Pakistan Cut Public Debt in Half On Musharraf's Watch in 1999-2008

[TigerOfMysore]

Ok I know I'll get some flack for this, but Musharraf era economics is exactly why we find ourselves where we do. Shaukat Aziz the supply and consumption side banker from North America thought he was in the US, where you can run massive deficits and still manage inflation due to the strength of the prevailing currency. Shaukat Aziz put Pakistan done a huge consumption and consumer binge. This resulted in a consumer driven growth of GDP, not a manufacturing based growth. Without a strong currency back-stopped it was invariably going to crash into massive deficits and inflation. So before we give Musharraf credit for some economic miracle (such as Debt to GDP ratio), keep in mind GDP was inflated through consumer spending. Basically free credit. Once that stopped the deficits run through those years started piling and the rest is history. Here is a perfect example of this: The only one trying to reverse this trend is IK and PTI.

 

[SoulSpokesman]

@RiazHaq

Brof sb has mentioned that India got USD 66 bn to Pak's 44 bn. What he has carefully omitted to say is that India is 7 times larger than Pak and in relation to population and GDP US Aid is only a fifth in proportion to Pak.

Regards

 

[Mav3rick]

Wrong, debt to GDP is 72%

If you check the first page, the graph is almost touching the 90% line representing % of GDP. Google says it is over 80% currently. In any case, the debt to GDP ratio has grown under the incumbent; more so than the 2 previous tenures combined (almost).

 

[Mav3rick]

@Mav3rick

If you recall in the late 1990s and early 2000s Pak had set up lots of oil fired boilers under rental companies. There was much to be said for that strategy, such plants have low capital costs, very short gestation period and quite flexible in their operations. Until mid 2000s or so oil prices were low, so costs were also quite competitive.

Things of course turned turtle after 2005 or so. With oil prices going up dramatically, all these oil prices went through the roof. Oil based generation became infeasible and Pak was saddled with large capacity charges. And given that new coal fired plants of large scale require 4-5 years to set up, Pak was clearly caught on the wrong foot.

One can argue that his advisers should have known better and pushed for coal and hydro but it is easy to be wise in hindsight. Had Pak been as well blessed with coal as India is, perhaps the advisers would have followed a different line.

Regards

I a not aware of what we did in the 80's or 90's. I am also not too convinced on dependence on Coal based Plants. Although that I wonder if we had many options through 2010 to 2015 to decide and act on filling the gaps. In any case, even the current lot is not so smart when we consider our direction; we are still generating expensive energy (now largely due to the massive devaluation which effects the payments that the end user has to pay). We are still nowhere near what our renewable energy goals should be and our reliance on Nuclear is increasing instead of decreasing.

We have abundance of sunlight and air corridors which we can utilize to setup hybrid solar/wind power generation systems and if we start now, we can be there in 15-20 years. We do not have money to invest in anything and hence we will need to invite investors to do so on BOT basis. In the meantime, we need to think out of the box like Brazil and investigate if we can follow a similar line as we also have abundance of sugarcane and corn production to produce ethanol for replacement of imported fuel.

 

[Thorough Pro]

That was the price of the leash around our necks, people with no honour keep boasting about the great achievement of begging the world to defer (delay) the loan payments and showing superb results in the short run, while enjoying the American leash around his neck.

Pakistan Cut Public Debt in Half On Musharraf's Watch in 1999-2008

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

Pakistan Cut Public Debt in Half On Musharraf's Watch in 1999-2008

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

 

[Wood]

I don't see Musharraf becoming the Prime Minister of Pakistan anymore. But if he does, then Americans will be most delighted

 

[Meengla]

Conspiracy theorist will always says nawaz sharif got nothing and mushi got everythibg

They think like pakistan usa has money laundering black books worths billions of dollars

Correct.
You are a numbers guy and you have rightly compared with Musharraf got versus what others got after him.
Musharraf's rule was sort of similar to Imran Khan's current rule. Stabilization of the economy was achieved. There was comparative less corruption in Musharraf era. Karachi had peace and thrived--contributing to Pakistan's economy. But most important consideration was stability: After a decade of political instability in Pakistan (1988-1999), some sort of stability was introduced for roughly another decade and Pakistan benefited from that. Not rocket science. Look at Bangladesh under Haseena!
But those who want to hate Musharraf would hate everything had did--however good they were. I HATE General Zia ul Haq but I never accuse him of personal corruption and I concede that Pakistan's economy was not so bad under him.

I don't see Musharraf becoming the Prime Minister of Pakistan anymore. But if he does, then Americans will be most delighted

You over-estimate American influence on Pakistan. It is the Pakistani Deep State which defines major policies and intervenes when the country's economy/stability is too precarious.

