Re: Taste of new government on economical front
** It rose to very high amounting to Rs64.1 in July 2001. The economic indicators showed some visible improvement since the year 2001-02 and it continued to be so, which helped the authorities to turn around the creeping devaluation and the rupee has stabilised in the range of (Rs) 59-60 per dollar till 2006 and May 2007 (Rs60),**
'
Re: Taste of new government on economical front
**Shamraz Khan: **Brother, the story of rupee you wrote is same as what I wrote above in short.
Now coming to devaluation because of trade deficit or deficit in balance of payment, as far as Pakistan is concerned there is no such excuse or need. Pakistan dollar debt has not increased during last 8 years (well, increased by around 3 billion dollars in last 8 years) as Pakistan kept paying interest regularly on 38 billion dollars debt Musharraf government inherited in 1999. On top of that, after financing all trade deficits, Pakistan also accumulated around 16 billion dollar reserves. So, Pakistan has no problem in balance of payment hence no need to devalue rupee as devaluing currency increases Pakistan total debt plus also would also hinder in industrial development.
Further, Pakistan exports mostly primary goods and that has no competition problem neither Pakistan has any problem in exporting such goods due to lack of market, so export would not increase just because of rupee devaluation. Pakistan needs to increase production to increase export and for that Pakistan need production related imports that with increasing value of dollar would become more expensive for Pakistani producers, and hence they would not be able to increase production.
In the end, it can be easily seen that devalued Pakistani currency would only be disadvantageous to Pakistan than beneficial.
Re: Taste of new government on economical front
To export our cotton based products, we need lot of imported machinery and spares.
Re: Taste of new government on economical front
Hanibal: you are wrong that there are investors who have no choice. These days, investors have all choices where to invest. All this theory is also BS that people in West are moving their money to Pakistan because of war on terror or anything like that. Fact is that, other than illegally obtained money (like drug money), all money are safe anywhere in the world and find its destination where it can get best return. Even drug money up to a quantity is safe in West as you should know that most Western drug dealers are Europeans who keep their money in Europe. Many Pakistani corrupt politicians and bureaucrats even now have billions of dollars invested in West.
As for foreign investment, that may go back with interest or profit, but in the end it is investment that creates wealth and that wealth is always more than what investors get. Well, if no wealth is created then investors get nothing or can even lose their investment, but if wealth is created then investors get a portion of created wealth, no more.
In short, if 10 billion dollars come to Pakistan as foreign direct investment (FDI) then 1 billion dollar may go back as profit every year, but for that, those 10 billion dollars must be producing profit of 2 to 3 billion dollars, giving FDI recipient country at least 1 to 2 billion dollars a year in taxes plus thousands of jobs getting created in the country because of 10 billion dollars investment further giving billions of dollars worth of income within the country to workers whose taxes are extra.
Re: Taste of new government on economical front
Hanibal: you are wrong that there are investors who have no choice. These days, investors have all choices where to invest. All this theory is also BS that people in West are moving their money to Pakistan because of war on terror or anything like that. Fact is that, other than illegally obtained money (like drug money), all money are safe anywhere in the world and find its destination where it can get best return. Even drug money up to a quantity is safe in West as you should know that most Western drug dealers are Europeans who keep their money in Europe. Many Pakistani corrupt politicians and bureaucrats even now have billions of dollars invested in West.
As for foreign investment, that may go back with interest or profit, but in the end it is investment that creates wealth and that wealth is always more than what investors get. Well, if no wealth is created then investors get nothing or can even lose their investment, but if wealth is created then investors get a portion of created wealth, no more.
In short, if 10 billion dollars come to Pakistan as foreign direct investment (FDI) then 1 billion dollar may go back as profit every year, but for that, those 10 billion dollars must be producing profit of 2 to 3 billion dollars, giving FDI recipient country at least 1 to 2 billion dollars a year in taxes plus thousands of jobs getting created in the country because of 10 billion dollars investment further giving billions of dollars worth of income within the country to workers whose taxes are extra.
