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    WB places Pakistan with Congo, Ethiopia

    WB places Pakistan with Congo, Ethiopia

    By Nadeem Malik

    ISLAMABAD: The debt indicators for Pakistan have worsened and it has joined the severely indebted group of low-income countries, according to the Global Development Finance report of the World Bank.

    The report has included 33 countries in the category of severely indebted low-income countries (SILICs), of which debt indicators only for Pakistan, Benin and Kyrgyz Republic have deteriorated further.

    The report, officially released on Tuesday, shows that Pakistan's debt burden has increased from $30 billion in 1997 to $34.4 billion in 1999, but the gross national product (GNP) had declined from $63.5 billion in 1997 to $58.8 billion in 1999.

    The Global Development Finance-2001 has used two indebtedness ratios in its analysis. The ratio of the present value of total debt service in 1999 to average GNP in 1997, 1998, and 1999; and the ratio of the present value of total debt service in 1999 to average exports (including workers' remittances) in 1997, 1998, and 1999.

    If either ratio exceeds a critical value--80 per cent for debt service to GNP ratio and 220 per cent for the debt service to exports ratio--the country is classified as severely indebted. In case of Pakistan, external debt as a percentage of exports of goods and services (including workers' remittances) has increased from 265 per cent in 1997 to 344.5 per cent in 1999. External debt as a percentage of GNP has also jumped up from 47.4 per cent in 1997 to 58.5 per cent in 1999.

    This debt to GNP ratio is the only indicator that makes Pakistan's economy better than Highly Indebted Poor Countries (HIPCs); all other ratios are even poorer. The SILICs group, as classified by the Bank, includes some extremely poor countries of the world, like Angola, Benin, Burundi, Congo, Ethiopia, Guinea, Indonesia, Nigeria, Rwanda, Somalia, Sudan and Uganda.

    The statistical data of Pakistan shows that foreign direct investment (FDI) that peaked in 1996 to $922 million had declined to $370 million in 1999, and portfolio investment that touched the level of $1,335 million in 1994 (due to floatation of PTCL shares) had actually been shown as zero for 1998 and 1999, in the Bank report.

    The fiscal situation in Pakistan and the other countries is similarly difficult. Moreover, public deficits have reached a point where interest payments on debt, around 33 per cent of current government expenditures, are impinging on the provision of needed public services and development expenditures.

    The Bank states that the official foreign exchange reserves coverage for imports tended to decline across the South Asian region as merchandise import growth was high in 2000. This ratio fell precipitously low in Pakistan in September, to only one month of import coverage, and was also hovering around two months coverage in Bangladesh and Sri Lanka.

    Inflation, as measured by the consumer price index, averaged 3.5 per cent for the region, with some upward pressure in Pakistan toward the end of the year, but a tailing-off of inflation in India.

    The rise in oil prices in 2000 was counterbalanced by softer food prices and declining non-oil international commodity prices. Monetary policy was accommodating, as policy rates and inflation were largely unchanged, the report observed. The Bank reckons that the average growth for the South Asia region is expected to fall modestly in 2001, to 5.5 per cent, and to remain at this level in 2002, with a small up-tick in 2003.

    External demand is expected to soften, but the region as a whole is not very dependent on external demand. In particular, the region's merchandise exports won't be directly affected by the sharp slow-down in global high-tech sales.

    Fiscal deficits are expected to remain high, albeit a slowly declining trend, which will continue to limit growth below long-term potential. First, already high debt servicing prevents regional governments from expanding key public services and investment in infrastructure, both of which are direly needed to reduce poverty and clear economic bottlenecks. And second, the deficit tends to raise interest rates, thereby reducing private investment opportunities.

    The governments in the region are committed to improving the tax base and limiting expenditures. They also need to reduce subsidies to agriculture and energy. Broadening of tax base has been difficult to achieve in the past. Limiting expenditures may similarly prove to be challenging as regional tensions add to pressure to increase military budgets, maintains the Bank.

    The current account deficit is expected to remain above two per cent of GDP. Export growth is expected to decline and import growth will remain robust. Further moves to liberalise the import and foreign investment regimes are both likely to yield additional demand for imports, even if alternative trade barriers partially offset the impacts of liberalisation.

    The price of oil is expected to decline, but only modestly in 2001, thus providing only little relief. On balance, the report says, growth over the near term is expected to be respectable, but the lack of more extensive and credible reforms, particularly fiscal and trade policies, and the public debt overhang, are limiting growth to below potential in the region.
    http://www.jang.com.pk/thenews/apr20...main/main5.htm


    #2
    Gee...there's a surprise. When you have economic geniuses like Malik lauding China, decrying India without a thought of their own motherland, what do you expect?

    Comment


      #3
      Originally posted by Infoman:
      Gee...there's a surprise. When you have economic geniuses like Malik lauding China, decrying India without a thought of their own motherland, what do you expect?
      Right! And then we have Einstein's like you who believe more in a dumb organization's report against whom ppl stage protest in Washington D.C. then in your own Homeland.

