Greece wishes it used the Pakistani rupee!

Published: July 20, 2012

For starters, if Greece were Pakistan, they would have been able to print as much money as they wanted.

Moody’s, one of the three biggest ratings agencies in the US, recently sent Pakistan’s credit rating one grade lower into ‘junk’ territory. That is the lowest rating ever bestowed on Pakistan’s sovereign debt. For a relative comparison, Moody’s ranks India’s government-issued debt six spots above Pakistan’s, while Bangladesh’s debt is three spots higher than ours.

However, I’d like to make a bow to the optimistic people in our country who insist that we have what it takes to be ‘self-sufficient’ and say that our credit rating is still above that of Greece’s. That’s right. The eurozone’s bane of existence was recently bestowed the lowest grade on the list after Moody’s declared that the country had committed a ‘selective default’ following its debt restructuring programme going into operation.

For Pakistan, the agency cited loans that it has to pay back to the IMF and its dwindling foreign exchange reserves as reasons for its decision. Our financial analysts appeared surprised by the timing of the downgrade, as it was expected some months earlier when our relations with the US were worse than they are right now.

Any hope that the government will come to its senses and tackle the economic problems head-on would be misguided. It was revealed this week that our fiscal deficit has widened to six per cent of GDP. However, our political elite seem to be affixed on scoring points against the judiciary. Instead of plugging loopholes in the tax system, the finance ministry is busy fudging its numbers and using wildly optimistic GDP growth estimates so that economic targets can be met on paper.

The Greeks might be looking towards Pakistan— minus the religious extremism — and wishing that they were us right now. For starters, they would have been able to print as much money as they wanted. The idea of a ‘State Bank of Greece’, instead of the European Central Bank (ECB) would surely appeal to them.

However, with Greece stuck in the eurozone, there is about as much chance that Germany will allow the ECB to go on a spending spree for Greece’s benefit as there is the chance that a PPP prime minister will write the letter to Swiss authorities to reopen corruption cases against the president.

Read more by Ali here.


Ali Mehdi

A sub-editor for the Karachi pages at The Express Tribune.

The views expressed by the writer and the reader comments do not necessarily reflect the views and policies of The Express Tribune.

  • Parvez

    Don’t know too much about the Greek economy, but for Pakistan its ‘been there, done that’.Recommend

  • Fahad

    @Parvez: Actually we haven’t been there…we have gone close, but not there…Pakistan’s always managed to get away with getting downgraded to JUNK…but this time…We have done it…hurray!!!Recommend

  • JB

    Another ‘glorious achievement’ for our incompetent govt.!Recommend

  • FU

    The day US stops aid to Pakistan and uses its might in IMF to deny fresh loans, believe me that day you will say Greece is far better. Recommend

  • Pakistani

    I guess we deserve these inept and corrupt leaders coz we elected them. So cheers to us as a nation!Recommend

  • Maria

    @Pakistani: We may deserve these inept and corrupt politicians but we didn’t deserve the inept and corrupt military dictators who caused more problems than any elected government. Europe is paying the price for the bad policies of its leaders and Greece and Spain may be going bankrupt but at least they have rich Germany to bail them out and pay off their debts. No one in Greece pays taxes. Pakistan has been unable to get anyone to pay off its debts since we have had incompetent dictators like Musharraf who just want to keep power. He not only gave away transit routes for nothing to NATO, he did not get any concessions for the hundreds of billions of dollars of damage done to the nation.Recommend

  • antanu g

    For all Indians, here is an eye-opener. Which European country looks to India for inspiration?Recommend

  • Asad

    Wait till 2014 when USA is out and no longer needs Pakistan’s supply routes it will declared a terrorist state. But hey what do we care we are still happy to be ruled by the likes of Gillani Junior.Recommend

  • Lahori

    Yes, yes, without the Islamic extremism, we would be flying high and a lot more countries would want to be like us. Though I must admit we are really good even at the extremism thing. We just need to take our smartness in jihadi stuff and turn it to a better pursuit.Recommend

  • BlackJack

    @antanu g:
    Dude – the article has even not been written by a Greek citizen, let alone the Greek govt. May help if you read the content instead of going by the title. And as regards Greece, even if they did not have your currency to save them the blushes and had just continued with the lowly drachma, the rest of the Euro zone may have been in better shape, although Greece would have defaulted long back. Pakistan is one of the world’s largest recipients of foreign aid which gives them a fig leaf to continue irresponsible military spending and regressive fiscal policies. Note: India’s fiscal deficit is also a mess but at least our economy is growing at 5.5 – 6% p.a, our foreign exchange reserves are in the region of USD 300 bn, and we are still the world’s third most preferred FDI destination as per the recent UNCTAD report.Recommend

  • Iron

    Pakistan is ruled by mindless people, they only know how to make there bags full of money from kick backs and corruption. One day Afghanistan’s economy would be better then PK. I hope we send all our politican to Mars on oneway ticket. Recommend

  • p r sharma

    Lower credit rating means the Foreign investor will keep themselves at a distance from Pakistan . And no boost in GDP growth. Recommend

  • Parvez

    @Fahad: Factually you are right. I stand corrected.Recommend

  • kumail

    The people of Greece choose to go with the Eurozone in a referendum. If they had separated and reintroduced the drachma then its would be highly overvalued. The economic situation in Greece is terrible and thats because of their extravagant spending during Athens olympics.
    Greeks would never wish to have a State Bank and please as it would lead to cost-push inflation. The people chose to go with the austerity measures in the recent elections there. Recommend

  • Muhammad

    What a pointless article. Waste of space.Recommend

  • abhi

    @antanu g
    I thought you were sympathatic to pakistan, now you are making sarcastic comments! strange!Recommend

  • Baba Ji

    Despite all odds and all cynicism apart, Pakistan has weathered the global economic downturns well … Recommend

  • Pakistani1414918

    Great article but misleading title and the article fails to justify the title. Greece is still a far more developed country than Pakistan is sadly with a much higher living standard. Recommend