 

[RiazHaq]

Ok I know I'll get some flack for this, but Musharraf era economics is exactly why we find ourselves where we do. Shaukat Aziz the supply and consumption side banker from North America thought he was in the US, where you can run massive deficits and still manage inflation due to the strength of the prevailing currency. Shaukat Aziz put Pakistan done a huge consumption and consumer binge. This resulted in a consumer driven growth of GDP, not a manufacturing based growth. Without a strong currency back-stopped it was invariably going to crash into massive deficits and inflation. So before we give Musharraf credit for some economic miracle (such as Debt to GDP ratio), keep in mind GDP was inflated through consumer spending. Basically free credit. Once that stopped the deficits run through those years started piling and the rest is history. Here is a perfect example of this: The only one trying to reverse this trend is IK and PTI.
View attachment 811172

Contrary to what Musharraf bashers dismiss as "aid-fueled " or "consumption-driven" economy in 2002-2007, the economic growth was actually driven by private savings and investments. Private domestic savings rate was over 18% of GDP in Musharraf but has slumped to just 7% in recent years. Pakistan attracted record foreign direct investment (FDI) in telecom, banking, manufacturing and other sectors of the economy. Annual FDI flow into Pakistan reached $5.4 billion in Year 2007-08. As to US aid during and after Musharraf's years in office, it has actually tripled in size from $700 million in 2007-8 to $2.1 billion since 2010. If aid alone were responsible for economic growth, then the GDP growth rate should have accelerated, not plummeted, after Musharraf left office.

Pakistan FDI as Percent of GDP (Source: World Bank)

In addition to the economic revival, Musharraf focused on social sector as well. Pakistan's HDI grew an average rate of 2.7% per year under President Musharraf from 2000 to 2007, and then its pace slowed to 0.7% per year in 2008 to 2012 under elected politicians, according to the 2013 Human Development Report titled “The Rise of the South: Human Progress in a Diverse World”.




Overall, Pakistan's human development score rose by 18.9% during Musharraf years and increased just 3.4% under elected leadership since 2008. The news on the human development front got even worse in the last three years, with HDI growth slowing down as low as 0.59% — a paltry average annual increase of under 0.20 per cent.

Rising University Enrollment in Pakistan Starting in 2001-2002. Source: ICEF Monitor

Going further back to the decade of 1990s when the civilian leadership of the country alternated between PML (N) and PPP, the increase in Pakistan's HDI was 9.3% from 1990 to 2000, less than half of the HDI gain of 18.9% on Musharraf's watch from 2000 to 2007.

Musharraf Earned Legitimacy By Good Governance

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[Norwegian]

Regardless of which Pakistani regime got more aid, let's all agree that only Israel actually put that money to proper use...

Our leaders and elites squander every opportunity given to them. They leave us to debate which of them was worse, which only serves to help them return to power while at the same time creating disunity among Pakistanis. It's a real shame.

Israel used its military aid from US for propping up its defense industry which now has billion dollars export a year. Pakistani leaders were not intelligent like Israelis unfortunately

Israel's defense exports up 15% in 2020

en.globes.co.il

@dani191 @Beny Karachun @500 @sammuel @Natan @Trango Towers @Trench Broom @CatSultan @Falcon26

 

[SoulSpokesman]

@Mav3rick

Although that I wonder if we had many options through 2010 to 2015 to decide and act on filling the gaps.

Actually, you have hit the nail on the head. By 2008-10, it was clear that Pakistan was facing a serious energy crisis. At THAT point of time, coal and nuclear were the only possible options - solar was way TOO expensive at that point of time and wind too unreliable. Pak policy makers were left with no option but to opt for coal based generation, which now in hindsight looks a bad bet. But as we have discussed earlier, it is easy to be wiser after the event.

We have abundance of sunlight and air corridors which we can utilize to setup hybrid solar/wind power generation systems and if we start now, we can be there in 15-20 years.

I think Pakistan is already working in that direction; in any case events worldwide will push Pakistan in that direction willy nilly.

We do not have money to invest in anything and hence we will need to invite investors to do so on BOT basis.

That is OK. Every modern economy generates power through private capital owned plants.

In the meantime, we need to think out of the box like Brazil and investigate if we can follow a similar line as we also have abundance of sugarcane and corn production to produce ethanol for replacement of imported fuel.

It is certainly worth a thought. But go for sugarcane, not corn, as long as it uses water rationally. Corn is too energy inefficient.

I wonder if dear Niaz sb ( @niaz ) still posts these days. He is better equipped to answer these questions than anyone here.

Regards

 

[Yeti786]

Perhaps with at least a second term for PTI, Pakistan too can get back to similar metrics (such as Debt to GDP) by 2028.

Yes perhaps with another GDP rebasing. No thank you.

Running a country is not an experiment where 'Perhaps' it might work or maybe not. Let's move on to next best alternative.

 

[Norwegian]

Exactly, no military regimes have brought about reforms for instance Pak penal code is still based on 1860 code while criminal procedures on 1898 code.

Exactly. PM Imran Khan has changed Pakistan penal code now after 75 years. What a shame!

Govt introduced reforms for rule of law in Pakistan: PM Imran

dunyanews.tv

 

[Yeti786]

@RiazHaq

Brof sb,

High time Brigade 111 did its patriotic duty?

Regards

Had they focused on their job only Bangladesh would've been ours.

It's high time you stopped living in la la land.

 

[Wood]

You over-estimate American influence on Pakistan. It is the Pakistani Deep State which defines major policies and intervenes when the country's economy/stability is too precarious.

My comments are not about American influence in Pakistan. It is just that Americans seem to value dealing with the Pakistani military leadership more than dealing with its civilian politicians. Musharraf is a known commodity for the US and I'm sure that the relationship goes both ways.

Regarding American influence - I think that American influence is irresistible for all countries in South Asia, regardless of their ideological affiliations.

 

[Maula Jatt]

I don't see Musharraf becoming the Prime Minister of Pakistan anymore. But if he does, then Americans will be most delighted

Leave him alone, let him party in his retirement