Pakistan's economy in one graph.

[Indus Pakistan]

This graph also lays it bare why PTI government is having problems. You can see the deficit. The imports are like a skyscraper. Exports on the other hand are miserable. The imports are nearly 3 times more than exports with nearly $40 billion gap.

But if you look at Musharaf's tenure although imports are booming but exports also doubled in size.

The problem began in Musharaf's tenure with 2003 being the start point. It's no good exports increasing but imports doubling. That is like climbing 5 steps but then stepping 15 back ~ leaving you ten steps below where you began.

This is really interesting. I actually remember back in the 1990s and early 2000s how new cars weren't that common on the roads. But since 2015, you see a lot of them, like too many. I'm not being sarcastic, but the image fits the economy -- shiny words (or cars), rotten foundations (or roads).

This is where rentier economy comes in. When demand driven by splurge in US grants began to take place in 2002 the government should have placed strict import controls including cars and used that opportunity to build up real, sustainable import substitute industry that in time would also begin to export.

So for instance in the auto sector government should have gone in for just two cars. Small and medium by one manufacturer with empasise on making as many cars as cheap as possible. Volume and price. The goal being make cars as affordable to the maximum number of people so that even rickshaws would disappear as the owners would upgrade to cars.

As the skills needed in making huge number of cars at cheap prices would build up and efficiency would set in, foreign markets like in Africa, South America/Middle East could be explored where customers are price concisous. In time the quality could be upgraded and the seed would have grown into a global car maker. This is the model south Korea followed with Kia, Hyundai etc. Even Malaysia with Proton. In India the Morris clone called Ambassador was king in 1970s, 80s, 90s, 2000s. It was a ugly car but it was made in mass numbers and India developed the skills of mass manufacture. It laid the seeds of a proper car industry and you can see how today Indian companies have spread abroad with Jaguar/Range Rover being Indian now.

no chance of this in Pakistan as it would take way the choice for the elite/middle class. So in Pakistan we opened 'darzee' shops. Toyota comes in to assemble one model with local partner. Production 5,000 cars. another 'Darzee' opens to assemble Honda's. Another 'darzee' to assemble another 10,000 Nissans etc. And for the super-rich leave loop holes so they can can import luxury brands. And you see the result today. It created a artifical good feeling until the country has gone bust.

As usual, the origin of everything bad traced to Musharraf's era. Until then both imports and exports were following each other closely.

Indeed. At least both lines were roughly in tandem. Then under Musharaf exports exploded skywards .... and it continued under Zardari, Nawaz until CRASH !

 

[war&peace]

Indeed. At least both lines were roughly in tandem. Then under Musharaf exports exploded skywards .... and it continued under Zardari, Nawaz until CRASH !

Now, looking back at his era, I can see that all that economy was artificial as some peanuts were given upfront to that shameless dictator for accepting the humiliating conditions of war of terror. No significant investment entered Pakistan. Only the real estate sector which is the least productive from economy growth perspective and counter productive for exports and agriculture.
He did not even bother to build a single dam using his power and absolute authority.. a shameless rat.

 

[Hakikat ve Hikmet]

Our people are dum however too many think imrans done it in 9 months

Our previous governments just coasted making merry without giving a fcuk about the structural flaws in our economy

I will always say this Pakistan is a 200 million state with enourmous potential but need to fix the basics and we will hit a few decades of high growth

If only we could explain to the idiots why our current problems are occurring

According to Ibn-I Haldun, the father of the modern Political Science (Ottoman statesmen followed him to a great extent), 10-15K folks have the real power in any state. If they work in harmony toward a common goal great stuffs can be achieved!!! The problem is to get them at the first place....

 

[Crusher]

That is what I meant that is why I said people had nothing to buy domestically and they started importing means production never went up instead spending went up and country begin to rely on imports. In simple means if you look at Nawaz era they cashed on progress made by Hafiz ................

Or in other words, adamkhor sher kay munh ko insan ka khun lag gaya.

 

[Indus Pakistan]

The sad part is. To adjust this contorted economy back into shape will require some serious pruning and knocking. Unfortunately this is going to hurt and the public will blame PMIK. It's going to cost him dearly. Ony hope is the economy can be partly fixed [it's going to take more then one term to fully fix it] and going into the election PMIK does what everybody else did. Give the public injection of cash and make everybody feel good and then once he wins again back to serious job of fixing for long term good. There is something called political myopia which is tendancy for systems to only look at what is good today and for next 12 months. Pakistan badly needs to think long term. Like Chinese do to decades ahead. Nothing more exposes the political myopia then the failure to build dams. think about this. Did Musharaf not know we would run out of water and face energy shortages? We can't live on what President Ayub did way back in 1960s forever. He did not because dams have long gestation periods. He was only interested in extending his illgitimate government by dangling goodies gained by pawning Afghanistan to India.

 

[BHarwana]

This graph also lays it bare why PTI government is having problems. You can see the deficit. The imports are like a skyscraper. Exports on the other hand are miserable. The imports are nearly 3 times more than exports with nearly $40 billion gap.

The problem began in Musharaf's tenure with 2003 being the start point. It's no good exports increasing but imports doubling. That is like climbing 5 steps but then stepping 15 back ~ leaving you ten steps below where you began.


This is where rentier economy comes in. When demand driven by splurge in US grants began to take place in 2002 the government should have placed strict import controls including cars and used that opportunity to build up real, sustainable import substitute industry that in time would also begin to export.

