The Trial of a Nation

You still believe Pakistan has a nuclear bomb? What a laugh! Suit yourself!

You still believe Pakistan has a nuclear bomb? What a laugh! Suit yourself!

I do not understand what all the noise is about. The Nation was tried. Who cares what the verdict was, or who the Judge was? Pakistan got the Bomb, by whatever means and that friends is no mean achievement. That is all that matters.

Faisaluno # 182: `the graph below shows how pkr has traded since 1998. as you will see from the graph, the value of the rupee has actually strenghthened since the end of 2001. this is the first time in the last 26 years that rupee has actually appreciated against the $. in fact i would guess that this is a first in the history of pak that this has happened. i would also like to remind you that rupee stregthening has taken place at a time when oil -pak`s largest import item -and commodity prices have risen to record levels. without the strong dollar inflows and reserves, the impact of oil price rise on pak`s economy would have be pretty brutal.`

It is an interesting chart for PKR but I do not agree with your commentary at all. The chart shows a commodity that has been in a bullish mode since 1998 and has gone into a consolidation phase where the spring is getting tightly coiled. Normally a breakout from a coil follows along the previous trendline and that does not bode well for the PKR.

Percentage wise, the PKR improved against the dollar in 1998 more than since 2001. The improvement since 2001 ended in 2003 and confirmed the double bottoms tested in 2000 and 2001. It also failed to take out the peak established in late 1998 and that confirms the bull trend. Chart reading is an art and not fit for the blind or half blind MBAs from Rawal Pindi.

If someone is going to measure the performance of an economy based on its currency, it would be useful to use a yardstick that is not changing. It would be more useful to plot PKR in terms of OZ. of gold or a basket of currencies rather than US $, that has been in a strong flux. To claim some benefit from oil prices being fixed in Dollars is even more muddled because you introduce a third variable. namely the price of oil, which has gone through the roof since 1998.

Whatever the merits of Urstruly`s article are, at least he does not suffer from the soft brained muddled thinking of soft MBAs and self styled economists. Engineering training does have some merits, even if it was done in Pakistan.)

re:#183 by faisaluno
Puny states like Pakistan indulge in the mistake of thinking that they are in the same league as Russia. Russian help to Iran in nuclear arena may be a balancing act or a way of saying to US that it is still a major power. Pak`s help to Iran, OTOH, will be looked upon as just a nuclear proliferation.
Sridhar

re: Nuclear ``insecurity``
One of the big fallouts of the A.Q.Khan`s nuclear proliferation is that Pak has earned a bad name in the nuclear club. Khan`s proliferation to North Korea, Iran, Libya are slowly coming to light. If he had smuggled in technology (which he did) just for national security and then scrupulously adhered to international norms and not proliferated, the world would have forgiven him and Pak. But the guy was a megalomaniac with intentions that went far beyond just national security. He was trying to create this nuclear weaponry for the muslim ummah to take on the rest of the world. As the Paki Army looked the otherway (or was unaware or did not care, whatever the case may be) he continued to proliferate and even advertised his wares openly in newspapers!
The world today is really concerned about the nuclear technology falling into wrong hands. It is bad enough that terrorists are using crude bombs to kill innocent civilians all over the word but imagine a scenario where these are not crude bombs but nuclear bombs!
A.Q.Khan`s proliferation in that context, was very irresponsible. Nuclear bomb can easily reach Hamas` s hands once Iran starts making nuclear weapons. Israel`s fears are well founded. It will take a long time and concerted efforts by Pak to project itself as a nuclear responsible state.
Sridhar

re: Balkanisation of Pakistan
Yet another Pakistani has attained ``nirvana`` after Ayaz Amir, that is, he has seen the light where most Pakis have not.
An interesting article. Pak, much like the erstwhile Prussia, is an Army with a State. This author argues Pak is being used as a Trojan Horse by USA. Pakis, meanwhile, are fritting away their energy in Jehad.
http://usa.mediamonitors.net/content/view/full/23518
Excerpts:
1. (Recently General Musharraf has started another jugglery show claiming that he is the man of peace. A good move since Kashmir and USSR are no longer in vogue. Musharraf states that he wants friendship with India and Israel. We do not question his good intentions but taken in depth this signals Musharraf`s acceptance that 1947 partition of India was a faux pas. If so many Muslims were killed in 1947, 1965 and 1971 then what was the use of the whole exercise in futility. If Israel is now being engaged by Pakistan`s military junta now why was it not done earlier? Why this whole game? Seen in depth Pakistan`s military junta has an institutional interest in peace now. It wanted war when it suited its institutional interests and it wants peace when it suits Musharraf! Seen in this context Pakistani military junta may be initiating a process similar to the one initiated by Gorbachev that led to disintegration of USSR.)

