Trade Deficit Crisis and Non-productive Expenditures

[FuturePAF]

The big news of huge investment deals have given us a false sense of our security. Pakistan maybe shrinking the trade deficit but is racing the clock with gradual policies, that will use up its foreign reserves before it can close the gap. The other major issue is non-productive spending, especially that in the form of subsidies. Some subsidies like the drip irrigation subsidy offered in Punjab is to increase crop yields (https://www.pakistantoday.com.pk/tag/subsidy/), while other subsidies like the metro bus subsidies was cut because it was subsidizing services people already used like transportation in the form of rickshaws and private buses. All Subsidies that are not economically productive should be reviewed, and retaining those that protecting the most vulnerable. Further more transparency on where local members of Parliament spend money in their areas will decrease money wasted. Also,as hard as it is to say with the current threat from across the border, Defense spending, especially new acquisitions should be delayed or reduced (not cancelled) for 2-3 years to save some money that could help close the trade gap and the interest payments that are stalling the nation from economic stability.

While I don't claim the following points as my own, I think the points made in the following video are very important and should be implemented. The most important two points are trade in local currencies and barter trade with countries like Iran; Oil for Food. Also the channel name should not deter us from facing the tough issues. I don't want to see USD $1 = PKR 200. Also I don't know the background of the person suggesting these points, but I believe his points have merit and should be implemented post haste. Also ignore the title, and please be open to the core message presented, our nation is at stake.

Back to the issue of the trade deficit. If Pakistan can get China to agree to trade in local currencies; Yuans and Rupees, then the trade imbalance will even out. We wont be able to buy in Yuans what we can't earn. We imported $11.48 Billion from China, while only exporting $1.74 Billion (per Wikipedia); or a trade deficit of US $9.74 billion or more than 1.36 Trillion Rupees. To cover that kind of gap, would be nearly 7000 rupees from every man, woman and child in Pakistan every year. If China allow Pakistan to export US $9-10 Billion more per year in Food Stuffs it will be a small amount for China, but will cut our trade deficit by a third to half. It would do more than loans and even on time grants. Chinese companies can benefit by helping to make our land more productive for the Chinese market and share the profits between the government of Pakistan, the farmers, and Chinese companies. The added food productivity can also be exported to countries like Iran. Via Barter trade, Pakistan can trade food for oil, especially because food is exempt from the sanctions.
(https://www.theguardian.com/world/2018/nov/02/iran-sanctions-us-european-humanitarian-supplies). From these profits in oil, Pakistan can pay back its Chinese loans as well. As Time goes by, Pakistan can move up the food processing value added chain and can export to the rest of the middle east and Africa's highly competitive food markets.

Enhancing our agriculture is a major part of Cpec that needs to be implemented quickly, pending terms and conditions that product the farmers and the environments, and the rights of all provinces to their fair share of the water.

Catching tax cheats needs to be another high priority.

Finally we should set out of university graduates to challenge Indian professionals working in places like Saudi Arabia and the UAE so our graduates are as well trained to undercut or out-compete them for jobs.

 

[ziaulislam]

The big news of huge investment deals have given us a false sense of our security. Pakistan maybe shrinking the trade deficit but is racing the clock with gradual policies, that will use up its foreign reserves before it can close the gap. The other major issue is non-productive spending, especially that in the form of subsidies. Some subsidies like the drip irrigation subsidy offered in Punjab is to increase crop yields (https://www.pakistantoday.com.pk/tag/subsidy/), while other subsidies like the metro bus subsidies was cut because it was subsidizing services people already used like transportation in the form of rickshaws and private buses. All Subsidies that are not economically productive should be reviewed, and retaining those that protecting the most vulnerable. Further more transparency on where local members of Parliament spend money in their areas will decrease money wasted. Also,as hard as it is to say with the current threat from across the border, Defense spending, especially new acquisitions should be delayed or reduced (not cancelled) for 2-3 years to save some money that could help close the trade gap and the interest payments that are stalling the nation from economic stability.