Dear Brother,
Have u ever been in the investment world? have u ever met with the people ( 1st type of investors) if yes, then still i must say u have no idea what are the things they go through or how they are living around, yes few of them are settled by majority is looking for alternative, Pakistani Passport is one of those passports which fall into the category of NOC from CENTRAL Agencies in numerous countries, Now let me know when i said Western Countries? i Said Gulf Countries and i did mentioned thed sector of investments but i guess u haven't red it or missed it ( but u have to disagree) and created a assumption that i said this...
brother its no use having discussion with propoganda people, as they never believe in the facts, they only believe what their masters tell them...
Prime example is this post... I think u r the one who use to favour musharaf and allies alot for the economic development and now u r the one who is admiting that yes there was wrong doingss.....
for change, it would be good if u can think as a Pakistani & for Pakistan... instead of blindly following some one...
Re: Taste of new government on economical front
I am blaming the devaluation on present government not because of their economic policy but because of investors lack of confidence on present government as Pakistani currency is getting devalued not because of Pakistan economical reason (as that would have shown in stock market too) but because of no confidence on present government and thus resulting in flight of capital from Pakistan.
So the actual blame is on investors and nothing to do with govt.
Re: Taste of new government on economical front
Brother, if you had read my first post carefully, you would not have asked. Here is what I wrote in my first post:
Though I did not blamed present government in my first post, they are actually responsible of accelerated devaluation after 8th April 2008, as TV briefing of Daar full of lies did showed the world their intention of corruption, their incapacity of understanding economical figures, their character of deception and lies, their incompetency regarding managing economy, and sign of their past behaviours returning. Hence due to such perception, accelerated devaluation started after that briefing of lies: Result:
Rupee, that was slowly devaluing, devalued Rs 0.70 between 1st of February 2008 to 8th April 2008 ( 68 days), abruptly devalued by Rs 2.45 after Daar briefing within 17 days from 8th April 2008 to 25th April 2008. Thus, a person has to blame Daar for this abrupt devaluation as this habitual liar intentionally lied without realising the consequence of his lies.
**For instance dollar exchange rate during those dates: **From dawn:
**Forex update:**KARACHI, Feb 01: The Pakistani Rupee was traded at Rs 62.7 to the US Dollar in the open market. (Bureau Report) (Updated @ 16:00 PST) http://www.dawn.com/2008/02/01/welcome.htm ]
**Forex update:**KARACHI, April 08: The Pakistani Rupee was traded at Rs 63.5 to the US Dollar in the open market. (Bureau Report) (Updated @ 14:15 PST) http://www.dawn.com/2008/04/08/welcome.htm ]
**Forex update:**KARACHI, April 25: The Pakistani Rupee was traded at Rs 65.95 to the US Dollar in the open market. (Bureau Report) (Updated @ 16:02 PST) http://www.dawn.com/2008/04/25/welcome.htm ]
**Rupee devaluing already started from late October as investors realised that PML(Q) might be voted out of power in general election and due to thuggish perception of present government leadership, but devaluation was slow. Between Feb 01 to April 08 (67 days), Pakistani rupee devaluated by Rs 0.80. **
Then Daar briefing full of lies came on 9th April and abrupt devaluation started as thugs of present government confirmed the perception that was already there and showed that they have not changed. By April 25 (at the end of last Friday trading), rupee devalued by Rs 2.45, from 63.50 to Rs 65.95 per dollar, within 17 days of Daar lies to the media. So, even though all this devaluation is due to perception of present government thugs, this abrupt devaluation after 8th April is direct result of Daar lies.
Re: Taste of new government on economical front
The way you titled the thread made it seem like, anyway lets continue.
Today’s max US$ (TT/OD) rate is 64.4, so should we say its a boost of Rs 1.55 or 2.3% within 3 days? 
