Stories about Pakistan’s economy

Give PTI six months, they said – now we have Rs2.42 trillion added to our debt

A historic problem in Pakistan, one it has been facing for quite some time now, is the debt trap. Each successive government in Pakistan keeps borrowing for temporary fixes, which only helps in the short-term but has made us worse off in the long-run. However, even before it was elected to power, the incumbent government consistently maintained it would get Pakistan out of this trap once and for all (but only they knew how). Thus far, not only has the government been entirely unsuccessful in getting us out of this mess and bridging the gap between expenditures and revenue, it ...

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Why India may not be a big fan of Pakistan’s new visa policy

Prime Minister Imran Khan’s ‘Naya Pakistan’ just passed legislation loosening the country’s previously difficult visa procedure. This legislation allows most of the world’s nationalities to either receive a visa on arrival or electronically, which will not only boost tourism and facilitate business dealings, but also show the international community that Azad Kashmir is truly free and not ‘Pakistan-occupied’ as India falsely alleges. This is all part of Imran’s ‘Naya Pakistan’ vision of revolutionising his country’s domestic and foreign affairs. This legislation is expected to immensely boost Pakistan’s tourism industry and facilitate the clinching of international business deals along the China-Pakistan Economic Corridor (CPEC). The ...

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The unheard plight of subcontractors in Pakistan

You might have noticed how the security guard at your company’s gate isn’t directly employed by your organisation; there is a third-party agreement that ensures there is no liability of that security guard on your company. Try to find out how much he earns a month and compare it to how much your company is actually paying for him; I guarantee you will find a stark difference in both amounts. Till a few years ago, this situation was limited to support staff, including pantry boys, the sanitation department, security guards, and so on. However, things have changed over the ...

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Pakistan’s inclusion on the FATF watchlist is no mere symbolic gesture

After much anticipation, speculation and confusion, we now know that the Financial Action Task Force (FATF) has put Pakistan on a terrorism financing watchlist. Well, sort of. FATF decided to “grey list” Pakistan, but the designation won’t formally take effect until June – hence why FATF didn’t mention Pakistan in a report it issued last week. Admittedly, the FATF’s deliberations are opaque and its procedures byzantine. But this much is true – Pakistan is on its way to the watchlist. Pakistani financial journalist Khurram Husain, who understands FATF well, put it to me this way: FATF has passed a motion to grey list Pakistan. ...

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Of Pakistan’s strategic position and progressing economy

Pakistan’s geostrategic location is a major attraction for developed economies to invest in for lucrative returns. The country is strategically located in the crossroads of Asia with China as its neighbour in the north, India in the east, and Iran and Afghanistan in the west.  The country lies in a region which has great political, economic and military importance. Being in the same vicinity as two major powers, China and Russia, adds to its position. Similarly, Pakistan has an access to the six Muslim central Asian states through Afghanistan. These states are landlocked and Pakistan can provide a link between the Gulf States as well as African, European and Central Asian ...

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Perhaps India can take a few pages out of Pakistan’s poverty reduction playbook

I recently came across a blog titled ‘What’s Really Going on with income trends in India and Pakistan’.  The blog was written by a Pakistani economist working in the Washington office of the World Bank. I have known the author and have great respect for him as an economist and as a person.  However, it pains me to see that in this blog at least, excessive generalisations and selective analysis is presented to promote a political agenda. Nobody can deny the fact that for over a decade, India’s economy has been doing very well.  In comparison, Pakistan is having severe difficulties; partly due to ...

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Pakistanis, ditch the cash for plastic money

“Would you like to pay by card or cash?” I choose cash. So does the majority of Pakistan’s population. Despite carrying a credit card and two debit cards in my wallet, I still prefer to use cash for all my transactions. I have my reasons for doing so; however, I also feel my ideology regarding plastic money is a depiction of the general consumer mindset. Here is why: 1. I feel more secure with cash in hand. It gives me greater control over my spending and allows me to exercise frugality where needed. With a debit card, I have the ability to ‘swipe’ away my ...

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The Karachi stock market is not a casino, Pakistan – stop gambling!

“Becho, becho” (Sell, sell) “Lay maal”  (Take the stock) “Karachi stock market mein shadeed mandee (decline)” “Shares key karobaar mein hazaar point ki kami”  (A 1,000 point drop in shares) Such are the headlines across the media nowadays which happens to be the topic of discussion among many. Meanwhile, the broader Index, KSE 100, declined by an eye-popping 17.5% from 35,055 points to 28,927 points in less than two months. For many, this is another bad experience, but for some, it has turned out to be an exciting opportunity. Like any doctor who sees a sick patient, we must first assess the rational reasons behind the steep fall. Sometimes, the doctor correctly identifies ...

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Privatise this, privatise that – just make me rich!

I look around my house searching for items I can sell and make a quick buck. I come across some furniture that needs fresh coats of polish before I can even present it for sale. This requires too much effort! Why don’t I just sell that antique painting that has been hanging in the drawing room for years? This is effortless and is guaranteed to bring me a truck load of cash. As it is, I just have five hours to make money! If I think like this, then it should not be a surprise that our Privatisation Commission (PC) operates in ...

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Is the New Silk Road really an economic corridor for China and Pakistan?

While the world is busy tackling the ISIS and its look-alikes in the Middle East, China, on the other hand, has other plans to chase. One such plan is reviving the centuries old Silk Route, or the New Silk Road – a series of routes that were important in the past for cultural interactions and trade between the East and the West. As part of this revival, China recently announced working on a high speed train from Lanzhou to Urumqi, capital of the troubled Xinjiang province. It is also rumoured that the train may, in future, reach out to regional states including Kyrgyzstan, Tajikistan, Uzbekistan, Turkmenistan, Iran and Turkey, along with ...

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