Aalsi, unlike most of the other countries I don't see a major economic problem for Pakistan and future I think is quite good. Thanks God Zardari has put a person like Shaukat Tareen to manage finance and has not trusted any of his thug friends. Mr. Tareen is a professional and a very capable man.
Some of the things going well for Pakistan are:
1) The price of crude oil has come down considerably. Thus our trade deficit is likely to be around 8/9 billion dollars this year.
2) Flight of capital has come down significantly because of two reasons; a) Property slump in Dubai... b) Crack down on Kalia who were running parallel banking and facilitating this flight of capital. I believe Zardari government has done very well in this regard and we should give them their due credit.
3) In all likelyhood the inflation will come down significantly as the main reason for infaltion was onetime 30% devaluation which happened on extra ordinary pressure on reserves which mainly occured due to trade defecit (due to high oil prices) and flight of capital (due to property boon in Dubai).
4) If the inflation comes down the rate of interest will also come down very soon giving a boost to our manufacturing sector.
5) Our financial system remains very strong and our banking sector is still robust due to good work by regulators such as SSCP and State Bank of Pakistan unlike most of the other countries in the world.
6) You have to consider we have a very big resource available which is remittances from our overseas workforce. Around 10 billion is expected through legal banking channels while still around 10 billion dollars will come through these exchange companies as a lot of our overseas workers are not legal or educated enough or simply come from very far flung areas and do not use formal banking channels. Previously a lot of this resource was being used to finance the flight of capital or our trade defecit due to high oil prices. Now we are going to see a significant amount will go in to our foreign exchange reserves.
7) Pakistan can expect a major increase in foreign inflow of aid from donor country who realise a financially strong Pakistan makes the world a safer and a better place.
We just need an end to this political buk buk and concentrate on our economy and infrastructure. I hope Zardari will display some vision in this regard and specially distance himself from the likes of Sulman Taseer who are creating this political mess for him.
So all those people who want who have investable surpluses, now is the time to invest in Pakistan when the valuations are still very interesting. Next 5/10 years can be a time of economic boom in Pakistan, so don't miss out on this golden opportunity.
yazdi bhaijan. All very good points, including the one about subsidy in reply 5. The subsidy really should be scrapped. Additionally, the authorities need to really come down hard on electricity 'chori'. I read somewhere (maybe on this forum?) that the loss of electricity revenue could be as much as 40-50%. ?
I believe the export figures would have been better if it had not been for the burning and destructions of many businesses after BB's assasination. Many exporters could not fulfil their order books, and the buyers took their
business elswhere, possibly never to return. However, if political differences can be put aside, and the government is allowed to govern, then the political stability will really improve the business sector. However, there is the old
chestnut about war against extremism and terrorism which Pakistan is embroiled in. This too is having an affect on investment and Pakistan getting more orders. :(