Pakistan borrows record $16b in just one year

[War Thunder]

The high magnitude of this borrowing could be avoided by proper management of economy but govt failed in this aspect due to inexperience

And all logic goes to eat grass in the meanwhile?
Care to read other replies before just dropping in with just anything?

 

[Ghareeb_Da_Baal]

meanwhile in India....................................

 

[_Sherdils_]

As long as the debt is being used to create more wealth in any way or fashion it's fine.

Previous debt was amassed just to chill and enjoy mostly.

 

[guest9999]

The new debt is increasing because you have to pay back the old debt which has matured now. The debt will continue to increase until it peaks in a few years. Hopefully by then, everyone pays their taxes and the economy grows organically.

 

[Indus Pakistan]

Since the PTI has come into power we are hearing three main issues i.e. corruption, tax issue, trade deficit, and debt crisis.

Although we all know the basic socio-economic problems Pakistan is facing since independence. The PTI was the only government which at the beginning was looking, solution providers. Since coming into office, the PM Imran Khan has realized that describing solution is easy but implementation needs dire research work and courage.

The complex economic conditions and complex economic policies are not easy to unwind. In the current fiscal year 2018-19, the government has taken a record-high foreign loan which touches at $16billion in total.

Out of $16 billion, $13.6 billion was solely taken by the PTI government. $2.4 billion was taken by the caretaker government under Shahid Khakan Abbasi. $5.5 billion was awarded by Qatar, Saudia Arabis and the United Arab Emirates. $6.7 billion was external borrowing from China.

In the beginning, Pakistan has not shown the external borrowing from China but the international pressure from IMF and WB has shown these loans in total external debt figures.

The point here is that how long Pakistan can survive under debt crisis. The recent relief from the FATF blacklist has proved some space to breathe. But this is short term relief as the FATF has extended its period for Pakistan to settle its accounts.

The PTI internal policies to generate revenues from Tax Collection, Anti-Corruption measures, Tourism, Small business schemes, and policies in agriculture and trade seem insufficient to cater to national socio-economic problems and external debt crisis.

What do you think policies can bring positive change in the above-given scenario?

Look it's very simple. Let's just take the example of a individual. He she has to garner x amount of money to survive. The person has two choices ~

• 1. earn money through effort either illegal or legal.
• 2. borrow money from friends, family, banks etc.

If anybody know third way please let me know. I suppose there is the 'luck' card where money falls into your hands but let''s face it that is rare. I suppose it can happen and in case of a nation state finding oil or gas or some other natural resource is same thing as 'luck'.

Now specifically looking at Pakistan the problem is the state has been living well above it means. Meaning the person is spending more then earning. So what has the state done? I has borrowed. Borrowing is okay but as long as you know what you borrow can be used to make more money and being able top pay it back. In Pakistan's case lot of the borrowing has been used to feed good life. Like a person borrowing but then instead of investing buying cars, luxury holidays and clothes. Eventually when the money has ran out the peson can't pay back the money. This is where Pakistan is today.

Solution? Simple. everybody has to begin paying tax. Instead of fcukin crapping on about ummah, Islam, Muslim, Allah, Jews, Ahmedi's, how much they love Pakistan, Pakistan kya matblab just fckin pay your tax. Statistics show Pakistan has one of the lowest tax base in the world. That means when you walk around Pakistan vast majority, in exess of 90% are cheats and fraudi's. They are defrauding the state of Pakistan but they think by giving some charity, sprouting a beard, keeping to daily Islamic rituals they everything is halal. It is emphatically not.

Paying taxes is the first manifestation of patriotism. If you don't pay tax how can you possibly croak on about Pakistan? When you use it's services but then don't pay for them. If % of taxpayers in Pakistan increased to same as India the economic problems Pakistan faces would evaporate overnight.

 

[VCheng]

As long as the debt is being used to create more wealth in any way or fashion it's fine.