      ------------------
      I hate signatures.

      Comment


        #4
        P'99:

        Didn't quite get your post? Are you trying to say something, intelligent?

        Comment


          #5
          Originally posted by Infoman:
          P'99:

          Didn't quite get your post? Are you trying to say something, intelligent?
          Speaking of intelligence, why is there an extra comma in your sentence?

          Comment


            #6
            ya.. but by ur logic, it is quite intelligent to say that WB report (which talks of hard numbers, hard cash that Pak has to return and relies on Pakistan govt. to get these numbers) is all biased and Pak economy is in the pink of its health. forget commas, worry about ur nation which is fast getting in coma.

            Comment


              #7
              Originally posted by ZZ:
              ya.. but by ur logic, it is quite intelligent to say that WB report (which talks of hard numbers, hard cash that Pak has to return and relies on Pakistan govt. to get these numbers) is all biased and Pak economy is in the pink of its health. forget commas, worry about ur nation which is fast getting in coma.
              ZZ,
              A certain amount of debt is good corporate strategy,
              I knew a afro american ,he enjoyed all fun stuff when he was young on credit card & paid or not paid it after wards god knows.he had car,stereo,cellular,you name it .He enjoyed at the expense of hard looking at cash numbers like you ,ZZ

              Atleast Pak,has a better attitude than you all looking at HARD numbers & not too HARDLY.

              After spate of suicides through out India across it ,after STOCK SCAM suicides ,these

              Indias Silicon Valley Of Death,after Stock Scam Suicides!

              :

                   
              India’s Silicon Valley of death

              Max Martin

              Bangalore, April 10: MORE and more people are killing themselves in the
              country’s Silicon Valley, says a National Institute of Mental Health and
              Neuro Sciences (Nimhans) report.

              The Nimhans study, to come out in a fortnight, estimates that 35 of
              100,000 Bangaloreans commit suicide. This is over three times the
              national average.
              In 1996, 831 suicides were recorded in the city. The figure rose to
              1,930 in 1999, says the report by Nimhans epidemiology department chief
              Dr G. Gururaj and Psychiatry professor Mohan K.Issac.

              Karnataka’s Bangalore clearly beats neighbour Kerala, the state with the
              country’s highest rate of suicides — 28 in 100,000. Through the second
              half of the 1990s, suicides in the city have steeply increased.

              According to the National Crime Records Bureau, the country’s suicide
              rate is 10 in 100,000. But this could be an underestimate, the Nimhans
              experts say.

              In 1998, media reported 124 suicides though police data showed 1,512 in
              Bangalore. Data from healthcare institutions in Bangalore, however,
              showed there were in fact 5,850 suicide attempts. So the problem is far
              worse than what records show.

              The Nimhans professors decided to study The Epidemiology of Suicides in
              Bangalore after a spate of media reports in late 1990s about the city’s
              young people, including IT professionals, taking the extreme step.
              ‘‘There were children, teenagers and young adults on the list,’’ Dr
              Gururaj said.

              ‘‘Bangalore’s environment has changed in a big way in the past decade.
              The quiet, calm, pleasant city has changed into one of hustle and
              bustle, with pubs and young students everywhere. Values are changing,
              liberalisation is here.

              ‘‘We were concerned about so many attempted suicide victims being
              admitted to city hospitals. Bangalore is no exception to the countrywide
              trend of rising suicides.’’

              At the Nimhans conference in December last year, Union Health Minister
              Dr C. P. Thakur spoke of his concern about the growing suicides in the
              country. Contrary to media perception of high rates of suicide among the
              rich, the Nimhans study shows that 90 per cent of suicides were from
              lower and middle income groups.

              The causes are multiple and often hard to pinpoint. There is no clear
              indication that economic changes have contributed to the trend. Skilled
              and unskilled workers constitute 24 and 19 per cent of those killing
              themselves; housewives 13 per cent, students 10 and professionals 6 per
              cent.

              Of those who die, 55 per cent are married and the man to woman ratio is
              1.5:1. And tellingly, at 35 per cent, the highest rate is among the
              15-24 age group, followed by 25-34 age group at 29 per cent.

              The Nimhans researchers found 40 causes for suicide, based on police
              records. In over 39 per cent cases, ‘‘physical illness’’ is the cause.
              ‘‘It was found out, however, that this was not the real situation. The
              cause was given for humanitarian reasons,’’ the study notes. ‘‘Or just
              to avoid problems,’’ as a researcher says.

              About 15 per cent are attributed to family problems and 9 per cent to
              alcohol. Financial problems registered 6 per cent and frustration in
              life and marital problems 4 per cent each. About 2 per cent of cases are
              related to education.

              The Nimhans experts stressed the need to prevent suicides. About 80 per
              cent of suicides occur at home, which can be prevented. A third of those
              who intend to kill themselves give early warnings and 10 per cent of
              those who attempt try again, the study notes.
                 
