A look at Pakistan's economy and if IMF loan will help it.. In conversation with Abhijit Iyer-Mitra.



hello viewers welcome to be gurus Channel I'm your host shri Iyer and I'm joined today by Abby sheet iron Mitra our expert on foreign affairs as far as Pakistan and its economy is concerned we've heard him he was on the bank on target in terms of what happened in Bala court and so on and so forth and I'm sure you'll love to hear from him what the state of Pakistan economy is today and also what transpired in that meeting of Imran Khan with the king of Saudi Arabia to discuss all this and more let's join a budget iron Metra a busy welcome to p guru's channel thank you see always a pleasure talking to you okay so lead us through what has been happening so IMF has finally given a loan what are the conditions for the loan are they trying and are they making sure that this doesn't become part payment for a previous loan that Pakistan may have taken with either a China or somebody else and and then let's take it from there what do you what are your thoughts on the loan so my tops on the loan are there is definitely some kind of a political quid pro quo that has happened because if you actually look at it there's no way that I am seeing right now that Pakistan is able to break its debt trap especially with the Chinese debt piling on because if you look at it sixty to ninety billion dollars being invested in the china-pakistan economic corridor you know economic growth requires it's not just infrastructure and growth follows you need an investment climate you need a security climate you need a regulation climate and all of that you're not seeing that with Pakistan as far as I know they haven't even been able to service their old debt properly and they still spending ruinous amounts of their GDP on security so you know that this IMF loan coming out of the blue on on the basis of the imf's own goons this should not have been possible so I'm really surprised that this loan actually got granted and I'm waiting to see what the the ims force a Pakistan to also devalue its currency what is the status on that and what are the day-to-day items like onion you know the usual stuff that people fuss about how is that affecting the common person look did I have seen people who are because I I've never actually been to Pakistan all my friends are in a certain strata of society that has relatively been immune from all of this because remember when we are talking even about our strata of society which is middle-class you don't actually get to be middle-class unless you have close ties with the military somehow somewhere or yeah even feudal family linkages and all of that right even for them they are beginning to feel extremely insecure about their savings and so on so forth which for me is very scary because I have lots of friends who work in think tanks and so on so forth in Islamabad and you know they are now thinking twice about onions garlic meat so on so forth it's it's getting worrying for them now the problem with the IMF is you remember IMF even though it seems to have a veneer of basically forcing economic compliance realistically there is also because there are voting rights of countries which get dictated politically within the IMF voting pattern and those will always be dictated politically so this would have had to end you know because of the Bretton Woods Agreement the IMF is controlled by Europe whereas the World Bank is controlled by America and in this case without the European countries actually having instructed their voters to vote for it this won't have been possible now the thing is you know Europe actually because it's bargaining power isn't so great unlike America which brings a whole chunk of bargaining power to the table I suspect that terms would have been a lot less what these terms are I can't really say because he even if they forced Pakistan to devalue its currency you know right now the Pakistani rupee is actually cheaper than the Afghan do B which says a lot about the state of those two economies right now it's also a natural correction because you know the Pakistan economy there's not much production happening at the moment but I'm I'm not convinced that the quid-pro-quo was an economic one I think devaluation is only the tip of what we're seeing the actual political cost will be much much higher it won't have been such a cheap deal to me devaluation means nothing what keeps Pakistani economy afloat if they don't have significant exports is it remittances from Gulf that keeps them going so it's not just the remittances from the Gulf is a big thing but it's not just that see the problem even in India in many ways it mirrors India a lot probably more so is that the assume that all transactions done off the books of electronic accounting is somehow black money the it isn't really it's the informal economy and if you look at Pakistan specifically the informal economy is massive you know I've seen Pakistan in my 41 years well out of it only about say 12 to 15 have been doing foreign and defence policy Pakistan has been at an economic precipice very often in every time we talk to the Pakistanis they like look it doesn't matter because only 10 to 15 percent of our economy is a formal economy the rest of it is the informal economy and it's mostly the informal economy that keeps them afloat now she's very tough to control of course and in this informal economy now the seabed infrastructure building is still in progress because they're supposed to be two main roads one of them going towards brother and I think one goes to Karachi I remember my geography right so is