Re: Taste of new government on economical front
The way you titled the thread made it seem like, anyway lets continue.
Today's max US$ (TT/OD) rate is 64.4, so should we say its a boost of Rs 1.55 or 2.3% within 3 days? :)
Brother, why is it difficult to understand that when we compare something, we compare banana with banana, not banana with cucumber.
Anyhow: Dollar is appreciating and Rupee is continuously going down the drain. Today, at one time, dollar was selling at Rs 57.30 in open market. It seems that thugs like NS, Shabaz, Daar, Ehsan, Zardari, Naek ... etc well, all the mega crooks from PML(N) and PPP in government have already started stealing money from Pakistan and transferring them abroad. That is the reason Pakistan reserve has also gone down from around 17 billion dollars to 13 billion dollars. These crooks are either not available to comment or to fool public are saying that it is due to trade deficit and previous government, but obviously previous government is not responsible of their incompetence, as trade deficit was there since last 4 years still dollar was constant at Rs 60 - Rs 61 since last 4 years and reserve was increasing throughout.
Maybe this is the destiny of Pakistan and Pakistani poor that is to be slave of crooks like NS, Ishaq Daar, Ehsan, Zardari, their future King Bilawal ... throughout their life. It took 8 years to come out of bankrupt economy and it seems that these crooks would take it back to Pakistan being bankrupt economy begging for survival here and there. Anyhow, here is value of dollars today (at one time today it was Rs 67.30).
Forex update: KARACHI, May 06: The Pakistani Rupee was traded at Rs 67 to the US Dollar in the open market. (Bureau Report) (Updated @ 14:14 PST)
** Now even stock exchange has started going down** and in last 15 days, stock market has lost more than 1000 points. For instance, on the morning of 21-4-2008, stock market was 15676.34 ... it lost 21.55 points on 21-4-08. Since that date to today, KSE is going down almost every day. Today, it is 14408.84 . That means, KSE lost 1267.50 during last 15 days. This 1267.5 reduction in KSE also means that market capitalisation of KSE got reduced from around Rs 4800 billion rupees to today less than 4400 billion rupees, a loss of 400 billion rupees.
Now let see what some Jahil journalist would say, because in past these Jahil journalists (even people like Dr Masood of GEO) was saying that since stock market lost money, government official, most likely SA must have made that much money. Now these idiots should tell the public that 400 billion rupees must be stolen from Stock Market by thug Ishaq Daar. Now we should start talking about bringing Daar to justice as he caused this stock market crash and must have made those 400 billion. [It is funny, but that is how crook Pakistani politicians and Jahil Pakistani journalists twist facts about KSE collapses and give wrong information to Jahil public, who unfortunately believe these crooks in politics and media too :)]
Karachi Stocks down 21.55 points: KARACHI, April 21: At close of trading, the KSE-100 index was at 15654.79, down 21.55 points. (Bureau Report) (Updated @ 14:17 PST)
**
Karachi Stocks down 264.29 points:** KARACHI, May 06: At close of trading, the KSE-100 index was at 14408.84 , down 264.29 points. (Bureau Report) (Updated @ 14:14 PST)
Re: Taste of new government on economical front
Musharraf came to power at the end of 1999 and his government introduced ‘State Bank of Pakistan site’ in 2000 for public and thus since then anyone could have checked Pakistan economical situation. Putting state bank site for public was part of transparency that Musharraf government started. When PML(Q) government came, they kept all transparency steps Musharraf military government has taken.
It is very unfortunate that once thug governments of NS and Zardari came to power, it seems transparency has gone out of window, even though one should have expected their civilian government would be more transparent than military government (a wishful thinking).
Now, it is really hateful of PPP and NS political government that since last few of weeks, State bank site is inaccessible. I thought that government may have taken the site down temporary but it seems that these crooks have started their old crook and corrupt practices and thus are not putting the site back so that people could not know the truth of their corruption and mismanagement.
