Potential Silver lining to panga with France - economic discussion only

[313ghazi]

Bhai it's being beyond optimistic to think our economy will somehow grow resilient if EU sanctions and trade barriers or an outright trade ban is imposed on Pakistan.

The EU is our largest export destination accounting for almost 20% of our total exports(1). Conversely Pakistan is a marginal trading partner at best for the EU with only 0.2% of the EUs exports headed to Pakistan(2). Everything that Pakistan exports to the EU is easily replaceable by another country. Textile, sporting goods and surgical equipment is mass produced by dozens of other developing nations who provide these items at affordable prices, so we have no economic leverage over the EU.

Meanwhile 20% of our trade disappearing due to an EU ban will send our economy into complete shock mode. The small to medium sized businesses in Sialkot and Faisalabads would collapse and unemployment and poverty would skyrocket bringing with it a whole host of other problems like criminality, drug abuse, prostitution etc.

A strong argument can also be made that where the EU boycotts one body/nation, its allies or similarly politically aligned nations will follow suit. Countries such as the US, Canada, Japan, Australia which are the main consumers of value added products will also likely take a distance from Pakistan. They might not outright impose a trade ban on Pakistan but are far more unlikely to provide preferential treatment to Pakistan in future trade deals, and understandably so. If the writ of the Pakistani state is so weak that it gives in to the demands of every movement, why should they take an unnecessary risk and increase their economic dependence on such an unpredictable and weak partner.

Reality is reality. We have no economic leverage over the EU or the nations that consume value added products. They have made the rules of the worlds economic game and we have to play it or leave and cry in a corner by ourselves about how unjust it is. Fighters adapt to reality, strengthen themselves and make themselves so strong that other players value them and their opinion. Losers quit playing and drown themselves in self-pity about how unjust the world.

When the British took over political and military control of the subcontinent the Muslim community had two choices. Drown themselves in self-pity which a large section of our community did do, or react to the reality and make a place for ourselves and and our future generations as dignified members of society like Sir Syed did when he established the Aligarh University much to the discontent of a large part of the ulema hazrat of that time. The University gave us alumni Mohammad Ali Johar, Liaqut Ali Khan, Maulana Shaukat Ali, Abdur Rab Nishtar and other leaders and political workers who were instrumental to the Pakistan movement. There is a reason why the Quaid called Aligarh the "Arsenal of Muslim India" (3).

Pakistan in 2021 is also at a crossroads. We can give in to the desire of self-pity which is always the easiest way to deal with a problem or accept reality that the world economic system is driven by a set of countries who currently do not value us or our opinions due to our lack of financial power. Ultimately the goal is for us is to grow economically, make other countries reliant on trade with us and then everyone will listen to our religious sensitivities.


1. https://www.pbc.org.pk/research/pakistans-trade-with-the-eu-its-member-states/
2. https://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_122530.pdf
3. https://www.thenews.com.pk/print/57...votal-role-in-establishment-of-pakistan-shafi

I'm not at all implying that we wouldn't be affected, it would defintely have a significant economic impact if the worst was to happen, I just think the way out from that damage would be to find new markets.

The vast majority of our exports go to the USA, EU, China and Saudi/UAE. We need to look beyond these destinations. There are huge growing markets in the developing world which our businessmen overlook. We just seem to export to wherever we have an expat community or existing relationships.

To do that we'd have to start making things that consumers want to buy, rather than focusing on raw materials, agriculture, cotton - all the stuff we currently focus on.

IF they did that, it would be a silver lining to a dark cloud, but certainly not a fix. At the end of the day most of the money is in the western countries, they're the ones buying things.

 

[airmarshal]

This caricature of the Prophet PBUH must STOP. Period.

The original poster says government will eventually take a u turn. If this is the case, the reason for such fringe extremist parties to exist and to keep up their violent politics is justified.

Making fun of the Prophet is an issue for each and every Muslim, practising or not. When we stop taking action on such issues, we give space to extremism in our society.

This issue must be taken up with EU and French government in no ambiguous terms.

 

[xyx007]

Gov secular mindset is thinking pakistan get poor if we kick out the french ambassador and keep ignoring prophet respect. Aint we muslim and believe on wording of Quran about the respect of our prophet?

As Muslim I have 100% believe on this quran wording , let see who win in this war of material lovers vs wording of Allah in quran about prophet respect.