While I don't claim the following points as my own, I think the points made in the following video are very important and should be implemented. The most important two points are trade in local currencies and barter trade with countries like Iran; Oil for Food. Also the channel name should not deter us from facing the tough issues. I don't want to see USD $1 = PKR 200. Also I don't know the background of the person suggesting these points, but I believe his points have merit and should be implemented post haste. Also ignore the title, and please be open to the core message presented, our nation is at stake.

Back to the issue of the trade deficit. If Pakistan can get China to agree to trade in local currencies; Yuans and Rupees, then the trade imbalance will even out. We wont be able to buy in Yuans what we can't earn. We imported $11.48 Billion from China, while only exporting $1.74 Billion (per Wikipedia); or a trade deficit of US $9.74 billion or more than 1.36 Trillion Rupees. To cover that kind of gap, would be nearly 7000 rupees from every man, woman and child in Pakistan. If China allow Pakistan to export US $9-10 Billion more per year in Food Stuffs it will be a small amount for China, but will cut our trade deficit by a third to half. It would do more than loans and even on time grants. Chinese companies can benefit by helping to make our land more productive for the Chinese market and share the profits between the government of Pakistan, the farmers, and Chinese companies. The added food productivity can also be exported to countries like Iran. Via Barter trade, Pakistan can trade food for oil, especially because food is exempt from the sanctions.
(https://www.theguardian.com/world/2018/nov/02/iran-sanctions-us-european-humanitarian-supplies). From these profits in oil, Pakistan can pay back its Chinese loans as well.

Enhancing our agriculture is a major part of Cpec that needs to be implemented quickly, pending terms and conditions that product the farmers and the environments, and the rights of all provinces to their fair share of the water.

Catching tax cheats needs to be another high priority.

Finally we should set out of university graduates to challenge Indian professionals working in places like Saudi Arabia and the UAE so our graduates are as well trained to undercut or out-compete them for jobs.

Overall ..None sense

 

[FuturePAF]

Overall ..None sense

Trading in local currencies and barter trade doesn't seem like a bad way to quickly tackle the trade deficit. Especially if it can create a means of attracting Chinese agricultural companies to help quickly modernize Pakistan's agriculture sector for the Chinese market as well as exporting to other countries. Barter trade with Iran with this higher food productivity can also earn Pakistan valuable oil and gas imports, helping to keep our industries going. Faisalabad's factories were not producing yesterday from lack of fuel, per reports.

Cheaper fuel prices will make our textile industry more competitive, on top of the lower labor costs, and the increased productivity of our agricultural industry to grow crops like cotton at a lower price per ton. The investments in the motorways will allow all of our agricultural regions and textile factories to get to the ports quicker, and exports way more textiles then ever before.

Value added food and Value added Textiles need a boost to get there, and incentiving Chinese companies to invest big in our agricultural sector with guaranteed access to the Chinese market and the Iran sanctions exemption on food just waiting for cheaper food products. This will also set us up to supply the growing population in Africa, and the competitive markets in the middle east.

This will also solve the jobs crisis and the unemployed will be absorbed by the growing agricultural sector and textile sector, and the money will circulate. Growing efficiencies in recycling, as well as building housing for the massive young population on the backs of the agricultural sector and textile sector profits will allow the now richer Pakistani consumers to buy more Chinese products. Its a virtuous cycle. The Chinese need to help us along by 1. trading in our mutual currencies, 2. closing the trade gap, and 3. investing in our agricultural sector on mutually beneficial terms (for the Pakistani gov, Farmer, and Chinese companies). A stable economy could also allow Pakistan to get its credit rating raised and refinance its loans to lower the interest payments.

https://defence.pk/pdf/threads/trade-deficit-doubles-to-18-25b-in-fy18.572643/
https://defence.pk/pdf/threads/paki...reases-by-4-1-billion-rs-3-4-trillion.602647/

 

[ziaulislam]

Trading in local currencies and barter trade doesn't seem like a bad way to quickly tackle the trade deficit. Especially if it can create a means of attracting Chinese agricultural companies to help quickly modernize Pakistan's agriculture sector for the Chinese market as well as exporting to other countries. Barter trade with Iran with this higher food productivity can also earn Pakistan valuable oil and gas imports, helping to keep our industries going. Faisalabad's factories were not producing yesterday from lack of fuel, per reports.

