Check out this chart - Foreign Reserves at the State Bank of Pakistan

[AsifAmeer]

This is what the Foreign reserve chart looks like according to the data released this morning.

Notice the drop and then JUMP in 2008? Thats when Pakistan went almost bankrupt and was bailed out by the IMF.
Notice the small rise in July of 2012? Thats when Pakistan received the $1.12 billion in CSF from US.

So at around $8.5 billion, State Bank was in crisis mode. Look at the level these days. Decide for yourself...

Folks, a status-Quo policy WILL NOT WORK. Demand this BoP policy be implemented.

 

[Corrupt]

I think when they report (TV channels and newspapers) that currently Pakistan has around 14 billion USD reserves they add up balance with commercial banks.. rite?

 

[AsifAmeer]

Thats right. But thats like counting your neighbour's salary too to get a loan.

I think when they report (TV channels and newspapers) that currently Pakistan has around 14 billion USD reserves they add up balance with commercial banks.. rite?

 

[Corrupt]

Thats right. But thats like counting your neighbour's salary too to get a loan.

... can SBP use REPO to control the reserves with commercial banks?

 

[AsifAmeer]

umm.. I dont know.. But I think they have done that before where Govt seized Foreign accounts and forced public to sell their dollar it lower than market rates.

... can SBP use REPO to control the reserves with commercial banks?

 

[shassan655]

I am sorry..my point might be a little off topic..But looking at our countries dismal economic standing and reserves. How can we expect any turnaround in the near future. Right now our tax collection and sales revenue collection is horrible below to any international standards. I would rather say mildly it needs a complete revamp. I do not see any current political office bearers have any plan to surgically fix this Taxation problem. In order to pay our Debt. payment we have to borrow money against IMF and World Bank.

Correct me if I am wrong but Imran Khan is also against borrowing money from IMF/World Bank. My point is if Imran wins and he puts his Economic pundit's on the realm, then it would take years not months to completely overhaul the taxation policies and recover money to pay the Debt. How can we survive during this period of rectifying this taxation policy without borrowing money from IMF/World bank for debt. repayment. Where would this money come from ???

 

[AsifAmeer]

Umm.. I say if theres an educated public, it would take 3 months to

• implement a completely new FISCAL/Taxation policy
• A new Balance of Payment policy
• a new Monetary Policy.

Then it would be upto the people of that country to steer the country according to their ability and priorities. For e.g. If people choose to work hard and save, they may see investment flourish. If they decide they want bigger german cars, they may bankrupt the country.

But ya.. I think it can be changed.

I am sorry..my point might be a little off topic..But looking at our countries dismal economic standing and reserves. How can we expect any turnaround in the near future. Right now our tax collection and sales revenue collection is horrible below to any international standards. I would rather say mildly it needs a complete revamp. I do not see any current political office bearers have any plan to surgically fix this Taxation problem. In order to pay our Debt. payment we have to borrow money against IMF and World Bank.

Correct me if I am wrong but Imran Khan is also against borrowing money from IMF/World Bank. My point is if Imran wins and he puts his Economic pundit's on the realm, then it would take years not months to completely overhaul the taxation policies and recover money to pay the Debt. How can we survive during this period of rectifying this taxation policy without borrowing money from IMF/World bank for debt. repayment. Where would this money come from ???

 

[VoteME]

Money will flow in only if the law, energy situation is fixed and dealt with. If Pakistan had only peace it would have been a good place for foreign investment. But I don't see it to be implemented any sooner.:( Ohh well will wait and see.

 

[gotti]

I am sorry..my point might be a little off topic..But looking at our countries dismal economic standing and reserves. How can we expect any turnaround in the near future. Right now our tax collection and sales revenue collection is horrible below to any international standards. I would rather say mildly it needs a complete revamp. I do not see any current political office bearers have any plan to surgically fix this Taxation problem. In order to pay our Debt. payment we have to borrow money against IMF and World Bank.