Site was: www.sbp.gov.pk
Re: Taste of new government on economical front
Are you sure it was “gov.pk” and not “org.pk”? Follow the link and let us know if this site is not State Bank of Pakistan:
I hope it was not the case of ‘blinded by hate’.
Re: Taste of new government on economical front
Few days ago when US stock markets were going down Yen and Euro were going up. 1US$ was equal to 97 Yen or 0.62x Euro, with stock market going back up in last few days 1US$ is equal to 105 Yen or 0.649 Euro. I haven't checked the relationship of KSE with price of Rs vs Dollar. Any clues there?
Re: Taste of new government on economical front
Well, you are right and for me, believe me, if I made mistake than it is nothing to do with being ‘blinded by hate’, but possible amnesia, that is all
Actually, the site was down few weeks ago. Anyhow, when I tried to go on that site yesterday, I could not. Maybe reason is that I used gov.pk as extension and not org.pk, so my mistake. Thanks for correcting me.
Re: Taste of new government on economical front
Few days ago when US stock markets were going down Yen and Euro were going up. 1US$ was equal to 97 Yen or 0.62x Euro, with stock market going back up in last few days 1US$ is equal to 105 Yen or 0.649 Euro. I haven't checked the relationship of KSE with price of Rs vs Dollar. Any clues there?
I do not think that generally devaluation of currency and crash in stock market have direct link with each other (but in certain circumstances there is link). How much and in what way currency value and stock market would react with reference to each other depends on type of economy, factors affecting stock market, and reason for currency depreciation/appreciation.
In ideal, rich and robust economy, currency keeps appreciating and at the same time stock market keeps going up. [Japanese economy during 70s is good example].
In robust but poor economy that wants high growth, currency should stay stable and stock market keeps going up at reasonable pace. [Pakistani economy during last 7 to 8 years is good example].
In badly managed economy, currency keeps depreciating and stock market stays constant or rises due to high inflation [Pakistani economy during early 90s]
In deteriorating (banana) economy, currency keeps depreciating and stock market goes down too [Pakistani economy during late 90s]
Anyhow, all depends on governance of a country and how country uses the resources. Effects can be seen not after studying short term performance but over year or two.
Occasionally, anticipation of governance after change of government (due to past performances and impression of new government) in countries with immature economy can show signs in stock market and currency market. If impression is too bad, as with present new government of PPP and PML(N) in Pakistan, then flight of capital starts. In such situation we see currency devaluation as first capital flight comes from liquid capital, then if new government could not gain any confidence of investors within short period, we can start seeing crash in stock market too, as people would start taking out capital from stock market to move capital abroad.
[Well, actually lies of crook thug Ishaq Daar few weeks ago regarding state of Pakistan economy also helped in starting flight of capital]
Flight of Capital is worse thing for any country, as Capital flies out of country very quickly but returns very slowly and only if government shows good governance and investors start thinking that their Capital would give them good return and is safe in the country.
There is misconception that capital coming to country is bad as it could leave too with profit. Fact is that most FDI (Foreign Direct Investment) are active Capital that creates job, progress, development, investment, and further Capital in host country. If 100 dollars come to Pakistan, it can create around 70 to 80 dollars over the investment each year but investors only takes 8 to 10 dollars, whereas remaining dollars stay in host economy (Pakistan). This 60 to 70 dollars that stay in Pakistan goes to workers as wages and taxes to the government.
For instance, if a company invest 1 billion dollars and do not take anything out of Pakistan for 10 years, then after 10 years they can take out probably 2 billion dollars (including their initial investment). But that 1 billion dollars investment during those 10 years might pay 10s of billion dollars in wages to local workers plus several billion dollars in taxes to government. Further advantage of FDI is that, those 10s of billion dollars that is paid to workers plus several billion dollars in taxes to government, further cycle in economy creating further billions of dollars.