2. (In the Pakistani context following may be the implications:

* Pakistan`s smaller provinces may question the rationale for Pakistan .If India is not a threat and Afghanistan is a friend why not have an independent Baloch, Pashtun or Sindhi state .Why have a large army which has been involved in a dangerous foreign policy and in aggression against Pakistan`s neighbors. The Durand Line may have significance for the Pakistani junta but for the Baloch and Pashtun it is a Berlin Wall, which will become meaningless one day.


* Why should Pakistan have a nuclear program and a large standing army .Why should not the US insist that Pakistan reduce its army and dismantle its nuclear warheads.

* Conversely if the Pakistan Army is reduced why should the smaller provinces stay with the Pakistani Federal State. It is only the coercive force of the army that has kept the Pakistani confederation together.

* Why should not Pakistan`s neighbors demand a redrawing of boundaries.)
Sridhar

as for nuclear proliferation, thats not a concern because china was fully aware of what was going on. in fact i would argue wrt n.korea, pak was acting as a go between for china. and
since china now is emerging as big dog, pak will be ok. and sure, goras will huff and puff. but then, people dont seem to be paying to much attention to them right now:

http://www.cnsnews.com/news/viewstory.asp?Page=%5CForeignBureaus%5Carchive%5C200512%5CFOR20051205c.html

Russia Calls Sale of Missiles to Iran `Defensive`

Moscow (CNSNews.com) - Russia says its latest weapons sale to Iran, comprising more than $1 billion worth of missiles and other defense systems, is ``exclusively defensive.``

urstruly bhai,

first, please let me know the name of your broker who is quoting you a rate of pkr 69 to a dollar. the reason i am asking is because i can buy as many dollars as i want from the market at 60. my holiday spirit will really rise after i complete the deal with your broker.

second, as i said in an earlier post, most of the rupee depreciation took place in the two year period after the fall of nawaz sharif`s government. just to refresh your memory, pakistan had defaulted on some of its foreign currency obligations under nawaz. generally speaking, most investors regard default as a bad thing and respond by shunning the local currency which drives down its value.

since the default, pak`s credit profile - i.e. its ability to pay back foreign debt - has shown considerable improvement. exports and remittances have nearly doubled to $16 bn and $4 bn respectively and fdi this year will be around $ 2.5 bn - $3 bn compared to negative in `98. this has led to strong dollar inflows and as a result, pak`s reserves have gone up from less than $ 1 bn in `98 to $12 bn currently. because of this, sbp has been able to defend the rupee and maintain a level it sees appropriate. without the dollar reserves, sbp is about as effective as the iraqi army.

the graph below shows how pkr has traded since 1998. as you will see from the graph, the value of the rupee has actually strenghthened since the end of 2001. this is the first time in the last 26 years that rupee has actually appreciated against the $. in fact i would guess that this is a first in the history of pak that this has happened. i would also like to remind you that rupee stregthening has taken place at a time when oil -pak`s largest import item -and commodity prices have risen to record levels. without the strong dollar inflows and reserves, the impact of oil price rise on pak`s economy would have be pretty brutal. (click on the graph for a larger image)



btw, i also have to add that i think your gift of drama is pretty funny.

on pr front, the whole aqk episode is huge disaster for pakistan in the western world public opinion. on one extreme, the conclusion would be that the pakistani nuke establishment and its controller, the military is a rouge operation, involved in clandestine procurement and prolifiration activities with unstable and brutal regimes like north korea. the more charitable opinion would be pakistan does not have its nuke shop under proper state control. so, AQK is to blame if you subscribe to the second opinion.

Sheer waste of time and money to defend a man who is a self-confessed offender and an approver (Sultani gawaah) against the nation. He once used to brag about the devastation and carnage his bomb could bring upon innocent human beings. He was given a free hand to play with the destiny of this nation and what he did with it only time and an independent inquiry will tell.

Btv, in his introduction Mr Zafar has been stated to be a `Barrister`. I doubt very much as I never heard this before. Even his English does not support his claim to barrister-hood.

re: 158

hp, read rommel`s posts - he knows what he`s takling about.

Re: # 177 faisal

Bhai sahib you should at least try to read a report before you post it for public consumption. The Page 89 of this document shows the External debt that GOP has incurred since 1997/98 in (billions of )Pak Rupees, whereas page 92 shows the debt in (millions) of US dollars. Here is the big game of number crunching. If you consder debt in Pak rupees the debt has gone up from Rs. 2479.2 billion in 97/98 to whopping Rs. 4000.00 billion in 04/05. This is what Pakistani nation will have to pay if it decides to pay all of it today.

Now if we take the amounts in US$ the debt in 97/98 was 36072 millions and in 04/05 it was US$ 35882 millions (which is a lower number). This is what our debtors will get if we pay all of our debt today.