Cheaper fuel prices will make our textile industry more competitive, on top of the lower labor costs, and the increased productivity of our agricultural industry to grow crops like cotton at a lower price per ton. The investments in the motorways will allow all of our agricultural regions and textile factories to get to the ports quicker, and exports way more textiles then ever before.

Value added food and Value added Textiles need a boost to get there, and incentiving Chinese companies to invest big in our agricultural sector with guaranteed access to the Chinese market and the Iran sanctions exemption on food just waiting for cheaper food products. This will also set us up to supply the growing population in Africa, and the competitive markets in the middle east.

This will also solve the jobs crisis and the unemployed will be absorbed by the growing agricultural sector and textile sector, and the money will circulate. Growing efficiencies in recycling, as well as building housing for the massive young population on the backs of the agricultural sector and textile sector profits will allow the now richer Pakistani consumers to buy more Chinese products. Its a virtuous cycle. The Chinese need to help us along by 1. trading in our mutual currencies, 2. closing the trade gap, and 3. investing in our agricultural sector on mutually beneficial terms (for the Pakistani gov, Farmer, and Chinese companies). A stable economy could also allow Pakistan to get its credit rating raised and refinance its loans to lower the interest payments.

https://defence.pk/pdf/threads/trade-deficit-doubles-to-18-25b-in-fy18.572643/
https://defence.pk/pdf/threads/paki...reases-by-4-1-billion-rs-3-4-trillion.602647/

The analysis is factual incorrect


E.g trade in bilateral local currencies will not affect the trade deficit current account deficit or foreign reserves apart from may be Pakistan able to do some currency swaps(essentially taking a loan in yaun which might be cheaper than taking a dollar loan)

So essentially its non sense

 

[nahtanbob]

Trading in local currencies and barter trade doesn't seem like a bad way to quickly tackle the trade deficit. Especially if it can create a means of attracting Chinese agricultural companies to help quickly modernize Pakistan's agriculture sector for the Chinese market as well as exporting to other countries. Barter trade with Iran with this higher food productivity can also earn Pakistan valuable oil and gas imports, helping to keep our industries going. Faisalabad's factories were not producing yesterday from lack of fuel, per reports.

Cheaper fuel prices will make our textile industry more competitive, on top of the lower labor costs, and the increased productivity of our agricultural industry to grow crops like cotton at a lower price per ton. The investments in the motorways will allow all of our agricultural regions and textile factories to get to the ports quicker, and exports way more textiles then ever before.

Value added food and Value added Textiles need a boost to get there, and incentiving Chinese companies to invest big in our agricultural sector with guaranteed access to the Chinese market and the Iran sanctions exemption on food just waiting for cheaper food products. This will also set us up to supply the growing population in Africa, and the competitive markets in the middle east.

This will also solve the jobs crisis and the unemployed will be absorbed by the growing agricultural sector and textile sector, and the money will circulate. Growing efficiencies in recycling, as well as building housing for the massive young population on the backs of the agricultural sector and textile sector profits will allow the now richer Pakistani consumers to buy more Chinese products. Its a virtuous cycle. The Chinese need to help us along by 1. trading in our mutual currencies, 2. closing the trade gap, and 3. investing in our agricultural sector on mutually beneficial terms (for the Pakistani gov, Farmer, and Chinese companies). A stable economy could also allow Pakistan to get its credit rating raised and refinance its loans to lower the interest payments.

https://defence.pk/pdf/threads/trade-deficit-doubles-to-18-25b-in-fy18.572643/
https://defence.pk/pdf/threads/paki...reases-by-4-1-billion-rs-3-4-trillion.602647/

barter trade works only if there is somewhat of a balance
when the trade balance is lopsided with respect to china what are the chinese supposed to do with pakistani rupees ?