Well, if that initial 1 billion dollars was locally generated then that is good as that means 2 billion dollars would not go back after 10 years to where it came from. But in poor country, even that 1 billion dollar is difficult to find. Plus, more the capital invested, more the country develops and more quickly country get richer.
Now, if 1 billion dollars fly out of Pakistan then these dollars would still earn the investors their return from their new destination. As for Pakistan, the cost of that 1 billion dollar flight could be 10s of billion dollars worth of wealth over several years along with devaluation of rupee.
Fortunately, Pakistani rupee did not depreciated over last 7 and half years (dollar was Rs 63 in Sept 2000) ... rather rupee appreciated ... and further Musharraf government did not increased dollar debt over last 8 years (it was around 38 billion dollars in 1999 and today it is around 42 billion dollars), as Pakistan government kept paying interest on dollar debt left by Nawaz in 1999 without taking further loan to pay those interest (that was around 4 billion dollars interest every year), hence Pakistan debt position became good and rupee kept becoming strong. Nevertheless, since rupee devalued by Rs 7 since last government left, devalued by Rs 6 during last couple of weeks, Pakistan total debts increased by Rs 254 billion only due to this devaluation.
This devaluation means not only increase in debt, it would increase prices in country too, plus would increase cost of oil and all energy Pakistan imports (Pakistan imported around 10 billion dollars worth of oil last year) plus increase in value of dollar means reduced dollar GDP, resulting in reduced dollar Per capita income.
Re: Taste of new government on economical front
I just hope that this rot stops. It is costing a lot to Pakistani economy as well as many individuals who trusted Pakistan with their money and did not moved their investment out of Pakistan once corrupt thugs came to power and incompetent crook like Ishaq Daar became Finance Minister.
Karachi stock index was 15676.34 on morning of 21st April 2008. Today KSE-100 index ended at 14388.52. Since then, in 13 trading days (18 days to date), stock market has lost 1287.82 points (that reduction on its own is more than KSE-100 index when Nawaz was deposed).
**Karachi Stocks down 66.77 points: **KARACHI, May 08: At close of trading, the KSE-100 index was at 14388.52, down 66.77 points. (Bureau Report) (Updated @ 14:17 PST)
Rupee was stable at around Rs 60.00 during previous government (from peak of Rs 63.00 in August/September 2000, rupee kept appreciating and in the end it became stable between Rs 60.00 to Rs 61.00, but now rupee is touching Rs 68.00 to a dollar within. We should know that with every Rs.1.00 appreciation of dollar Pakistani National debt increases by 42 billion rupees. For instance, since last government has gone, just because of rupee depreciation Pakistan National debt has increased by around Rs 330 billion (Rs 2000 on each of 165 million Pakistani) and that does not add what extra debt government took.
**Forex update: **KARACHI, May 08: The Pakistani Rupee was traded at Rs 67.8 to the US Dollar in the open market. (Bureau Report) (Updated @ 14:17 PST)
I do not know what to make out of it, as it is very depressing to see that just because some wanted crooks of PML(N) and PPP back in power, just because of their presence in government, country has started becoming poorer (stock market capitalisation is going down) on one hand and getting deeper in debt on other.
Re: Taste of new government on economical front
Let the Rs float freely...it will stablize itself to your and mine surprise...rest is all artificial...future shocks...
PS: State Bank's recent restrictions on imp/exp of dollar is utterly wrong...
Re: Taste of new government on economical front
Saleem what happened to great unprecedented growth in the last 8 years? Wake up and smell the defaf!
Re: Taste of new government on economical front
Pakistani economy was robust during last 7 to 8 years and it is still robust. Stock market that was worth around 4 billion dollars when Musharraf came to power is still worth around 65 billion dollars (after so much crash in stock market and devaluation of rupee).
Rupee was devaluing at compound rate of 10 percent a year through out from 1988 to 1999, and it devalued from Rs 17 to a dollar in 1988 to Rs 54 to a dollar in 1999 (when Musharraf took over). If Musharraf had not taken over and corrupt political government were still in power than most likely rupee would have kept devaluing at compound rate of 10 percent a year and that means today a dollar would have been worth over Rs 120. When this government came to power, dollar was Rs 62.00 and that also so high because flight of capital already started in anticipation of their coming, before election.
