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‘Politics’ has economy in a tailspin: Atif Mian

There is a video of Orya Maqbool Jan where he says that i suggested to Imran khan to expel Atif Mian and then Allah will shower his mercy on him and Pakistan. 4 years later, i think this is for everyone to see what has happened.
 
I think if credit should be given to Imran Khan for bringing high caliber economist like Atif Mian, then IK should also be blamed for booting him out.
 
I think if credit should be given to Imran Khan for bringing high caliber economist like Atif Mian, then IK should also be blamed for booting him out.
IK didn't "boot him out". He just couldn't handle the pressure. Would you rather he sink his govt and shoot himself in the foot for wanting to bring in Atif Mian? Would it have been better if he had not brought him on board in the first place?

Could he have made a better stand for atif mian is debatable. Anything else is a cheap shot. There's plenty of legitimate reasons for criticism of IK, wanting to fix Pakistan is not of them.
 
,.,,
International markets have been shaken by the recent bank failures in the United States, Switzerland, and Lebanon. The economic situation in Pakistan is also uncertain, which raises concerns about the stability of its banking system.

However, the answer to whether we should be worried about our banking system is not a straightforward one – it’s both yes and no.

To start with, it is important to acknowledge that there are certain structural problems with Pakistani banks that have played a part in the difficulties experienced by the banking industry.

One of the structural issues with Pakistani banks is their high concentration risk. This is due to the fact that a few large banks hold a significant percentage of assets in the banking system.

This poses a concentration risk as the failure of one or more of these banks could have a severe impact on the entire financial system.

The second structural issue is the high rate of non-performing loans (NPLs). This is a significant problem as it means that a large proportion of loans given out by banks are not being repaid, resulting in a liquidity crisis in the banking sector. Furthermore, many of these NPLs are questionable and may appear to have been used to benefit certain individuals through collusion.

It is imperative to increase transparency in the banking system by making financial reports more accessible to the public and by encouraging whistle-blowers to come forward with information about corruption and fraud, particularly in relation to loan write-offs.

The third challenge is the lack of transparency and accountability in the banking system, which has resulted in widespread corruption, money laundering, and fraudulent activities. This has led to a loss of public trust in the banking sector and contributed to the lack of confidence from both domestic and foreign investors.

As for the fourth challenge, the legal and regulatory frameworks governing the banking system are inadequate, and enforcement is often weak, despite recent efforts to improve through the Financial Action Task Force (FATF)-oriented reforms. Fifth, Pakistan’s banking system suffers from a limited level of financial inclusion. A significant portion of the country’s population remains unbanked or underbanked, with limited access to formal financial services.

This has resulted in a lower level of financial literacy and restricted availability of credit to smaller businesses, which contribute significantly to the country’s economic activity. As a result, the full potential of deposits remains unutilised, leading to a scarcity of funds available for lending to businesses and individuals, ultimately hampering economic growth and job creation.

To build a strong and stable banking system, it is essential to tackle these underlying challenges. This requires implementing policies and reforms aimed at establishing a transparent, accountable, and competitive financial sector.

This may include increasing the independence and bolstering regulatory authorities, improving financial inclusion, and establishing appropriate legal and regulatory frameworks. Shifting the focus to why the Pakistani baking sector is not at risk, the primary reason is its relatively secure lending portfolio, which mainly consists of public debt and high-yield consumer lending.

The government is one of the biggest borrowers from the banking system. It obtains funds by issuing Treasury Bills, Pakistan Investment Bonds (PIBs), and other short and long-term instruments, which are utilised to finance budget deficits and other government expenses.

The State Bank of Pakistan’s most recent data as of February 2023 shows that the government borrowed Rs21.74 trillion out of the total credits or loans.

Meanwhile, public sector enterprises that are not part of the government borrowed Rs11.24 trillion, and the private sector borrowed a comparatively smaller amount of Rs8.6 trillion. Within the private sector loans, personal loans accounted for Rs1.2 trillion.

Looking at this credit portfolio from an economic policy perspective, it could be considered highly inefficient. However, from a banking perspective, it is quite secure since the risk of default by the state is much lower than that of the private sector. It’s worth noting that the government’s borrowing from the banking system has increased significantly in recent years. This is mainly due to higher budget deficits and increased expenditures, such as Covid-19 relief measures.

While borrowing can help finance vital public services and infrastructure, excessive borrowing may lead to higher inflation, put upward pressure on interest rates, and cause macroeconomic instability. Hence, it’s crucial for the government to manage its borrowing carefully and maintain fiscal discipline to ensure macroeconomic stability.

