US offers strong support to rebuild Pakistan’s economy

[Wood]

Alternative is to ban all imports except crucial items such as medicine and fuel. Use remittances to payback growing debt repayments instead of taking new external debt. Don't import more than export until external debt to exports / remittances is significantly reduced. Stop worrying about gdp growth, inflation, currency devaluation during this painful restructure of the economy

This will crash your economy and make you default anyway. The textile industry for example cannot produce at the same pace without cotton imports.

 

[Norwegian]

What about debt repayments that are coming due? What if the costs of borrowing more debt to cover past debt while interest accrues get too high? What if suitable lenders cannot be found, as seems to be happening with SA, china and even IMF?

Debt repayments must be paid with borrowed money as before. If there is no one lending money to this imported crooked govt then Pakistan will default and you will get your Sri Lanka wish getting fulfilled
@Wood

 

[Ssan]

What about debt repayments that are coming due? What if the costs of borrowing more debt to cover past debt while interest accrues get too high? What if suitable lenders cannot be found, as seems to be happening with SA, china and even IMF?

The calculus is very simple- you are doing deflections for no reason- the current primary CAD is no more than .5 -1 bn$ a month. This is what needs to be covered by reducing imports, find 6 bn$ to cut above and do it. This is less than 10% of your imports.

Ofc, this still leaves your debt problem. You need IMF to get revolving door to debt for this. IMF will unlock Saudi, UAE, China. To unlock IMF, you need to do away with subsidies, do this right away. No more talking/chit chat on the forum. Just do the necessary. We all know that this will cost politically- well so be it.

 

[Norwegian]

This will crash your economy and make you default anyway. The textile industry for example cannot produce at the same pace without cotton imports.

Pakistan can cover import bill through exports + remittances. It's for external debt repayments it needs help from IMF and others

 

[Ssan]

Pakistan can cover import bill through exports + remittances. It's for external debt repayments it needs help from IMF and others

Exactly, I don’t know why people are making this so complicated. Just do what needs to be done. Should have been done first day in govt. Remove subsidies and face the music.

 

[VCheng]

If there is no one lending money to this imported crooked govt then Pakistan will default

Hence what I have always said: default remains an option, however bad it may be. It just might be the only way out of the predicament.

 

[Norwegian]

Hence what I have always said: default remains an option, however bad it may be. It just might be the only way out of the predicament.

Pakistan will only default when there is no one left to lend it money for its growing external debt repayments bill
And no. Default doesn't help. It's only a start of the very long painful restructure of the economy

 

[VCheng]

To unlock IMF, you need to do away with subsidies, do this right away.

100% agreed. What PMIK did by announcing the increased subsidies was almost criminal. The continued inaction of PMSS in not stopping the subsidies immediately is criminal indeed.

Pakistan will only default when there is no one left to lend it money for its growing external debt repayments bill

Which brings us back to the topic of this thread. Does Pakistan want USA to help or not? It is a choice to be made by Pakistan, obviously.

 

[Wood]

Pakistan can cover import bill through exports + remittances. It's for external debt repayments it needs help from IMF and others

So now you want Pakistan to default on external debt payments? After all, if debts do not have to be paid then Pakistan can be merrily on its way!

 

[MultaniGuy]

Hours after Foreign Minister Bilawal Bhutto-Zardari arrived in New York on Tuesday for a series of meetings with US Secretary of State Antony Blinken, a State Department spokesperson assured Pakistan of strong US support for their efforts to rebuild the Pakistani economy.The United States “will continue to work bilaterally on ways to grow investment and trade opportunities to build a prosperous and stable Pakistan,” the spokesperson told Dawn in Washington.The United States also “welcomes the ongoing International Monetary Fund (IMF) deliberations with Pakistan,” the spokesperson added.Also, IMF sources in Washington confirmed that Pakistan and the IMF would start their review talks in Doha on Wednesday (today) to strike a staff-level agreement for the release of a $1 billion tranche under an Extended Fund Facility (EFF).The week-long review will be an opportunity for Pakistan to convince the IMF to revive a stalled $6bn package for stabilising its cash-starved economy.

US offers strong support to rebuild Pakistan’s economy

State Department confirms Blinken will meet Bilawal; FM says will take Pakistan’s message to UN.

www.dawn.com

It's like offering aid to Japan or Vietnam after bombing those countries to stone age...

Haha, thanks, but no thanks.

Better to work with China.

 

[Wood]

Pakistan will only default when there is no one left to lend it money for its growing external debt repayments bill
And no. Default doesn't help. It's only a start of the very long painful restructure of the economy

Why do you want to restructure economy if you don't want to borrow or pay back money to anyone? Your credit rating will be shot if you default. But that does not matter to a country which does not plan (or need) to borrow -- as you would like.

 

[VCheng]

It's only a start of the very long painful restructure of the economy

Rest assured that the adjustment will happen one way or another, as it must. The degree of pain will be quite high no matter what options are chosen.

 

[Ssan]

100% agreed. What PMIK did by announcing the increased subsidies was almost criminal. The continued inaction of PMSS in not stopping the subsidies immediately is criminal indeed

Unf agree with you here. The political economy of inflation and mehengai is the real achilles heal for Pakistan. We need to do away with it.

Nonetheless, PTI inherited much worse situation in 2018 when primary CAD was 2-3 bn$ and going in wrong direction. They did the necessary and paid the political price. Now PMLN has inherited an economy that is very close to 0 primary CAD. The political price is also a lot smaller. They have no excuse to not do the necessary. Don’t get to compare the two together.

Unf agree with you here. The political economy of inflation and mehengai is the real achilles heal for Pakistan. We need to do away with it.

Nonetheless, PTI inherited much worse situation in 2018 when primary CAD was 2-3 bn$ and going in wrong direction. They did the necessary and paid the political price. Now PMLN has inherited an economy that is very close to 0 primary CAD. The political price is also a lot smaller. They have no excuse to not do the necessary. Don’t get to compare the two together.

There is no serious restructuring here- that pain and price was already paid. You want proof, go luck at the exports graph.

 

[Norwegian]

Pakistan's total external debt until 2014 = 60 billion dollars
Pakistan's total external debt in 2022 = 130 billion dollars
A debt increase of 70 billion dollars in just 8 years

Now look at Pakistan's exports growth in the same time

Who is responsible? @Ssan

Why do you want to restructure economy if you don't want to borrow or pay back money to anyone? Your credit rating will be shot if you default. But that does not matter to a country which does not plan (or need) to borrow -- as you would like.

Rest assured that the adjustment will happen one way or another, as it must. The degree of pain will be quite high no matter what options are chosen.

 

[خره مينه لګته وي]

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Maryam Nawaz just re-twetted this Slavery just got intensified - they're not even hiding it anymore - wah Bhai wah