the Syrian sea by construction still going on look it's impossible even looking at Google Maps are not able to tell where sorry I'm not able to tell but going from Chinese literature Chinese language literature that have been reading translations of it seems that the Chinese are very upset with the pace of how the road construction is going because what is happening is every tin-pot little feudal lord landowner is basically it's starting the Chinese to pay the money for parts of that road which go over their territory now you know the way the Pakistan military works is that they could very easily crack down on them enforce some adjustment on these landlords and allow the road to seed because you know the national highway that linked the north to the south happened very quickly and it's one of the models which still works the the cops who police that road are still completely not corrupt they're extremely well it's a very good model so you're wondering why isn't this coming up as fast as it should between the Chinese work at such a rapid pace if they say if they give you a six-month deadline they usually finish it within four to five months unlike India which I'll give you six-month deadline and then even after six years it won't be finished so all is not well and the Chinese are not happy with the cooperation that they're getting from the Pakistanis in private when I talk to Pakistanis they are extremely scared about that route coming up they would much rather sabotage it and see to it that that road doesn't come online and so they don't have to pay up or please get into their debt burdens rather than see it come up and then walk all the way into a chair into him sort of you know a situation of no return with the Chinese well let's see some of the reality as far as my mum my knowledge goes gilgit has already been linked with mainland China and I believe one time there was an earthquake and a section of the road collapse and a new lake got formed and they don't even know how many people laid down their lives because they were caught unawares by that earthquake and and and then they decided to re-engineer the path and now you have like a four-lane each-way highway and it's beautiful those of you who want to go to youtube and look at Gigot highway to china you can see it it's beautifully done it goes through amazing amount of engineering that has been done to accomplish that why I'm saying all this to come to the point that they have done the hard yards right now it is mostly plain plain area that needs to be made why would they stop now I mean they would use any means necessary to keep going isn't it so here's the thing if you look get gilgit-baltistan this is pacified territory by looking at gosh me gilgit-baltistan I've never really had much representation in the Pakistani national discourse and debate and all of that unlike you look at Punjab and Sindh which rich but job mostly which controls the quality you can't afford to start seasoning land out there and become unpopular and start using votes out there so when it actually comes to Sindh and Punjab you have a completely different equations from gilgit-baltistan that's the main reason you will see that the progress won't be so fast out there even if it goes through I doubt very much this entire corridor will see the light of day because I think when spoken about this that you know ebook neither Karachi nor where Aguada have the economic footprint to be commercially viable today the Panamax and Suez mats kind of ships they are so efficient that you know unless you're looking at an economic footprint of thirty billion dollars hinterland Ekrem hinterland it just does not make sense for any of these big ships to stop out there and you've got to start thinking what exactly is it ships I'm going to stop there for mangos you know great mangoes for example because they rot so quick you have to take them in air freight microchips and so on so forth Pakistan doesn't reduce but if they wear those would also be related because the rate of replacement is too quick in six months you've got new phones coming out and so on so forth so what exactly is it that Pakistan produces that is actually shipped mobile like that once if you look at it footballs and they're very good at leather product so good football and you know sex toys Pakistan is the biggest producer of sex toys anywhere on the earth leather sex toys you know BDSM equipment and even that is I mean thirty billion dollars worth of footballs and sex equipment I think not yeah I don't think so and also here's the interesting thing China should know that even though they have essentially got Hammond Tata the port itself isn't doing a whopping amount of business I mean Sri Lanka cannot you know doesn't have the economy sighs – you know observe whatever comes its way in Hammond tota so isn't it essentially a replication of that experiment by putting it in Gwadar and Karachi why would the garage why would the Chinese want to make the same mistake again because there's something very very wrong with the Chinese feedback loop at the moment you know we keep asking them to give us a cost-benefit analysis for all these things and they never do because none of these sports makes sense militarily they don't make sense economically so we don't know what they're up to except the only thing we can think of is the fact that Xi Jinping is trying to create false bubbles that you know the Japanese when the economic bubble of the 80s the land bubble happened in the 80s you found that you know even when they knew at some point when the early warning started beeping when they knew things were