what would Happen to a Country if its Loan is Written off ?

[FaujHistorian]

O bhai he just wanted to know what would happen if a country's debt is zero.
Everybody knows that no one writes off someone's debt so simply.

Work hard is good but its of no use unless you are also making an effort in the right direction.

There are plenty of examples.

Debt forgiveness has been done but it doesn't help.

Countries get their debt forgiven, then few years later they are in the same $hite.

Debt should never be the issue

Increasing our Income should be.

 

[rubyjackass]

bhai

I think we are talking about the same thing.

We don't need population control.

I said population control is badly needed, in Pakistan especially since fertility rate is more than 3. When it reaches below 2, the measures should be softened.

Now I think you are joking about a complex financial instrument.

I am partly serious. The bonds are risky if you simply see it as an investor. But as a Pakistani, you would be helping the country. And once you admit you are willing to bet on your country, the return is not bad.

 

[FaujHistorian]

I said population control is badly needed, in Pakistan especially since fertility rate is more than 3. When it reaches below 2, the measures should be softened.


I am partly serious. The bonds are risky if you simply see it as an investor. But as a Pakistani, you would be helping the country.

North Indian Hindus Muslims all have very similar population growth rate.
similar or higher than Pakistan's

 

[rubyjackass]

North Indian Hindus Muslims all have very similar population growth rate.
similar or higher than Pakistan's

India is still continuing population control measures. The laggards are states like UP and Bihar where illiteracy is rampant and government messages don't reach effectively.

 

[FaujHistorian]

India is still continuing population control measures. The laggards are states like UP and Bihar where illiteracy is rampant and government messages don't reach effectively.

Not that simple.

 

[volatile]

Our budget comprises of around collection of over 2600 Billion Rs through tax (which is income ) among this around 950 + goes for armed forces ,another 200 for pensions .remaining 600-700 goes for debt financing now to sums that up its around (950+200+650) - Collection = 1800 - 2600 = 800 left which is not enough for development + day to day affairs .As we are budgeting around 3500 (correct me if i am wrong) so remaining 900 always is from borrowing .Coming to your question if we are debt free tomorrow we have readily available 600-700 Bil which is being used for debt financing so it can go all portion with same percentage.

 

[Faiez]

If you are a Pakistani American, then it is a good business opportunity. You take a million dollar loan in US(there interest rates are now around 1%), then buy Pakistani government issued dollar bonds with it. The bonds will give you 8.5% interest. That way you are helping Pakistan by giving it dollars. If you use the profit to finally invest in Pakistan(buying land or something), then even better for Pakistan.

You're not gonna get a loan at 1%........

But you're idea will still work. You'll be paying the difference in interest rates in the form of risk (of pakistan defaulting).

 

[Faiez]

I am partly serious. The bonds are risky if you simply see it as an investor. But as a Pakistani, you would be helping the country. And once you admit you are willing to bet on your country, the return is not bad.

No sir, the risk is still there. But a pakistani will be blind to that risk, that's all.

 

[black-hawk_101]

How much Loan is at present on Pakistan?

 

[rubyjackass]

Not that simple.

So you are saying population growth is not a problem for Pakistan?

No sir, the risk is still there. But a pakistani will be blind to that risk, that's all.

It is there. But if you care more about your country than your money, then it will help Pakistan's economy. That is better than an American hedge fund buying Pakistan's bonds and drawing 8.5% interest. The high interest will stay with a Pakistani. That's all I am saying.

 

[Lurch Adams]

USA's debt is at 14 Trillion and Japan's is also in trillions,but both are prosperous countries. Debt is a complicated matter i guess..

Those are figures for internal debt, which any country can write-off with minimum fallout. Especially the US because the dollar is the default reserve currency of the world. This is not the same as external debt, which is owed outside the country.

You should try asking that person, if he is under medical treatment for paranoia or not.


boss.. there is a limit up to which you can print. There is a limit to that. It's a good question actually.

Start with this link :

Why can’t a country print money and get rich?

China has been doing so for 30 years now....

 

[Faiez]

Those are figures for internal debt, which any country can write-off with minimum fallout. Especially the US because the dollar is the default reserve currency of the world. This is not the same as external debt, which is owed outside the country.

USA and Japan both have hard currencies, they can write-off both internal and external debts.

Emphasis being on "can". Other countries that don't have a hard currency simply cannot get rid of external debt unless they have a hard currency.

 

[mike2000 is back]

I am not that good at understanding these economic matters, So just wanted to know from guys here who understand these things.
So my question is what effect will it have on Pakistan economy if all of its debt is written off(Which i think is round about $90 billion)?

Borrow even more .

 

[FaujHistorian]

So you are saying population growth is not a problem for Pakistan?
.

population is only a problem if the country is not fully connected in global trade.

Otherwise 200 million people are an asset with a huge %age of young people to feed clothe and support the world population.

I hope you understand this.

It is not about killing little babies for so called "population control", it is about making them useful for the world by turning them into hardworking global citizens.

Peace

USA and Japan both have hard currencies, they can write-off both internal and external debts.

Emphasis being on "can". Other countries that don't have a hard currency simply cannot get rid of external debt unless they have a hard currency.

Many here do not understand the difference between soft currencies like Rupee or Renminbi.

So they end up comparing Pakistan or China with countries with hard currencies.

Dollar and Euro and pounds are the only currencies (rest of them are just ruddi-paper)
Countries who can print hard currencies are in a totally different league.

 

[Mike_Brando]

Around 65% of GDP, and decreasing every passing year.

Nah,i don't think that it's 65% of the present GDP because a few months back i read somewhere that the current external debt of India is around $406 billions where as our present GDP is around $2.3 trillions!!