Pakistan debt was around 300 billion rupee and 13 billion dollars in 1988 (when Zia died). Corrupt government of NS and BB increased this debt to 1500 billion rupee and 38 billion dollars in their 11 years to 1999. This was the situation when GDP was around $62 billion, or debt to GDP ratio was over 100 percent.
During their corrupt period, rupee debt was increasing at compound rate of around 16 percent a year and dollar debt was increasing at compound rate of over 10 percent a year. If crooks had stayed in power than debt would have been 7500 billion rupee plus 87 billion dollars (that is different matter that before debt would have increased that much, Pakistan would have gone completely bankrupt).
At the end of June 2007, Pakistan debt was around Rs 2300 billion rupee plus $40 billion dollars. With GDP of over $146 billion, debt to GDP ratio was around 53 percent.
Federal Tax collection was 308 billion rupee in 1999. Pakistan federal tax collection for year 2006-07 was around 850 billion rupee (or around 3 times what it was in 1998-99).
On top of this comparatively low debt, foreign exchange reserve that was less than 1 billion dollars in 1999 was over 15 billion dollars when crooks came back again.
So, no one other than liar like Daar or those who know nothing about economy could say that present economical situation is bad.
But present problem is not economy, problem is investors’ and business communities’ trust, respect and confidence on present corrupt and crook team of politician that got into government after election. These thugs are known for their mismanagement and creating of anarchy in the country. They have very bad reputation regarding their competency, nepotism and corruption. **Their promises that they could not keep, their bickering over Judges’ issues, their using politics for personal revenge and trying to victimise others, putting at stake everything for personal ego, non-compromising attitude, all is reminding people of their past behaviour and scaring people that these crooks would start their corruption again, as it seems they have not changed iota bit even after getting so much kicks (especially Nawaz and his team of liars and crooks).**
Seeing all this, investors have started moving their wealth out of Pakistan causing accelerated devaluation of rupee (now it seems that people have also started selling shares to move money abroad, causing stock market crash), and that might eventually going to grind the economy and once these crook politicians would start their mega corruption, economy could start deteriorating as happened in 1990s. I am praying that it does not happen, as I am hoping that with Musharraf still President, he would not let these crooks start their mega corruption again, but that does not mean that one can have full confidence. I hope that these crooks start behaving like grown up responsible politicians and start working for development and well being of country leaving their selfish attitudes aside. If they would not change themselves, than I am afraid that they would harm the country irreparably, and that would be loss to everyone.
Re: Taste of new government on economical front
Let us see when Musharraf pulloff the NRO...
PS: Mega corruption is less likely possible because the ISI is watching closely this time...
It is really shocking how Pakistan economical indicators are melting down and situation worsening every day. I stopped observing economical figures praying that something good would happen, just like when a kid sees bad happening he puts his hands on his eyes and start praying that when he would take off his hands, he would find things changed for good, but it seems that there is no bottom for falling Pakistani economical indicators. After having such a good run over last 8 years from end of 1999 to end of 2007, stock market, dollar reserves, as well as rupee value is having a free fall. Fall until end of February was slow as it was in anticipation of crooks coming back to power, but when crooks really came back to power and nightmare became reality, this fall accelerated. If this would continue then things to come could be very bad for Pakistan.
Some economical ignorant have started blaming past government of Shaukat Aziz, but his government was there for years and if it was they then we would have not seen stable rupee, rising stock market and rising reserves year after year until well into last days of previous government. If it was their fault then we would have seen the evidence during their time, but fact is that, it is not economy but perception that is causing flight of capital and because of that Pakistan economy is getting jitters and this jitter will make the economy suffer as well, bringing huge price hike and all development works to halt.