Correct me if I am wrong but Imran Khan is also against borrowing money from IMF/World Bank. My point is if Imran wins and he puts his Economic pundit's on the realm, then it would take years not months to completely overhaul the taxation policies and recover money to pay the Debt. How can we survive during this period of rectifying this taxation policy without borrowing money from IMF/World bank for debt. repayment. Where would this money come from ???

Foreign aid is the only logical alternate. IMHO

 

[shassan655]

Umm.. I say if theres an educated public, it would take 3 months to

• implement a completely new FISCAL/Taxation policy
• A new Balance of Payment policy
• a new Monetary Policy.

Then it would be upto the people of that country to steer the country according to their ability and priorities. For e.g. If people choose to work hard and save, they may see investment flourish. If they decide they want bigger german cars, they may bankrupt the country.

But ya.. I think it can be changed.

Well...Asif...My apologies but I do not agree with your logic. Reason being we are discussing Pakistan. We are not discussing developed countries. So your logic IF our population is all educated then it would take 3 months. I sincerely doubt anybody can wanda magic stick which can resolve our taxation overhaul policies in a very short time. Problem is currently our Govt. has not sincerely initiated to work towards the rectification of tax policies. If Imran becomes PM and his Economic team starts to work on it then I can confidently say that It is a step in the right direction but would take time to get implemented and see results. In the mean while we will have to borrow money from WB/IMF. So when politicians claim including Imran that we will stop borrowing money from IMF doesn't seem possible. ...Regards...

 

[only_truths]

I am sorry..my point might be a little off topic..But looking at our countries dismal economic standing and reserves. How can we expect any turnaround in the near future. Right now our tax collection and sales revenue collection is horrible below to any international standards. I would rather say mildly it needs a complete revamp. I do not see any current political office bearers have any plan to surgically fix this Taxation problem. In order to pay our Debt. payment we have to borrow money against IMF and World Bank.

Correct me if I am wrong but Imran Khan is also against borrowing money from IMF/World Bank. My point is if Imran wins and he puts his Economic pundit's on the realm, then it would take years not months to completely overhaul the taxation policies and recover money to pay the Debt. How can we survive during this period of rectifying this taxation policy without borrowing money from IMF/World bank for debt. repayment. Where would this money come from ???

There is nothing wrong in taking loans, but it depends how you use it? I read in 1970's India took huge loans but later used the money for development with subsequent liberalization started started in the 1980's but a vigorous turn towards economic reforms in 1990's lead to India in a different league.

Similarly, if Imran Khan follow the rule, he can be successful. Rectifying the taxation policy without outside funding will put the state in more difficult situation.

quote circular debt: "Circular debt is when, to give a three-person example, A owes B, who owes C, who owes A. As in Pakistan Circular Debt is a major issue in Energy Sector where it is at alarming heights. ( By Raheel Rao, Kasur)
Circular debt relates to subsidies which the government in Pakistan is providing to the electricity consumers. By not collecting the bills KESC does not have the funds too pay its oil supplier , which could be PSO which in turn does not have the funds to pay its supplier, National Refinery say and then National Refinery does not have the funds to pay for imported oil. A better name is incorporate debt,
Muntazar Bashir Ahmed FCA "

Read more: http://wiki.answers.com/Q/What_is_circular_debt#ixzz25kWI8ARQ

 

[AsifAmeer]

Thats why the solutions for Pakistan has to come from within. You see I do not understand the internal cultural dynamics of Pakistan. Whatever I suggest, is my view. Its not the ultimate truth.

When you have done your research and believe in your clear thinking, you shouldnt be apologetic but vocal and convincing. All the best.

Well...Asif...My apologies but I do not agree with your logic. Reason being we are discussing Pakistan. We are not discussing developed countries. So your logic IF our population is all educated then it would take 3 months. I sincerely doubt anybody can wanda magic stick which can resolve our taxation overhaul policies in a very short time. Problem is currently our Govt. has not sincerely initiated to work towards the rectification of tax policies. If Imran becomes PM and his Economic team starts to work on it then I can confidently say that It is a step in the right direction but would take time to get implemented and see results. In the mean while we will have to borrow money from WB/IMF. So when politicians claim including Imran that we will stop borrowing money from IMF doesn't seem possible. ...Regards...