going to collapse they still went on investing billions and billions of dollars in Australia for example a property I used to work at a hotel property which is when I was there it was worth less than 100 million dollars but it was bought by the Japanese for 40 billion dollars in those days yes so you know overpaying for certain things creating an artificial bubble in the hope that things will pick up III think we're heading for a huge huge crash of the Chinese because none of these projects are ever going to pan out you look at it even militarily these things make no sense because the concentration of force there can't be enough so you're basically dividing your forces into small packages which can be taken care of by a larger concentrated Navy so even militarily I'm not seeing the logic here and and I can only look back at history and try to figure out what it is that the Roman armies did because they were so huge they had to keep them occupied and and at one point they just said go and build archers they just keep building archers after arches our notches are actually the whole of Europe was conquered in there is a small island called Gaul which was fighting out in any of you you read as six comics you know what I'm talking about so you know the thing is it's funny ly enough the Roman army actually wasn't all that big you know even a better yeah even at its peak the Roman army was only about three hundred thousand people and the Roman economic system because you know they converted the Mediterra and see into that lake so into there see it was called Amar'e Nostrum which is ours kind of like a kind of arith it was kinda room in that sense and what people forget is that rome was actually a multi-ethnic society you had syrian emperors you had syrians mikkel the palace who became emperor you had spaniards like Trajan and Hadrian who became Emperor you had Africans who became emperor of Rome with certain amount of African blood in them as well so you know Rome was one of those multi-ethnic societies where they created a common market that actually worked and if you look at the Roman economy it all the pieces fit together because all the agriculture Egypt used to be the breadbasket and the bread used to come from there Anatolia and the Greece where the olives of olive oil used to come from the wines used to come from Italy to Gaul the gold used to come from Gaul and from Nubia in southern here in northern Sudan technically so it was a very well balanced economic zone at that point of time in history sure it doesn't make any sense that there is no sense to the geography there is no sense to the trade because you know there was a hard limit to the Roman Empire the Romans didn't expand into parthia they didn't expand into Germany not that they couldn't have it's just a Germany didn't make any sense you know when Augustus loses those two legions there in 14 BC and he keeps running all night for the rest of his reign after that he could have easily sent in five more legions and conquered Germany he did why because Germany just didn't have the agricultural surpluses to justify a Baathist here we're seeing the Chinese do the exact opposite there is nothing that they can gain from where they're going and still they're investing in it and that is the classic definition of Imperial overextension very interesting parallels you draw between the Romans and the Chinese of today now how do you see this thing play out when is it going to be the last straw on the camel's back I'm talk about Pakistan Pakistan has this incredible ability to play off one against the other they're really smart guys at one level they know they're screwed on the other they have this infinite ability to just keep betting the same old lies and keep going and going and going and going so I really don't know what is the last straw because remember they have nuclear weapons their ultimate weapon is nuclear blackmail where they see if you allow us to collapse as an economy do you never know what's going to happen with these nuclear weapons and they're going to go into jihadi hands and so on and so forth so I'm not you know the demise of Pakistan has been predicted several times it was predicted in the 50s it was predicted in 60s it was predicted in the seventies eighties nineties 2000s 2010s it's never happened I I don't think it's happening any time in my lifetime now let's get to that one specific incident of Imran Khan meeting the Saudi monarch now just looking at the video because there's no sound it almost seems like Imran was telling Waqar Younis is upstart that you bowl a bouncer and you get it for six you know you are out of the match or something of that nature but I don't know if you can decode it for our viewers what possibly might have transpired there and I mean overall let's let's say something happened but Saudi Arabia is one of the biggest benefactors of Pakistan isn't it do you think there's going to shift in that are you going to review all that I look I don't think there's going to be shift in that because as far as I'm concerned the Pakistanis have also taken the Saudis for a ride you know everybody believes that the Pakistani nuclear program is the proxy Saudi nuclear program and you know they have a warheads on demand because you know those Chinese they bought in the 90s they bought these Chinese long-range missiles which have absolutely no strategic use other than if they had nuclear warheads and the belief is the Pakistanis agreed to supply a nuclear warheads for these suicides but you know I personally don't think the Pakistanis we just hand over nukes to us of how these to use and at some level