In recent years, there hasn’t been any significant bank failure in Pakistan, with the exception of one odd case attributed to mismanagement. This can be attributed to the secure lending portfolio mentioned earlier, along with a high lending-deposit spread and relatively lax regulatory oversight that has allowed some banks to cross certain red lines. However, this does not necessarily guarantee that all is good.

The concentration and composition of the lending portfolio, along with structural issues, an economic slowdown, and external shocks, are all cause for concern. It’s important to remain alert and cautious. Banking and financial meltdowns spread quicker than fire.
 
Okay. In any case, I know he's of the religious bent and doesn't like us Punjabis and has made that pretty clear. The guy has no filter.

I remember @Maula Jatt saying he'd love to lay the smackdown on SaadH if he ever found him :lol:
Of course the so called martial race

IK didn't "boot him out". He just couldn't handle the pressure. Would you rather he sink his govt and shoot himself in the foot for wanting to bring in Atif Mian? Would it have been better if he had not brought him on board in the first place?

Could he have made a better stand for atif mian is debatable. Anything else is a cheap shot. There's plenty of legitimate reasons for criticism of IK, wanting to fix Pakistan is not of them.
Pray tell which economist from academic background has been able to turn a struggling third world economy around and that too with the uber corrupt military and bureaucracy sabotaging your every step.
 
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What did Dr. Manmohan Singh do in 1991 to restore Indian economy; Pakistan can do the same.

In 1991 India was functioning as a quasi-welfare state under the socialistic pattern of society as envisaged by Nehru and his family prime ministers. In 1991, India had a major balance of payment situation where Indian gold had to be mortgaged to buy raw material and spare parts abroad. Incompetent prime ministers had established a license raj which discouraged investment and development. Technically speaking….. The fiscal deficit was 8% of the GDP, wholesale price inflation had risen to 13% and retail inflation went even higher to 17%.

Total bad news….. very similar to what is happening in Pakistan today.

Dr. ManMohan Singh arrived at this critical juncture to end the Indian socialism. A new trade policy was announced which effectively ended the license raj. Imports were linked to exports. Another important change he brought about was massive devaluation of the rupee, which made exports attractive abroad. Many feel good subsidies were ended saving cash. Also a big game changing industrial policy was brought forward which encouraged private sector build factories, etc. Changes like these put Indian economy back on firm footings.

Situation in Pakistan

It is no different in Pakistan than it was in India in 1991. They have an added burden of defense and terrorism expenditure to be funded. It was alright when US and China both funded Pakistan. The former provided direct cash with no strings attached and the latter provided project by project loans like $54 billion for CPEC road and Gawadar build which at best is the worst example of non productive assets.

With $130 billion in loans against much of non productive economy, it was only direct cash grants by the US and the multiple time IMF bailout in last 20 years that Pakistan was afloat. It’s 600,000 men Army gobbled up any money the economy created. Hence, when loans became due, there was no money to repay, hence a national bankruptcy.

Pakistan is stalling making India type changes of 1991 as recommended by the IMF. In this period, even US and China have refused additional free cash. With the result that inflation is running 40%, imports have been restricted, no spare parts/raw material, hence the industry is grinding to a halt. There is an extreme shortage of food, resulting in food riots. To top it all, a political unrest with the arrest of Imran Khan has been created. It will totally unravel Jinnaha’s Pakistan.

What is the Good Remedy?

Follow everything what the IMF says. Cut back on military expenditures and new military purchases. Get the bickering politicians out or expelled from the government. Get an honest politician to head the government who will cool down enmity with India and remove the unnecessary burden of military expenditures. Get rid of nuclear weapons and hand them over to US for safe keeping.

Steps like that will help Pakistan to recover in three years.
 
@hari sud

Good article but MMS had nothing to do with it. It was the handiwork of the then Fin Secy S Venkitaramanan with the political backing being provided by the PM PVNR, the first Hindu PM to serve a full term as PM of India. MMS was just a gun for hire who would do everything that his bosses would ask him to.

Regards
 
Only if he was allowed to work in Pak.
Which country he practically worked for in improving economy?

Publishing article and opinions are different than practicals
 
@hari sud

Good article but MMS had nothing to do with it. It was the handiwork of the then Fin Secy S Venkitaramanan with the political backing being provided by the PM PVNR, the first Hindu PM to serve a full term as PM of India. MMS was just a gun for hire who would do everything that his bosses would ask him to.

Regards
Wrong……
 
What did Dr. Manmohan Singh do in 1991 to restore Indian economy; Pakistan can do the same.

