Saudi help

[indiapakistanfriendship]

100 percent agreed with Chitah, let market forces dictate the economy. Otherwise artificial price fixing with disaster sooner or later.

Haider , for us developing nations who do not have strategic foothold over oil assets in ME as the west does, letting the market forces decide the price of oil can spell disaster. It brings in speculators(commodity traders) who trade oil as a commodity run riot, in the process artificially inflating the price of oil. Also letting market forces decide the price of oil results on non subsidised oil being expensive than subsidised oil . This will set of a chain reaction, both direct and indirect. Direct: Increase in the price of essential commodities, food prices (which use large scale transportation to maintain supply chain), industries dependent on logistics and supply chain for operations will be affected, public transportation will be near doomed as they usually run on losses etc. Indirect; Panic sets among population resulting in reduced spending and diversion of spending towards newly increased prices which otherwise would have been diverted to additional spendings which often revitalises the economy, Less spending results in less investors etc.

I am not trying to project a doosday scenario here, but what I am trying to convey is that it is not prudent nor is it in the interest of developing nations to let market prices decide the price of oil. It will take a long time before we can move from subsidies to free market, for that our economies need to mature.

Cheers

 

[indiapakistanfriendship]

Exactly, its a win-win situation for both countries.
We're belessed with arable land water, millions of acres of barren land can be coverted into arabale land with investement from Arab countries and employ thousands of Pakistani farmers.

Neo , in the long term this will creae all sorts of problem. Those arable land you are mentioning are land that will be needed to expand food production in the future for your country. Subjecting them to intensive modern agriculture practises will slowly erode the quality of the soil before that can be exploited by you in the right time. Add to that water which will be diverted resulting in acute shortage of land. Those lands that are cultivated are propotionally based on availability of water resources at this point on graph. Now suddenly upsetting the balance will create chaos in the supply(water, soil quality) demand (increased and intensive farming techniques) equation which will prove disatrous in the long run for Pakistan.

Cheers

 

[HAIDER]

Indiapakistanfriendship i agree certain extent, Well in Indian case its different. Living example is how they bent down Iranian on IPI case for pricing. That benefit alot to Pakistan being part of agreement. But driving forces depend upon govt sincerity.

 

[dabong1]

Haider , for us developing nations who do not have strategic foothold over oil assets in ME as the west does, letting the market forces decide the price of oil can spell disaster. It brings in speculators(commodity traders) who trade oil as a commodity run riot, in the process artificially inflating the price of oil. Also letting market forces decide the price of oil results on non subsidised oil being expensive than subsidised oil . This will set of a chain reaction, both direct and indirect. Direct: Increase in the price of essential commodities, food prices (which use large scale transportation to maintain supply chain), industries dependent on logistics and supply chain for operations will be affected, public transportation will be near doomed as they usually run on losses etc. Indirect; Panic sets among population resulting in reduced spending and diversion of spending towards newly increased prices which otherwise would have been diverted to additional spendings which often revitalises the economy, Less spending results in less investors etc.

I am not trying to project a doosday scenario here, but what I am trying to convey is that it is not prudent nor is it in the interest of developing nations to let market prices decide the price of oil. It will take a long time before we can move from subsidies to free market, for that our economies need to mature.
Neo , in the long term this will creae all sorts of problem. Those arable land you are mentioning are land that will be needed to expand food production in the future for your country. Subjecting them to intensive modern agriculture practises will slowly erode the quality of the soil before that can be exploited by you in the right time. Add to that water which will be diverted resulting in acute shortage of land. Those lands that are cultivated are propotionally based on availability of water resources at this point on graph. Now suddenly upsetting the balance will create chaos in the supply(water, soil quality) demand (increased and intensive farming techniques) equation which will prove disatrous in the long run for Pakistan.


Cheers

I totally agree bro with every point you made.

 

[HAIDER]

Todays news Zardari has successful talks with Saudies and next month Saudi minister of trade and minister OF AGRICULTURE is coming. Message is loud and clear. Now we have to feed Saudies and Afghans too. Nothing is free.

 

[amna]

where is this land that Pak wants to give away? is it army land?

 

[khanz]

don't be too grateful for the saudis they're only doing this for their own benefit not coz they wanna help a poor fellow muslim country. Pakistan needs to keep an eye on them and contain their influence upon the country.

 

[niaz]

Strange posts. People are questioning a good will gesture in reply to Pakistan's request.

Energy requirements grow at nearly half the GDP growth. Therefore if there is no oil, no energy and thus no growth, the economy will actually shrink if there is a shortage. Thus we must have energy to survive. IPI gas pipeline will take years to build and it is not free either. The pricing is in terms of oil equivalent meaning, at the same price as the international market. Similarly coal will take time to develop; energy is needed now not two years from now.

The reason for load shedding is that there is less electricity available for dams due to low water level and demand for electricity has increased due to growth in the last 8 years with little additional generation capacity added.

Many industries and specially Govt enterprises such as Railways owe WAPDA huge amount of money ( about Rs 40-billion) WAPDA is unable to pay to oil companies, oil companies are unable to pay to oil refineries, these in turn are unable to pay for the crude import. Add this to the electric theft and 'Kundas' and you have got the answer for Wapda's huge loss. But this always been the case with Wapda.

KSA is today awash with money. With export of crude oil alone, KSA expects to earns nearly $300-billion in 2008. She can afford to defer payments of $4-billion a year for two years. No doubt oil is not free but it is cheap money. Cheapest credit available to Pakistan would still be at about 4% per year meaning $160-million per year saving in interest alone! Additionally, not paying out nearly $8-billion over a two year period, would go a long way towards improving FE reserves.

Hon Compatriots let us not look the gift horse in the mouth and accept with grace that KSA is doing Pakistan a big favour.