“SAARE ZAMEEN PER”

1. Fundamentals of Pakistani economy are very strong, there is huge growth potentail and we can bring our GDP growth up to 10-15% per year. So, thinking that there is any danger of financial collapse is simply lack of understanding.

2. Some people associate this growth with Musharaf government, which is totally a non sense, this increase in recent years is associated with “regional growth”, countries like China and India are also seeing rapid growth rate and the reason is our population and expanding middle class.

3. If we had political stability and enough power supply, our growth ratewould have been around 9-10%.

4. Food prices are hicking everywhere in world, in countries like US, Indonasia and Malaysia food inflation is touching worst level, yesterday Indianasia cut back all oil subsidies and Malaysia signaled to go for cuts, food shortage related “riots” are expected in many parts of world.

5. Oil prices are at at record level, 135 $/b oil is going to effect world economy badly and inflation is getting out of hands of governments. If oil goes to 150/b as predicted by Goldnam Sachs, many economies in world will go in to recession.

6. Now lets us have a look whats causing inflation in Pakistan;

i). First is our exports, we are giving too much subsidies to our textile sector which is not meeting its targets, the influncial owners and fudals who own textile in Pakistan take such subsidies and never invest in technological improvements.

Change in credit rating is related topolitical uncertanity, it dont effect much except adding a little in insurance rates of investment, but still Pakistani investment is giving tremendous returns.

ii). The main reason which is causing inflation is money sent to Pakistan by expetriate Pakistani’s, this money goes in to buying imported cars, electronics and building huge houses, it is not chanelised to industry or stock markets, as a result it adds in to more imports then exports.

iii) In Shauat Azaz a plan was drawn to chanalise this money to production sector but it remained just a paper plan and practically nothing happened.

NOW most important thing to understand is that there is a deficit of 10-12 Billion $ in our exports,but at the same time overseas Pakistani’s send 10-12 Billion a year to pakistan. SO AS A WHOLE OUR ACCOUNT BALANCE REMAINS SAME>

And most disappoint thing is to watch Kamran Khan on GEO TV talking about economy,trade deficit and Stock market, who even dont have an idea how trade works and whats are ethics of talking about stock markets.

Even in indipendent media of USA, SEC has such strict rule for commenting about market or spreading rumours, such TV would have been shut down in next hour, but our medi is free to spread any rumours, just like yesterdays news that 3 brokers has defaulted, even if this would have happened GEO would have fined for millions by SEC and shut down, its not only irresponsible but criminal.

And in last, if we have some good finance managers in government, we still are in position to be the best economy in Asia and best market in world.

As this is a responsible Blog so we need to be careful while posting simple speculations which can have negative impect.

thanks for your comments here

just one point: this was a ‘guest’ post

i fully agree with ‘media’ hosts’ lack of research and preparation when they have financial experts as guests… 95% of the time they wing through

i wish more people bring it to their attention