Allah says, “Say: ‘If it be that your fathers, your sons, your brothers, your mates, or your kindred; the wealth that ye have gained; the commerce in which ye fear a decline: or the dwellings in which ye delight – are dearer to you than Allah, or His Messenger, or the striving in His cause;- then wait until Allah brings about His decision: and Allah guides not the rebellious.” (9:24)

This is an Explicit “Nass (definite proof)” in Quran that Allah and his Prophet (Peace be upon him) should be dearer to us than everything in the world i.e. our wealth, children, parents etc… Some people use this verse in regards to Jihad only but they forget that loving Prophet (Peace be upon him) is mentioned before that, hence even Jihad without the love of Allah and his Prophet (Peace be upon him) would “not be” Jihad in cause of Allah, rather it could lead one to hell fire instead.

 

[Tomcats]

Here are some brief economic stats:

https://twitter.com/x/status/1384370355389833217

https://twitter.com/x/status/1384370503239012354

 

[Imran Khan]

pakistanio ko thekaydaar bnny ka keun shok hai her cheeze main. kisi aur muslim mulk main to kuch nae hua

we are unique and special
we kill and hate people on the names of sects which were created here in subcontent

for example two major sects berlvi and deobandi are home made .on the name of two indian cities raebreli and deoband .

Raebareli - Wikipedia

en.wikipedia.org

Deoband - Wikipedia

en.wikipedia.org

now you move away for example Algeria Malaysia Somalia or Bosnia no one knows these sects there but they are mislims right ?

we are unique in our ways . they started green pagri and then they invented a logo which they claim is shoes of prophet . no one out of here recognize it but in pakistan you can be killed for these things . we have all colors of sects white black green

last pakistani blaspheme case was registered that nurses removed a sticker from a mug .

 

[Tomcats]

This caricature of the Prophet PBUH must STOP. Period.

The original poster says government will eventually take a u turn. If this is the case, the reason for such fringe extremist parties to exist and to keep up their violent politics is justified.

Making fun of the Prophet is an issue for each and every Muslim, practising or not. When we stop taking action on such issues, we give space to extremism in our society.

This issue must be taken up with EU and French government in no ambiguous terms.

Thank you for contributing nada to the thread which is about the economic impact...

I'll just leave this one comment for all those who want to get political though, out of the 30 or so Muslim countries and 1.8 Billions Muslims, only in Pakistan did we witness the killing of each other to 'strike back at France'. If the ambassador gets expelled we will be the only Muslim country doing so too, there's a reason why other Muslim countries havent entertained actions like these and they are just as Muslim as any of us. So keep that in mind..

 

[Imran Khan]

Thank you for contributing nada to the thread which is about the economic impact...

I'll just leave this one comment for all those who want to get political though, out of the 30 or so Muslim countries and 1.8 Billions Muslims, only in Pakistan did we witness the killing of each other to 'strike back at France'. If the ambassador gets expelled we will be the only Muslim country doing so too, there's a reason why other Muslim countries havent entertained actions like these and they are just as Muslim as any of us. So keep that in mind..

and then next year we will be knocking the door of other muslim countries for bailout too in fact its suit our masters we must be ignorant extremists so they can use us .lets see this example UAE sale alcohol clubs parties hotels gambling collect money and we proud muslims go beg that money every other year but we never let our alcohol company to export and earn for us its haram

 

[Sheikh Rauf]

Dude Pakistan govt has to run a country and not a religious school. If religion has to deside the foreign policy of the country then it has no future . I will give you one example ,Pakistan is so much dependent on china and if it starts responding as a muslim country and talks against the muslims being treated by CCP then the relationship is over.

well we decide to keep our future with out religion so without religion no future accepted.

pakistanio ko thekaydaar bnny ka keun shok hai her cheeze main. kisi aur muslim mulk main to kuch nae hua

bhai Pakistan apna kaam ker raha hai... aap apnay hissay ki awaz uthain baki koi jahanum mein jana chahay to shook say jaye.

 

[Sheikh Rauf]

and then next year we will be knocking the door of other muslim countries for bailout too in fact its suit our masters we must be ignorant extremists so they can use us .lets see this example UAE sale alcohol clubs parties hotels gambling collect money and we proud muslims go beg that money every other year but we never let our alcohol company to export and earn for us its haram

we have been doing this from long time asking money if next year we have to do why not whats unusual.
rather than selling our soul or compromising.
you have good point we also cant get out of riba (intrest) system which is run by bank but what effort we have done to avoid it..only thing we sud do is try. lets ask france to apologise cuz their statement hurt Pakistanies.