The reason for this anamoly is dispoportionate rate of inflation between US$ and Pak rupees and also the exchange rate that has shot up from about Rs. 37 in 97/98 upto Rs. 69 (buying) in 04/05. Another reason for anamoly is that while compiling their statistics IMF uses the exchange rate and dollar value of that particular year, whereas when the nation pays its debt back it has to pay the dollar value for that current year. For example, if the debt of the nation was $1, then if nation decided to pay its debt in `97 it would cost the nation Rs. 37, while if nation decides to pay this debt today, it would cost nation Rs. 69. Now the GDP is a combination of two things, internal revenue, which forms the 75-80% of revenue and extrenal which is the 22% of our export. In simple words Pakistani will pay at todays rate Rs. 17.25 (25%) from the revenue generate from exports and Rs. 51.75 from our internal revenue.

Now you do the math, how the coming generations of Pakistan will pay the debt incurred today, and has it increased or decreased.

The Nation newspaper has used the constant dollar value to calculate its figures , which are pretty much consistent with the debt we incurr everyday as it becomes known to us thru newspapers.

Faisal I appeal to your good conscience to stop deluding yourself and Pakistani nation. Pakistan is facing a moral and financial disaster, which will have its impact more than Bangladesh debacle. The fauji thugs during Bangladesh disaster were only stupid and arrogant, but now that they have form a symbiotic relationship with global vampires, we can only say inallillah-e- wa ina ilaihe rajeoon to pakistan.

hahaha...ahem how can you argue with a guy who is using the nation for econ stats?

for the rest of us mortals, i suggest the following imf report as a statistical source:

http://imf.org/external/pubs/ft/scr/2005/cr05408.pdf

please turn to page 92 to get info on pak`s debt. top line on that page has pak external debt data.

Re: # 173

I always do my homework. I hope the last post would have opened your eyes too. But I really doubt it. You probably belong to that corrupt ruling class of this country who have vested interests in keeping this country begging and corrupt.

Re: # 171 faisal

Are you for real?

1. Pakistan should not borrow money not only for that that we lose our sovereignity but our next generations will pay it back through their noses ( and rears).

2. Pakistan has incurred 10 billion US dollar worth of loan in the last 5 years alone. The kicker is that a couple of months ago Shortcut Aziz bragged that ``hum ne kashkol torr diya hay``( We have broken our begging pan) and the very next day he signed a deal with Japan for a loan of US$ 550 million.

Probably this will open your eyes. And have mercy on people of Pakistan and stop disseminating government lies and propaganda without verification.




Pakistan obtained $10b foreign loans


By Javed Mahmood


LAHORE - Pakistan has obtained about $10 billion worth foreign loans in last four and a half years, The Nation learnt on Sunday.

Besides the loans, the country raised $1.10 billion debt from the international financial markets by offering Euro and ‘Sukuk’ bonds in the last couple of years.
Data collected by The Nation revealed that Pakistan obtained $1.60 billion foreign loans in 2000-01, $2.316 billion in 2001-02, $1.55 billion in 2002-03, $1.242 billion in 2003-04 and $2 billion in July-December period of 2004-05.


Meanwhile, the government also introduced Euro bonds worth $500 million and Sukuk bonds amounting to $600 million in international market.

The inflow of foreign loans, obtained by Shaukat Aziz-led economic team, belie the government claims that it has forsaken begging bowl and reduced reliance on external borrowings. Contrarily, the Kashkol (Begging bowl) has been extended to raise more and more foreign loans during the last few years.

The government in December last year returned last two tranches of Poverty Reduction and Growth Facility (PRGF) to the International Monetary Fund (IMF).

This exercise made the government to indulge in hollow sloganeering that dependence on foreign loans has been given up and that it is in a position to survive without foreign loans.
However, the federal government claims nosedived when it rushed to the World Bank and the Asian Development Bank to obtain more loans to support foreign exchange reserves, facing pressure due to widening trade imbalance, stabilise rupee against dollar and pay the rising import bill.

The Nation learnt that government officials held frequent meetings with the said two donor agencies, which enabled it to disburse about $2 billion in July to December this fiscal.
The huge disbursement of foreign loans in six months of this financial year seems a new record because, in the past, the annual disbursement never exceeded $2 billion mark.
Official sources say that in 2004-05, the total lending of the donors to Pakistan might exceed $3 billion as the WB and ADB have not only enhanced the size of lending, but also expedited the disbursements.

Interestingly, in July to December this fiscal the total foreign debt of Pakistan increased by $1.45 billion from $35.25 billion in 2003-04 to $36.70 billion, mainly due to federal government’s policy to obtain more and more loans.

The burden of foreign loans on Pakistan is expected to further increase in next three years as the World Bank and the Asian Development Bank have doubled the annual lending to Pakistan under the new three-year programme on the request of the federal government, sources maintained.

http://nation.com.pk/daily/may-2005/16/index5.php

godot,

physical infrastucture is in a better shape compared to that of the neighbours although that is not saying much. govt has grand plans for improvemnt and the financing proposals seem credible. politicians, as is their want, are creating hurdles as with the kalabagh dam and therefore have to be neutralised. i think the important thing going forward is going to be the 2007 elections. i will be very optimistic if results go according to govt`s plan.