 

[GeraltofRivia]

The big news of huge investment deals have given us a false sense of our security. Pakistan maybe shrinking the trade deficit but is racing the clock with gradual policies, that will use up its foreign reserves before it can close the gap. The other major issue is non-productive spending, especially that in the form of subsidies. Some subsidies like the drip irrigation subsidy offered in Punjab is to increase crop yields (https://www.pakistantoday.com.pk/tag/subsidy/), while other subsidies like the metro bus subsidies was cut because it was subsidizing services people already used like transportation in the form of rickshaws and private buses. All Subsidies that are not economically productive should be reviewed, and retaining those that protecting the most vulnerable. Further more transparency on where local members of Parliament spend money in their areas will decrease money wasted. Also,as hard as it is to say with the current threat from across the border, Defense spending, especially new acquisitions should be delayed or reduced (not cancelled) for 2-3 years to save some money that could help close the trade gap and the interest payments that are stalling the nation from economic stability.

While I don't claim the following points as my own, I think the points made in the following video are very important and should be implemented. The most important two points are trade in local currencies and barter trade with countries like Iran; Oil for Food. Also the channel name should not deter us from facing the tough issues. I don't want to see USD $1 = PKR 200. Also I don't know the background of the person suggesting these points, but I believe his points have merit and should be implemented post haste. Also ignore the title, and please be open to the core message presented, our nation is at stake.

Back to the issue of the trade deficit. If Pakistan can get China to agree to trade in local currencies; Yuans and Rupees, then the trade imbalance will even out. We wont be able to buy in Yuans what we can't earn. We imported $11.48 Billion from China, while only exporting $1.74 Billion (per Wikipedia); or a trade deficit of US $9.74 billion or more than 1.36 Trillion Rupees. To cover that kind of gap, would be nearly 7000 rupees from every man, woman and child in Pakistan every year. If China allow Pakistan to export US $9-10 Billion more per year in Food Stuffs it will be a small amount for China, but will cut our trade deficit by a third to half. It would do more than loans and even on time grants. Chinese companies can benefit by helping to make our land more productive for the Chinese market and share the profits between the government of Pakistan, the farmers, and Chinese companies. The added food productivity can also be exported to countries like Iran. Via Barter trade, Pakistan can trade food for oil, especially because food is exempt from the sanctions.
(https://www.theguardian.com/world/2018/nov/02/iran-sanctions-us-european-humanitarian-supplies). From these profits in oil, Pakistan can pay back its Chinese loans as well. As Time goes by, Pakistan can move up the food processing value added chain and can export to the rest of the middle east and Africa's highly competitive food markets.

Enhancing our agriculture is a major part of Cpec that needs to be implemented quickly, pending terms and conditions that product the farmers and the environments, and the rights of all provinces to their fair share of the water.

Catching tax cheats needs to be another high priority.

Finally we should set out of university graduates to challenge Indian professionals working in places like Saudi Arabia and the UAE so our graduates are as well trained to undercut or out-compete them for jobs.

Like you’re pointed out, there is a huge potential to boost the export from Pakistan to China as a solution to reduce the external imbalances, which is shown in Pakistan’s growing current account deficit. I do feel there is a case for providing Pakistan preferential access to Chinese market particularly agriculture products, something better than the best FTA term we had with other countries.

However we need to recognize that policy assistance like preferential access can only provide a short term boost. As far as I know, Pakistan government also has put a number of administrative measures in place to reduce import and promote exports and they are all short term measures e.g. high duty on import, cash margin requirements, and export support package.However these measures don’t address the fundamental weaknesses in Pakistani industries in form of lack of competitiveness. The investment coming as part of CPEC or from other partners like KSA will provide a long term benefits by upgrading and strengthing the Pakistan industry.

Another thing to note is that the current account deficit is not entirely negative as it means there is a strong domestic demand that are for goods and services. It is partially driven by a accommodating monetary policy ie low interest rate, with the view of boosting economical activities. The serial elevations in benchmark rate in 2018 should suppress the development.