                 


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              "jo kHat main kahte they apni jaan mujhko
              aaj kHat likhne main unki jaan jaati hai .....

              Comment


                #8
                At least the Taliban should be happy we're gonna be joining them soon.

                Comment


                  #9
                  Now i KNOW that the WB is full of idiots.
                  how are we in line with DR congo??
                  Have they used the HDI or GDP/GNP indicators??
                  They are just looking at the debt issue and not the whole bloody picture.
                  Actually i correct myself the author is an idiot.
                  He is discussing the debt ratios to the GDP and GNP, which are relative to the economic conditions of a country.
                  The economy is in a down turn and was since 1999 - he is using 1999 figures, which mush worse than now.
                  He is not looking at the other issues.
                  So the correct title or summary statement should be as follows:

                  WB places Pakistan with Congo and Ethopia in accordance with its Debt ratio's in relation to its GDP and GNP indicators.

                  And ZZ you never say any thing intelligent.
                  ZZ does your baise over rule your common sense - i doubt you have any but heres to wishful thinking.
                  The WB placed pak with DRCongo due to our ratio indicators.
                  Going for prayers finish this off later.

                  ------------------
                  CROIRE A L'INCROYABLE

                  [This message has been edited by CM (edited April 13, 2001).]
                  You can't fix stupid. So might as well troll them!

                  Comment


                    #10
                    CM, why so harsh...

                    The report highlights the debt/service ratio. I think 80% of GNP related to servicing the debt says it all. What the hell don't you understand?

                    Comment


                      #11
                      Well, infoman, you can't look at the economy of a country with just GDP indicators.
                      You look at as i a whole.
                      Pak is no where near DRcongo or ethopia.
                      The HDI ratio is much higher.
                      It is only dealing with the debt of the country.
                      And not the whole economy.
                      Thus i feel this article is not correct.
                      And that harsh statement was meant for ZZ.
                      I should change that.

                      ------------------
                      CROIRE A L'INCROYABLE
                      You can't fix stupid. So might as well troll them!

                      Comment


                        #12
                        You may be right on the HDI front. However, it doesn't bode well for a country when most of the GDP is going to service the debt and arms. While the socials programs aren't being funded. So in the long term scheme of things, HDI is directly impacted.

                        Comment


                          #13
                          wait a min and tell me why u ppl are so nervous ... it's bcoz pakistan's name appeared there or u failed to see india's name there ........
                          I think pakistan's name coming there is not a surprise for pakistani's but .........
                          He was a self made man who owed his lack of success to nobody.
                          - Author on Cargill in 'Catch 22'

                          Comment


                            #14
                            http://www.dawn.com/2001/04/14/top7.htm

                            Pakistan joins rank of poorest nations: World Bank


                            By Our Staff Correspondent

                            WASHINGTON, April 13: The economies of Pakistan and Ukraine have declined so much during the past decade that they are now among the world's poorest nations, while China has surged out of the lowest-income category , according to the World Bank.

                            But Pakistan has said it has no plans to seek extraordinary debt relief under the World Bank-run Heavily Indebted Poor Countries Initiative, the Bloomberg news service said on Friday in a despatch based on the World Bank report that was released on April 10 (partly published in Dawn on April 11).

                            If Pakistan agrees to be declared as a poor country, it will lose access to the capital market and will become dependent on concessional loans.

                            But, Bloomberg says, Pakistan also wants to obtain new credits at below-market rates, and quotes the economics minister at the Pakistan embassy here as saying: "It's very important that in this short-term, critical period Pakistan should be given additional concessional funding. We need it."

                            In the World Bank's estimation, Pakistan joins countries like Rwanda and Nicaragua, which are so impoverished they are eligible to have hundreds of millions of dollars in loans forgiven by the World Bank and other creditors.

                            How to resolve the dilemma of being poor and yet seeking not to be formally declared as such so that Pakistan does not lose its eligibility for international loans confronts the country's economic decision-makers with their biggest challenge.

                            Pakistan's $26-billion debt burden reflects what World Bank chief economist Nicholas Stern has called the country's "lost decade" of the 1990s, when, according to him, poor policies, political instability and corruption stalled the economy.

                            Comment


                              #15
                              It is unfortunate that a country, which has all, the potential of a developing/developed country is going to be recognized as one of the poorest country. But it is more disturbing that some idiots who claimed to be so called ‘patriots’ are taking this as a joke. Perhaps they have never seen how poor people of country living in the worst conditions. People are still suffering from lack of basic amenities such as water (forget about clean), electricity, healthcare and so on. At present Pakistan is getting oxygen from WB, the moment they stop the aid; it would crumble like dry sand. CE is doing every effort to continue supply of oxygen even by signing CTBT and sending Dr. Abdul Qadeer home!

                              FARID


                              [This message has been edited by Farid (edited April 14, 2001).]

                              Comment

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