I think the Saudis knows which is why they're going in for their own nuclear program or at least threatening to go in for their own nuclear program that's number one number two is you know I have you know a lot of Saudi princes and so on so forth and in spite of what you've heard about them being these brutal people and you know willing to go after dissidents which they do at a personal level they are some of the most sophisticated extremely polite kind people you will ever meet at an interpersonal level and you know for them even using small bad words like damn screw things like that go ha oh my god so you know one of the things was that when the last king not King Salman who was the king before that I think in fact King Fahd was around when the Operation Desert Storm in 1991 happened against Iraqi wrath you know there was an interview of Hosni Mubarak at the time where he said that you know the Saddam Hussein used to come to me and talk to me about dividing up Saudi Arabia amongst us and used to use some choice expletives about King Fahd I never told King Fahd because he even heard half the words that Saddam Hussein used against him you would have Fator and died on the spot they're extremely courteous people at that level so you know even the act of you know this is considered extremely rude I mean even in our culture doing things like this is considered imagine how rude it is they're one of the most culturally one of the most rude things you can do is lift your feet up and show your foot the soles of your shoes to people that's like that's almost like Mubarak ah he may be related to slit your throat over it so in this case first of all he just sticky labels which is not polite second the realness Majesty was the fact that he walked away without waiting for a reply you don't just walk away from the king without waiting for a reply you wait to get dismissed dismissed not like in college our kind of thing it's more like you know he boughs to you you bow back and then you sort of withdraw yourself and you know their reaction to it which was a formal protest says a lot but the Saudis look there the promisee is quite mature in spite of Mohammed bin Salman is quite mature other than a formal protest it's not really going to go anywhere there's still too much interdependence out there now in all this mix where do you see the iran-pakistan relations go because you remember right around Ballack or time there was also an attack on Iran Iran's the border and it seemed like these guys are opened up fronts on both sides so how are things on that side look it's a very complicated relationship on one hand Iran doesn't like the way the entire Sunni Shia equation in Pakistan is going second they don't like to be the Taliban functions in Afghanistan even though the Taliban have stopped killing Shias there which was a very big issue for the for Iran in Afghanistan and the Pakistani foreign policy in general but the problem now is you know everybody assumes that Iran is this great negotiating power in all of that and that is true to some extent so Mohammad Javad Zarif for example the former foreign minister he's a fantastic diplomat all the diplomats like Elliot where will I be with the foreign minister once javad zarif they are fantastic diplomats but what people don't account for is that the rest of the diplomatic service is full of dunces and very frequently you have the I opponent role the top level who are also sometimes you miss about foreign policy and do bizarre things take a simple thing Chabahar for example I've never supported Java hard because for me it was just a similar white elephant project like what that both ways you know you you can connect it up to Central Asia but then what it means that's lutely nothing to connect it up to central asia when there is no market there and no produce to kind of export out of there except if afghanistan had been stabilized and those hagigah the copper mines and the years and so on so forth could have been extracted they can't so Chabahar how often have you heard of Chabahar being spoken about I've heard about it in the last 15 years and in even in the last 15 years that project has not been completed ask yourself why I've spoken to several former ambassadors to Iran and they say the main problem in has been the Iranians don't let us complete it so you know this nonsense about Iran wanting to get close to yes come nonsense if you use Java hard as a tactical device and they use the IP ID Iran Pakistan India pipeline as a tactical device that every time sanctions are imposed on them they start talking about it and getting us interested in them the moment their isolation ends they go back on it and they don't want us to build the Chabahar highway connecting not and they give up on the idea so you know Iran is well very unreliable partner this nonsense about Iran being a trusted friend and all of that and great civilization linkages I mean what civilization linkages people-to-people contact the last two people contact was in 1736 when neither shot came exactly and killed off half the population that is the last great people-to-people contact we had so all of this you know this is just the jiggery-pokery which the other so what are the options for India now that the Iranian crude is that spigot has been turned off where are India's options for making up that shortfall and would be at the same price thankfully the crude prices are going down again because of oversupply but what are your thoughts on that I mean where is India want to forget the equivalent stuff so the thing is our refineries are tuned towards Iranian crude because they're