Trading with Yuan or Rupee doesn’t solve the current account balance issues as long as we use different currencies in the domestic markets. It is still important because it can help us mitigate the volatility with USD that has been impacting us adversely.

 

[FuturePAF]

Like you’re pointed out, there is a huge potential to boost the export from Pakistan to China as a solution to reduce the external imbalances, which is shown in Pakistan’s growing current account deficit. I do feel there is a case for providing Pakistan preferential access to Chinese market particularly agriculture products, something better than the best FTA term we had with other countries.

However we need to recognize that policy assistance like preferential access can only provide a short term boost. As far as I know, Pakistan government also has put a number of administrative measures in place to reduce import and promote exports and they are all short term measures e.g. high duty on import, cash margin requirements, and export support package.However these measures don’t address the fundamental weaknesses in Pakistani industries in form of lack of competitiveness. The investment coming as part of CPEC or from other partners like KSA will provide a long term benefits by upgrading and strengthing the Pakistan industry.

Another thing to note is that the current account deficit is not entirely negative as it means there is a strong domestic demand that are for goods and services. It is partially driven by a accommodating monetary policy ie low interest rate, with the view of boosting economical activities.

Trading with Yuan or Rupee doesn’t solve the current account balance issues as long as we use different currencies in the domestic markets. It is still important because it can help us mitigate the volatility with USD that has been impacting us adversely.

If China gives Pakistani agricultural products preferential access to the Chinese market, and incentives its companies to invest in the Pakistani agricultural market to bring it up to a level where production is competitive in terms of quality and yield, then it would solve a lot of problems for them as well as us. Our government on its part can carry out land reforms and earmark development funds for specific modernization programs such as subsidized drip irrigation equipment to farmers. I see you point that at best, the local currency trade "peg" would only protect from currency volatility, and would not really work in boosting exports.

The analysis is factual incorrect


E.g trade in bilateral local currencies will not affect the trade deficit current account deficit or foreign reserves apart from may be Pakistan able to do some currency swaps(essentially taking a loan in yaun which might be cheaper than taking a dollar loan)

So essentially its non sense

Thanks for pushing back on the argument. would you agree the key failure is the un-competitiveness of our agricultural and manufacturing industries? and if so what can be done to boost their competitiveness to boost exports?

 

[Yaseen1]

If China gives Pakistani agricultural products preferential access to the Chinese market, and incentives its companies to invest in the Pakistani agricultural market to bring it up to a level where production is competitive in terms of quality and yield, then it would solve a lot of problems for them as well as us. Our government on its part can carry out land reforms and earmark development funds for specific modernization programs such as subsidized drip irrigation equipment to farmers. I see you point that at best, the local currency trade "peg" would only protect from currency volatility, and would not really work in boosting exports.



Thanks for pushing back on the argument. would you agree the key failure is the un-competitiveness of our agricultural and manufacturing industries? and if so what can be done to boost their competitiveness to boost exports?

Barter and trade in local currencies is strongly opposed here as it is against interests of bankers and those doing currency business but it is overall good for us as a nation.

 

[FuturePAF]

barter trade works only if there is somewhat of a balance
when the trade balance is lopsided with respect to china what are the chinese supposed to do with pakistani rupees ?

The hope was to get the Chinese to open a preferential food import deal and get Chinese companies to invest there to close the trade gap. It would be a model to rapidly modernize agricultural production and help countries like Pakistan find ways to pay back Chinese loans and close the trade gaps as much as possible.

Modernizing the agricultural industry was suppose to be a part of CPEC, but it doesn't seem to be getting the priority it should considering the prominence of agriculture in our economy. I want to see the government focus on our strengths as a potential major agricultural (value added and not just raw materials) exporting nations with our 45 million acre of arable land that could grow to 70 million acres with water management infrastructure. a more productive agriculture industry would also lower the costs of producing cotton and allow textile production to be more competitive as well, drawing in FDI to rebuild that industry as well, now that we have build all these power plants to close the electricity short fall.