Previous debt was amassed just to chill and enjoy mostly.

Debts being accrued by every present government is power = good.
Debts accrued in the past by all previous governments = bad.

Rinse.

Repeat.

 

[Indus Pakistan]

Debts being accrued by every present government is power = good.
Debts accrued in the past by all previous governments = bad.

Very true but the real test is can the government increase tax %. If it can then it will be able to address lot of the structural issues in the economy.

 

[VCheng]

Very true but the real test is can the government increase tax %. If it can then it will be able to address lot of the structural issues in the economy.

To be honest, every government claims a steady rise in GDP and tax revenues, at least while they are in power.

 

[Indus Pakistan]

And I think it will manage to increase the %. Despite being a coalition government it has proved to have mettle when required. Examples of how Rizvi's TLP was sorted out or how Asia Bibi was 'exported' show this government has the backbone. I think lot of the strength comes from having the military in support of the government.

 

[Imran Khan]

i hate to talk on politics

 

[Indus Pakistan]

To be honest, every government claims a steady rise in GDP and tax revenues, at least while they are in power.

This government can't claim anything because the process has barely began. However I think they will make greater progress then other governments because they have the military behind them. A word or two about military in Pakistan.

Nations at times have ovesized militaries. Britain pre WW2. USA pre 1980s. Germany pre 1945. South Korea pre 1990. Japan pre 1945 etc. When this happens it is follish to imagine that the shadow of military will not loom over the affairs of those states. Think of USA. President Eisonhower was a military man who made his name in WW2. Field Marshal McArthur's shadow loomed large until it was clipped. Pakistan also finds itself where the need for large military means it's shadow looms large and it has to be harnessed in the interests of the state. Thus I see the military/PTI combine as a rare opportunity or the dream team that can get things done.

 

[VCheng]

This government can't claim anything because the process has barely began. However I think they will make greater progress then other governments because they have the military behind them. A word or two about military in Pakistan.

As I have said many times before, let us give this government its full term in office. Then we shall see.

I think lot of the strength comes from having the military in support of the government.

It is the true government, after all.

 

[ziaulislam]

Pretty simple you have to finance your CAD..so its obviously going to be high given we saw the highest CAD that is coming down now
Second your reserves were in negative (after swaps) u had to cover that

 

[MastanKhan]

The complex economic conditions and complex economic policies are not easy to unwind. In the current fiscal year 2018-19, the government has taken a record-high foreign loan which touches at $16billion in total.

Out of $16 billion, $13.6 billion was solely taken by the PTI government. $2.4 billion was taken by the caretaker government under Shahid Khakan Abbasi. $5.5 billion was awarded by Qatar, Saudia Arabis and the United Arab Emirates. $6.7 billion was external borrowing from China.

In the beginning, Pakistan has not shown the external borrowing from China but the international pressure from IMF and WB has shown these loans in total external debt figures.

The point here is that how long Pakistan can survive under debt crisis. The recent relief from the FATF blacklist has proved some space to breathe. But this is short term relief as the FATF has extended its period for Pakistan to settle its accounts.

The PTI internal policies to generate revenues from Tax Collection, Anti-Corruption measures, Tourism, Small business schemes, and policies in agriculture and trade seem insufficient to cater to national socio-economic problems and external debt crisis.

What do you think policies can bring positive change in the above-given scenario?

Hi,

You just joined the forum and the first things coming out of your mouth is incorrect information---.

This silly comment you can share with your friends & family and they might agree---. $13.6 billion allegedly taken by pti---it is technically not possible in such a short time---.

It maybe taken by the govt to payoff debts---that is something different than naming pti---.

When you name PTI---you are saying that it was stolen or something similar---.

 

[shining eyes]

i get that the deals have been agreed upon on taking that much loan - The actual amount received is lower than that...
However, my question is how much of that money has been used for repayment of loan and interest payments?
i would appreciate a more detailed analysis of inflows and outflows.
Thanks,