In 1991 India was functioning as a quasi-welfare state under the socialistic pattern of society as envisaged by Nehru and his family prime ministers. In 1991, India had a major balance of payment situation where Indian gold had to be mortgaged to buy raw material and spare parts abroad. Incompetent prime ministers had established a license raj which discouraged investment and development. Technically speaking….. The fiscal deficit was 8% of the GDP, wholesale price inflation had risen to 13% and retail inflation went even higher to 17%.

Total bad news….. very similar to what is happening in Pakistan today.

Dr. ManMohan Singh arrived at this critical juncture to end the Indian socialism. A new trade policy was announced which effectively ended the license raj. Imports were linked to exports. Another important change he brought about was massive devaluation of the rupee, which made exports attractive abroad. Many feel good subsidies were ended saving cash. Also a big game changing industrial policy was brought forward which encouraged private sector build factories, etc. Changes like these put Indian economy back on firm footings.

Situation in Pakistan

It is no different in Pakistan than it was in India in 1991. They have an added burden of defense and terrorism expenditure to be funded. It was alright when US and China both funded Pakistan. The former provided direct cash with no strings attached and the latter provided project by project loans like $54 billion for CPEC road and Gawadar build which at best is the worst example of non productive assets.

With $130 billion in loans against much of non productive economy, it was only direct cash grants by the US and the multiple time IMF bailout in last 20 years that Pakistan was afloat. It’s 600,000 men Army gobbled up any money the economy created. Hence, when loans became due, there was no money to repay, hence a national bankruptcy.

Pakistan is stalling making India type changes of 1991 as recommended by the IMF. In this period, even US and China have refused additional free cash. With the result that inflation is running 40%, imports have been restricted, no spare parts/raw material, hence the industry is grinding to a halt. There is an extreme shortage of food, resulting in food riots. To top it all, a political unrest with the arrest of Imran Khan has been created. It will totally unravel Jinnaha’s Pakistan.

What is the Good Remedy?

Follow everything what the IMF says. Cut back on military expenditures and new military purchases. Get the bickering politicians out or expelled from the government. Get an honest politician to head the government who will cool down enmity with India and

What did Dr. Manmohan Singh do in 1991 to restore Indian economy; Pakistan can do the same.

In 1991 India was functioning as a quasi-welfare state under the socialistic pattern of society as envisaged by Nehru and his family prime ministers. In 1991, India had a major balance of payment situation where Indian gold had to be mortgaged to buy raw material and spare parts abroad. Incompetent prime ministers had established a license raj which discouraged investment and development. Technically speaking….. The fiscal deficit was 8% of the GDP, wholesale price inflation had risen to 13% and retail inflation went even higher to 17%.

Total bad news….. very similar to what is happening in Pakistan today.

Dr. ManMohan Singh arrived at this critical juncture to end the Indian socialism. A new trade policy was announced which effectively ended the license raj. Imports were linked to exports. Another important change he brought about was massive devaluation of the rupee, which made exports attractive abroad. Many feel good subsidies were ended saving cash. Also a big game changing industrial policy was brought forward which encouraged private sector build factories, etc. Changes like these put Indian economy back on firm footings.

Situation in Pakistan

It is no different in Pakistan than it was in India in 1991. They have an added burden of defense and terrorism expenditure to be funded. It was alright when US and China both funded Pakistan. The former provided direct cash with no strings attached and the latter provided project by project loans like $54 billion for CPEC road and Gawadar build which at best is the worst example of non productive assets.

With $130 billion in loans against much of non productive economy, it was only direct cash grants by the US and the multiple time IMF bailout in last 20 years that Pakistan was afloat. It’s 600,000 men Army gobbled up any money the economy created. Hence, when loans became due, there was no money to repay, hence a national bankruptcy.

Pakistan is stalling making India type changes of 1991 as recommended by the IMF. In this period, even US and China have refused additional free cash. With the result that inflation is running 40%, imports have been restricted, no spare parts/raw material, hence the industry is grinding to a halt. There is an extreme shortage of food, resulting in food riots. To top it all, a political unrest with the arrest of Imran Khan has been created. It will totally unravel Jinnaha’s Pakistan.

What is the Good Remedy?

Follow everything what the IMF says. Cut back on military expenditures and new military purchases. Get the bickering politicians out or expelled from the government. Get an honest politician to head the government who will cool down enmity with India and remove the unnecessary burden of military expenditures. Get rid of nuclear weapons and hand them over to US for safe keeping.

Steps like that will help Pakistan to recover in three years.


There was a decade long effort. M-papers were in making much before 91. Pakistan is nowhere near as prepared. Plus it's problems are bigger and different. Will take much more to solve this crisis.
 
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