These two industries would absorb a lot of the unemployed people in Pakistan, and can give young people hope. This hope is essential for global stability. International companies can be a big player in this regard; agricultural modernization is not limited to local and Chinese companies, Foreign FDI from other countries would be welcome.

 

[GeraltofRivia]

The hope was to get the Chinese to open a preferential food import deal and get Chinese companies to invest there to close the trade gap. It would be a model to rapidly modernize agricultural production and help countries like Pakistan find ways to pay back Chinese loans and close the trade gaps as much as possible.

Modernizing the agricultural industry was suppose to be a part of CPEC, but it doesn't seem to be getting the priority it should considering the prominence of agriculture in our economy. I want to see the government focus on our strengths as a potential major agricultural (value added and not just raw materials) exporting nations with our 45 million acre of arable land that could grow to 70 million acres with water management infrastructure. a more productive agriculture industry would also lower the costs of producing cotton and allow textile production to be more competitive as well, drawing in FDI to rebuild that industry as well, now that we have build all these power plants to close the electricity short fall.

These two industries would absorb a lot of the unemployed people in Pakistan, and can give young people hope. This hope is essential for global stability. International companies can be a big player in this regard; agricultural modernization is not limited to local and Chinese companies, Foreign FDI from other countries would be welcome.

IMHO providing preferential access to Pakistani will certainly help but the benefit may not be so significant in the medium term. Pakistan will need to see a major change in its current portfolio, which are dominated by cotton, rice, wheat and sugar. These produces are not cost competitive and are not in demand in Chinese market (as there are plenty of them). Small size farm in Pakistan means it will never become competitive in the low value, high volume crop market.

Instead what is in great demand in China are high value products like horticulture, livestock, meat and poultry. The production of ‘international’ fruits i.e. banana, apple, orange, grape, strawberry and cherry etc. I know Pakistan has been exporting Mango and Kinnow and mango but the quantity is quite limited.

I image tge difficultly for most of the farmers to switch to the high value crop is low income from the existing crop. Financing would also be too expensive at 10+% interest rate. Also growing high value crop required new skill and expertise that may be lacking. There are a lot of ground work to be done in this area. As you mentioned, there should be more government involvement, not necessarily financial but more in terms of upskilling the farming community and facilitating the upgrade. I think there is an workstream in CPEC but I could be wrong.

 

[nahtanbob]

The hope was to get the Chinese to open a preferential food import deal and get Chinese companies to invest there to close the trade gap. It would be a model to rapidly modernize agricultural production and help countries like Pakistan find ways to pay back Chinese loans and close the trade gaps as much as possible.

Modernizing the agricultural industry was suppose to be a part of CPEC, but it doesn't seem to be getting the priority it should considering the prominence of agriculture in our economy. I want to see the government focus on our strengths as a potential major agricultural (value added and not just raw materials) exporting nations with our 45 million acre of arable land that could grow to 70 million acres with water management infrastructure. a more productive agriculture industry would also lower the costs of producing cotton and allow textile production to be more competitive as well, drawing in FDI to rebuild that industry as well, now that we have build all these power plants to close the electricity short fall.

These two industries would absorb a lot of the unemployed people in Pakistan, and can give young people hope. This hope is essential for global stability. International companies can be a big player in this regard; agricultural modernization is not limited to local and Chinese companies, Foreign FDI from other countries would be welcome.

if you get a PTA with China who cares about barter ??

Barter and trade in local currencies is strongly opposed here as it is against interests of bankers and those doing currency business but it is overall good for us as a nation.

the soviet bloc had barter trade. it did not work out well
someone gets the short end always

 

[ziaulislam]

If China gives Pakistani agricultural products preferential access to the Chinese market, and incentives its companies to invest in the Pakistani agricultural market to bring it up to a level where production is competitive in terms of quality and yield, then it would solve a lot of problems for them as well as us. Our government on its part can carry out land reforms and earmark development funds for specific modernization programs such as subsidized drip irrigation equipment to farmers. I see you point that at best, the local currency trade "peg" would only protect from currency volatility, and would not really work in boosting exports.