So for instance in the auto sector government should have gone in for just two cars. Small and medium by one manufacturer with empasise on making as many cars as cheap as possible. Volume and price. The goal being make cars as affordable to the maximum number of people so that even rickshaws would disappear as the owners would upgrade to cars.

As the skills needed in making huge number of cars at cheap prices would build up and efficiency would set in, foreign markets like in Africa, South America/Middle East could be explored where customers are price concisous. In time the quality could be upgraded and the seed would have grown into a global car maker. This is the model south Korea followed with Kia, Hyundai etc. Even Malaysia with Proton. In India the Morris clone called Ambassador was king in 1970s, 80s, 90s, 2000s. It was a ugly car but it was made in mass numbers and India developed the skills of mass manufacture. It laid the seeds of a proper car industry and you can see how today Indian companies have spread abroad with Jaguar/Range Rover being Indian now.

no chance of this in Pakistan as it would take way the choice for the elite/middle class. So in Pakistan we opened 'darzee' shops. Toyota comes in to assemble one model with local partner. Production 5,000 cars. another 'Darzee' opens to assemble Honda's. Another 'darzee' to assemble another 10,000 Nissans etc. And for the super-rich leave loop holes so they can can import luxury brands. And you see the result today. It created a artifical good feeling until the country has gone bust.

Indeed. At least both lines were roughly in tandem. Then under Musharaf exports exploded skywards .... and it continued under Zardari, Nawaz until CRASH !

So what was the problem? Money came in and govt spent it on what? PML-Q gave so much electric connections and roads but never improved the production of commodities and processing and economy got a spending boom which led to high electric consumption and load shedding in coming PPP era which they were not able to handle and this led to high import of fuel to meet energy needs and consequently increased production cost. Result export became more expensive and started declining. In Nawaz era a lot of money came in due to CPEC but the goons spent it on metro and orange line without spending anything on energy generation. If funds were diverted to dams this all could have been avoided. Yet they did the opposite and kept on spending on project which increased the energy short fall. If there is more money coming into your economy then the growth must be controlled. Extensive growth is very dangerous and interests rates should be hike along it. Then rupee depreciation should be done every month slowly and percentage of rupee depriciation should be lower than interest rate this deter less profit for people who invest in dollar as they are getting more from interest in banks.

This saves the economy from becoming a bubble. It makes income growth even and keeps economy on a normal path.

 

[Kambojaric]

On top of that Musharrafs era saw practically no serious investment in the countries power generation capacity, whilst increasing purchasing power meant a growing middle class could increasingly afford power intensive appliances like air conditioners. The power situation runs pretty much parallel to the trade deficit graph. Thank god for CPEC that money is now being invested in power generation but certainly these three again have to take a major blame here for years of ridiculous power shortages, especially Musharraf and "shortcut" Aziz.

The sad part is. To adjust this contorted economy back into shape will require some serious pruning and knocking. Unfortunately this is going to hurt and the public will blame PMIK. It's going to cost him dearly. Ony hope is the economy can be partly fixed [it's going to take more then one term to fully fix it] and going into the election PMIK does what everybody else did. Give the public injection of cash and make everybody feel good and then once he wins again back to serious job of fixing for long term good. There is something called political myopia which is tendancy for systems to only look at what is good today and for next 12 months. Pakistan badly needs to think long term. Like Chinese do to decades ahead. Nothing more exposes the political myopia then the failure to build dams. think about this. Did Musharaf not know we would run out of water and face energy shortages? We can't live on what President Ayub did way back in 1960s forever. He did not because dams have long gestation periods. He was only interested in extending his illgitimate government by dangling goodies gained by pawning Afghanistan to India.

Somebody once told me Pakistans worst enemy is not India or Israel but the Pakistani people. The trade deficit has declined impressively in recent months and yet people are blaming IK. When previous governments devalued the currency it was great, now it is terrible. I have said this before and will say this again, I am not a PTI "supporter" and will critize the party when they deserve it (Peshawar metro viz a viz the Punjab ones), but so much of the criticism over the past several months is so blatantly dishonest and hypocritical that even those like me who want to honestly criticize the government take a step back for fear of being lumped in with these hypocrites.

PTI increasingly it seems is going to have to clean the mess created by Musharraf and those after him, and yet will unfortunately have to take the blame for this as many people are simply not mature enough to understand what has happened with the country over the past two decades.

 

[Indus Pakistan]

Pak economy meant to go down because if u follow jew system u get punished by ALLAH

Can you please make a complaint to Allah for being unfair and overlooking these filthy rich countries that follow the 'jew system'.

• Israel
• UAE
• USA
• UK
• France
• Singapore
• Qatar
• Turkey
• Russia
• China
• Malaysia
  
• etc

 

[American Pakistani]

What is stopping Pakistan to slash the imports now?

It's not too hard, just need a firm leader to do so. The gasoline prices should be doubled for residential consumers, to start with. Next should come the ban on all imported cars or a tax which is at least 5 times the price of car.

 

[Super Falcon]

Can you please make a complaint to Allah for being unfair and overlooking these filthy rich countries that follow the 'jew system'.

• Israel
• UAE
• USA
• UK
• France
• Singapore
• Qatar
• Turkey
• Russia
• China
• Malaysia
  
• etc

They lick jew bals so they arerich and half if them rich due to oil resources and they dont have much population to distribute or use its wealth again who manuplate world ecnomy

Yes i complain we have our mistak ed but look who dont follow jew system after having resources still their economy suffers or get attacked

Libya
North korea
Iran
Etc