 

[RIP Pak LAW]

France has got you around your neck and you can't do much about it.

Good that Imran Khan in his last speech to the nation explained you the truth about economic reprecurssions. We should know where we stand in the world yet we like to talk big be it on defense matters or international issues.

 

[Imran Khan]

we have been doing this from long time asking money if next year we have to do why not whats unusual.
rather than selling our soul or compromising.
you have good point we also cant get out of riba (intrest) system which is run by bank but what effort we have done to avoid it..only thing we sud do is try. lets ask france to apologise cuz their statement hurt Pakistanies.

what about lets make pakistanis so strong that world hear us ? TLP and thier supporters pushing us to more deep in mess where we need more begging from france then now . lets say what if next time france do it how we will stop it ? we need to be stronger so no one can insult our religion . bhikari ki koi izzat nhi hoti or mullah khud to bhikari hai mulk ko bhi bana raha hai .

France has got you around your neck and you can't do much about it.

Good that Imran Khan in his last speech to the nation explained you the truth about economic reprecurssions. We should know where we stand in the world yet we like to talk big be it on defense matters or international issues.

TLP follow this man

pakistan debt resolving solution by their late great leader . now you can guess what is mind set of these guys

 

[Invicta]

I'm not at all implying that we wouldn't be affected, it would defintely have a significant economic impact if the worst was to happen, I just think the way out from that damage would be to find new markets.

The vast majority of our exports go to the USA, EU, China and Saudi/UAE. We need to look beyond these destinations. There are huge growing markets in the developing world which our businessmen overlook. We just seem to export to wherever we have an expat community or existing relationships.

To do that we'd have to start making things that consumers want to buy, rather than focusing on raw materials, agriculture, cotton - all the stuff we currently focus on.

IF they did that, it would be a silver lining to a dark cloud, but certainly not a fix. At the end of the day most of the money is in the western countries, they're the ones buying things.

Mate as hard as it is to admit - what is there beyond these destinations? Nothing, zilch.
They are the biggest consumers at least the more powerful ones. Developing nations make money by selling consumer products to developed nations. This only happens because cost of manufacture of some consumer goods in developed countries is too expensive.

Pakistan could trade with Africa but how many countries in Africa have the means to make up the 20% export downfall or even south America. Pakistan needs to develop its leverage, it has nothing it can hold the developed nations to ransom with.

Until that happens prepare to suffer. If the French ambassador is sent packing make no mistake but any progress made in FATF will be undone, this will have a ripple effect on pretty much everything else Pakistan is trying to do. Good thread good topic, unfortunately some very hard truths to process.

 

[313ghazi]

Mate as hard as it is to admit - what is there beyond these destinations? Nothing, zilch.
They are the biggest consumers at least the more powerful ones. Developing nations make money by selling consumer products to developed nations. This only happens because cost of manufacture of some consumer goods in developed countries is too expensive.

Pakistan could trade with Africa but how many countries in Africa have the means to make up the 20% export downfall or even south America. Pakistan needs to develop its leverage, it has nothing it can hold the developed nations to ransom with.

Until that happens prepare to suffer. If the French ambassador is sent packing make no mistake but any progress made in FATF will be undone, this will have a ripple effect on pretty much everything else Pakistan is trying to do. Good thread good topic, unfortunately some very hard truths to process.

Yeah, i don't think we can look at X country as an alternative, but it's something that's bugged me for a while. It makes total sense that we export to the richest markets in the world, but why do we ignore the smaller markets? It's because our businessmen are poor at what they do. Everyone imports stuff and mostly it's from China. We need to take a slice of that pie. Vietnam is doing it, Bangladesh is doing it, we need to get in on it too, but we need to develop brands that will work abroad. If we had diversity in what we export and to whom we export, we're in a much better place to absorb the impact of such an event.

If anything this thread shows just how bare bones our economic capabilities are.

In my mind to future proof the economy we need to look at providing branded services and goods and we need to target the developing markets. Also consider the purchasing power of our domestic market. We need bigger middle class to drive our own economy.