Thanks for pushing back on the argument. would you agree the key failure is the un-competitiveness of our agricultural and manufacturing industries? and if so what can be done to boost their competitiveness to boost exports?

Why is our industry uncompetitive
1. We need to understand that our labour/manpower is unskilled . so we can only develop SMEs or textiles ...skilled labour tajes decades of training and R&D Built upon revenues (textile)
2. Textiles is cut throat competition
3. Where countries offer free land for industrial complex (i mean duh? Do you thunk we dont have land..literally all Baluchistan coast is empty) but in Pakistan no province wants to do that. A land whose value is less than a rupee(barren land) is being given to industry on millions. This is how china developed new cities cheap land all the coastal power houses were nacent cities like gawadar today ecah of these cities have bigger GDP than combined india
4. Lower taxes. Our tax rate is 30% bank tax is 40% this is two times of developing countries and 50% higher than developed countries (rectified to somw degree now)
5. Liquidity ..govt borrows all the money at cheaper artificial interest rate....>>>>ishaq dar mentality ...> result..lowest liquidity /saving just 10% of GDP(people don't put money in banks) and lack of any mlney for private sector(rectified govt borrowing down And interest increased but will takw years to work)
6۔ ease of doing businesses ..it takes omni group to get utilities and minting zardari for even a gas connection !
7. High cost of power...world devleops power via coal but Pakistan is environmental friendly thats we burn furnace oil which probably as dirty as coal
9. Many other things...!!

Agriculture ..lack of R&D countirs have tripled their production since 1990 . well u gyessed it rigjr Pakistan has seen no change
Reasons
1. Lack if lending because ishaq dar dried up liquididy to fund metros
2. Lack of fertilizer ..getting opium is much eaier than fertilizer these days..rectified gas being guven to fertilizer sector
Gas imports ..well we made a gas terminal but forget to laydown a 20km gas pipeline to connect the terminal ..result..we are paying capacity charges without usibg the terminal..one of the most weirdest things i have seen..?!!!
3. New seed. E.g in sindh new rice seed vas led to double rice production despite all issue in three years
4. New R&D for disease since mushaiddullah took over the faislaabad university is growing vegetables for professors rather than doing cotton research

The facts is problems are so huge that even if IK fixes them in 3-4 years which is difficult as people in IK party are resisting chnage(e.g propoganda against Asad umar) zardari/sharif/marium/bilawal will come by to screw things again.

Mindset change is needed which is next to impossible ..people of Pakistan loves democracy ..there is no concept of capitalism and work.
capitalism was buried when bhutto came in 1970s and since than we are just helping fuedal lords

 

[The Accountant]

barter trade works only if there is somewhat of a balance
when the trade balance is lopsided with respect to china what are the chinese supposed to do with pakistani rupees ?

THis is one way of balancing the trade ... It will try to balance the trade between the countries in long run

 

[maithil]

Fiscal health deteriorating sharply, half-year data shows

Pakistan’s fiscal deficit crossed 2.7 per cent of gross domestic product (GDP) in the first half of this fiscal year – the highest in eight years – despite government’s claims to have put the house in order with greater fiscal discipline and austerity.

Almost all the major fiscal indicators – both on expenditure and revenue side – showed deterioration in first half of the current fiscal year when compared to same period of last year.

According to fiscal operations data released by the Ministry of Finance on Wednesday, the fiscal deficit in absolute terms amounted to Rs1.029 trillion in first half (July-December 2018) that was almost 30pc higher than same period of last year – the pre-election spending session of PML-N.

For its part, the PTI government slashed development spending and net lending by a massive 36pc to rein in runaway spending in mark up payments and defence, posting an increase of 32pc and 22pc respectively.

The country has never posted such a higher fiscal deficit since 2010-11 when the gap between the government revenues and expenditure stood at 2.9pc of GDP or Rs490 billion in absolute terms. Nevertheless, the country’s fiscal deficit had stood 2.6pc in 2012-13 and 2.5pc twice in 2011-12 and 2016-17.

