country where laborers cannot afford to eat even daal. Any country who imports it's food is a failure. The moments imports stop - you starve.

Because they continue to reproduce non stop and refuse to raise quality of life.
Stripping resources faster than they can replenish.

 

[undercover JIX]

Because they continue to reproduce non stop and refuse to raise quality of life.
Stripping resources faster than they can replenish.

and this is the reason rich keep getting richer and poor keep getting poorer?

 

[ziaulislam]

Time to buy gold/or $... and rebuy later on that depreciated Rupee...

everyone doing that, in the end if free hand given rupee might gain again, who knows, alot could be panic
by time IMF said rupee was overvalued it was in 90s now its 107 it has already lost 10%

probelm is govt manipulation of rupee, it was artifically kept in 90s back in 2012-13 by PML N govt

 

[313ghazi]

Because they continue to reproduce non stop and refuse to raise quality of life.
Stripping resources faster than they can replenish.

I wish your parents had made the choice to "preserve resources" .

 

[somebozo]

I wish your parents had made the choice to "preserve resources" .

Actually we are only 3 siblings spread over a span of 8 years so they did a good job..

and this is the reason rich keep getting richer and poor keep getting poorer?

If poor people have only one kid, they would create concentration of wealth because the inheritance ratio is 2:1.
However, when poor people have eight kids the inheritance ratio is 2:6 or 2:8 - simply multiplication of poverty...

 

[313ghazi]

Actually we are only 3 siblings spread over a span of 8 years so they did a good job..



If poor people have only one kid, they would create concentration of wealth because the inheritance ratio is 2:1.
However, when poor people have eight kids the inheritance ratio is 2:6 or 2:8 - simply multiplication of poverty...

I'm sorry - my response was inappropriate but you are way out of line. Do you think people need to come from a wealthy background to live a decent life? That is the root cause of problems in Pakistan - everyone thinks they are owed something. Wealth is created - it is not finite and just passed on from generation to generation. All successful nations need to have an economic model where every citizen has the opportunity to create wealth from zero. Passing on wealth helps - but it should not be a pre-requisite to a decent quality of life.

Over the last half a century Pakistani's have become physically smaller, have poorer nutrition, have less education, live in poorer conditions and are unsafer than they ever were. This is not due to having too many people, it's due to the state not managing those people. There are 1 billion Chinese, they utilised those people and they went from burden to asset. The Indians across the border are doing the same. We have a comparatively tiny population, we fail to manage it and have failed to do so for at least 50 years!

This idea of there being not enough to go round, or just have less children to improve conditions is pushed by Europeans onto Asians and Africans to avoid the fact they have a disproportionate amount of the worlds wealth. If we industrialised like you suggested, we'd generate our own wealth. Yes it is easier if there is less people, but the number of people is not the problem, mismanagement of people is the problem!