In the past you needed to have access to oil to be economically independent, i don't think that's the case anymore. Nobody is ever 100% able to function in isolation, but countries like Iran have a much better HDI than us and they've been under sanctions for 40 years.

 

[Invicta]

Yeah, i don't think we can look at X country as an alternative, but it's something that's bugged me for a while. It makes total sense that we export to the richest markets in the world, but why do we ignore the smaller markets? It's because our businessmen are poor at what they do. Everyone imports stuff and mostly it's from China. We need to take a slice of that pie. Vietnam is doing it, Bangladesh is doing it, we need to get in on it too, but we need to develop brands that will work abroad. If we had diversity in what we export and to whom we export, we're in a much better place to absorb the impact of such an event.

If anything this thread shows just how bare bones our economic capabilities are.

In my mind to future proof the economy we need to look at providing branded services and goods and we need to target the developing markets. Also consider the purchasing power of our domestic market. We need bigger middle class to drive our own economy.

In the past you needed to have access to oil to be economically independent, i don't think that's the case anymore. Nobody is ever 100% able to function in isolation, but countries like Iran have a much better HDI than us and they've been under sanctions for 40 years.

I think the issue is of economies of scale, smaller markets have smaller consumer presence your sale window is narrow, margins squeezed. A larger market will have larger consumer presence and sale window is sufficient for a business to make decent profit.

Vietnam and Bangladesh are not infested with cretins like Pakistan is - that is the only difference both of them also predominantly supply to the West, they are picking up China's slack. One thing you are spot on is the lack of Pakistani Brands that are globally known and also in terms of importation the number of brands Pakistan imports.

For example just take into consideration the Automobile Industry, we have a monopoly of Japanese brands that dominate the market, if the consumer in Pakistan had choice of European brans - say Renault, Peugeot or Citroen - you bet a fiver that France would bend over because you will effect their business.

I think Pakistan already has a good sized middle class if you take into account their wealth. I don't know a single family in Pakistan that doesn't own a car, some have two or three. However, they lack options and general choices that they would get if they were living in UK or any other country in the west for that matter.

Look at the motorcycle scene in Pakistan - the country got swamped with cheap Chinese bikes and next thing you know even people who didn't know how to ride a bicycle were buying motorbikes. Yes they opened and made affordable a means of transport for the majority but there are plenty of people in Pakistan who would splurge on Ducati's, Triumph's and MV's. Once the market is in full swing these industries would also become dependant on Pakistan.

I think if the current monopolies in certain sectors is broken it will enable Pakistan's current consumer base to rival those of some European countries, if the demand is there and business are allowed to compete Pakistan will be able to leverage other countries based on its consumer base rather than economy.

The situation is Iran is what Pakistan should take lesson from, Iran against all the odds has kept its literacy rate sky high which have a massive indirect effect on HDI, Pakistan needs to do the same.

I don't know what the score is now but in the 90's I was in Germany for a few years in University of Hohenheim working on agricultural technology, at a forum they showcased research papers from around the world, there were over 50 from India and Bangladesh, Pakistan was 0. Then I spent some time in Multan in 2000's and saw how university students paid a photocopy shop to sell them copied dissertations, I was appalled what future would a university graduate have if he is forging dissertations. Around Muzaffargarh I was introduced to a school that was apparently well known for prepping student to pass the military tests. I saw lines of students sitting on the floor memorizing whole essays - including the punctuations - the idea of education has been corrupted in Pakistan.

Before Pakistan even attempts to mimic Iran's HDI it needs to radically implement changes to it's own education and higher education systems.

 

[Dr. Strangelove]

EU is one of our biggest Export destination and our Debt holder. Debt rescheduling will be effected. French actually helped Pakistan earlier last year by rescheduling the 1.7 billion dollars that we had to pay to Paris club countries. Pakistan may face a balance of payment crisis again. We have a trade surplus with them we could say goodbye to it. EU has also given us GSP+ Trade Preference that could be lost. Dollar can fly again. Inflation will increase further. We could say our hopes of leaving FATF goodbye.

Ultimately it will all depend on how will french and EU react. Will they understand why Pakistani Government had to do it (I Personally don't think so). In the end the Entire world will know that to bring Pakistan to its knees all you need to do is just push Islamophobia in the west to publish a few images and ignorant fools in Pakistan will burn their own house.