While defence expenditure went up, spending on the Public Sector Development Programme was reduced by 37pc

The Ministry of Finance reported that defence expenditure and mark up payments also posted an upward journey as share of the size of the national economy (GDP), leaving little space for the government to spend on improvements in the living standards of the people in the form of infrastructure development and social sector spending.

Data showed the total mark up payments amounted to Rs877bn in first six months of the current fiscal year compared to Rs751bn of same period of last year, showing an increase of Rs126bn or 32pc. As percentage of GDP, mark up consumed 2.3pc compared to 2.1pc of GDP the same period last year.

The defence expenditure in first six months of current year stood at Rs479.6bn compared to Rs393bn of same period last year, showing a jump of 22pc or Rs87bn. Its share in GDP also inched up to 1.2pc this year against 1.1pc of GDP same period last year.

Unfortunately this led to a cut back in the Public Sector Development Programme (PSDP). The PSDP spending in first half of this year plummeted to Rs328bn compared to Rs520bn of same period last year, showing a reduction of 37pc or about Rs192bn. This is also evident from the fact that overall development spending and net lending dropped to a paltry 1pc of GDP compared to 1.6pc of GDP of last year.

The total expenditure in first half of CFY amounted to Rs3.36tr against Rs3.18tr of comparable period last year, showing an increase of 5.5pc. The trade off in spending between non-productive and productive sectors of economy helped contain FY19 total expenditure at 8.7pc of GDP compared to 8.9pc in FY18.

The current expenditure, however, remained out of control. For example, current expenditure in FY19 stood at Rs2.98tr compared to Rs2.55tr of FY18, showing an increase of Rs44bn or about 18pc. The current expenditure stood at 7.8pc of GDP during CFY, significantly higher than 7.1pc of GDP last year.

On the other hand, total revenue collection dropped to just 6.1pc of GDP in first half of current year compared to 6.6pc of GDP last fiscal. Tax revenue was also down to 5.4pc of GDP this year compared to 5.6pc of last year. The performance of non-tax revenue was no exception that stood at 0.6pc of GDP in first half of CFY compared to 1pc of GDP same period last year.

The revenue performance in absolute terms was no better either. For example, total revenue collection stood at Rs2.33tr in first half of current year compared to Rs2.38tr of last year, showing a reduction of Rs58bn or 2.43pc. This is perhaps a rare phenomenon that revenue collection has ever been lower than previous year.

Tax revenue amounted to Rs2.08tr in first half of current year compared to Rs2.03tr, showing a nominal increase of Rs55bn or 2.71pc. Normally, the tax revenue should increase every year at the cumulative rate of inflation and economic growth rate. That means the tax revenue should have automatically increased by at least 11pc (over 4pc GDP plus over 7pc inflation).

Direct taxes also dropped to 1.8pc of GDP during CFY against 1.9pc of same time last year. Taxes on goods and properties also declined to 2.1pc of GDP compared to 2.2pc. The share of sales tax also dropped to 1.8pc of GDP from 1.9pc last year.

Non-tax revenue also dropped to Rs245bn in first six months compared to Rs358bn of same period last year, down by a massive Rs113bn or 32pc. Both the federal and provincial revenues contributed to poor tax revenue performance. Provincial revenue slightly increased in absolute terms to Rs188bn this year against Rs176bn of last year while federal revenue inched up to Rs1.89tr compared to Rs1.85tr of same period last year.


https://www.dawn.com/news/1465070

 

[nahtanbob]

THis is one way of balancing the trade ... It will try to balance the trade between the countries in long run

you should study barter arrangements employed by the Soviet bloc. a chinese company has no use for pakistani rupees. they need to convert into chinese currency to pay their employees and suppliers. the only entity that can hoard Pakistani currency is Chinese government. Beyond a few billion they cannot hoard pakistani currency. it is of no value. Chinese have zero concern or interest about balancing trade with anyone. the real issue is what can Pakistan produce that is of interest to China.