old and because the Iranian oil sector never really modernized because of the iran-iraq war and ever since that period from 1980 they never modernized the kind of crude they extract and the kind of crude reprocess is kind of matched similarly so it also involves a huge capital outlay for us to modernize our refineries and so forth but the problem here is that you know he could have these sanctions that America imposed where to fold the past sanctions not the current sanctions which was one that it prevents us from buying Iranian crude but the second level sanctions was for those countries like India that depended on Iranian crude the thing was you can't pay them in dollars you can only pay them in part of systems which means you cut off the currency circulation within Iran so you create a currency crisis where they actually end up a you there propensity to bargain goes down and they're actually getting paid less than the cost of extraction and transport which was bankrupting them in different ways so they were trading profitability for currency circulation in their own economies now I don't think people in India certainly people that I spoke to didn't seem to get the entire gist of it and in the way the Indian diplomatic service is structured there is no passing on of institutional knowledge they pass on institutional and enmity tikis ministry Kazakh Marrakesh many here which defense secretary is to be screwed over which Home Secretary is to be undermined and maligned but never about how to deal with Iran so what happens is on one hand we have lost the narrative that we failed to convince Trump that even creating which Iran can cause a loss to Iran in turn can cause havoc in a different kind of so I think the only party now having is to sit down with Netanyahu talk to him and because he has president Trump's here at least get him to go persuade President Trump to you know see our logic but tell me something u.s. is very unhappy about India getting s400 and it seems like that is a sticking point that if India were to walk away from that there is quote unquote a bounty of riches to be obtained from America what are your thoughts on that and what do you think its thoughts on that so you know III don't tell you the government's thoughts on that because the government seems to be extremely opaque all they've been doing is been putting out this line of petulance saying they're a sovereign country look you can keep throwing flailing your hands around and trying you know ballots karbala karbala that you're not going to get in I'm sorry but that's the reality of it unfortunately you know very good at diffidence this spirit of Krishna Menon lingers on in US but constructive diplomacy we're not very good at what we really need to do is go tell the Americans what the rationale behind it is which is very simple if we buy the s400 we can data map it we can electronically map it and we can come up with countermeasures for it and America should actually be thanking us for it instead of saying yah go to us and they should work with us on the s400 that's what we should be telling them instead of screaming sovereign Italy and so on so forth but I think it's beyond the scope of our diplomatic even to that because you know we we are we drink our own kool-aid so captivated by our own command of the English language we'd much rather go there and recite Shelley and Yeats and all of that rather than actually make an actual serious point that the Americans can get on board with you know you make an excellent point dealing with people from different countries what I've been told is that whenever you talk to anybody from the Western Europe probably Russia is included in this that the diplo speak this is quite convoluted whereas when you talk to Americans it is very transactional this for this this for this this for this yes something like that so I think you know there is there is hope as long as somebody's listening and and again viewers you're getting slightly different viewpoints from two different experts on security so you need to make your own call we are not trying to tell you that this is right that is right but I did want to ask this question and thanks for answering that object because at the end of the day Indian is to decide what is best for India just as the United States decides at every decision what it's best for it so thank you very much Ozzy and let's get again get together soon again on various topics and and hopefully we will not have any more Bala coat like instances because I think both countries yet to move on pasta thank you very much thank you three trait of cheese always thanks thank you




Comments
  1. American are just bullies
    And built empire on such values historical
    This is kind of business they been running for over two hundred years plus based on British model divide and rule
    By us buying S 400 we are going to give power to Pakistan again as they will pump more weopeans to Pakistan again

  2. Offcourse for 70 years Pakistani were married to Americans but after triple talq I think have changed now
    With new Chinese husband's thing's are not same
    So colusp is imanant

  3. Gwadar's value in the Chinese (leadership)mind is in using it as a Naval base. It has a large trade surplus. They can't lend it all. They dnt know what to do with the, large surplus. So they go after mega projects.

  4. CPEC is a spigot for Pakistan just as attempts to catch Osama bin Laden and neutralise Taliban was was. Pakistan knew that American spigot(aid) would dry uo once the job was done. Pakistan will prolong this project as long as it can, testing China's patience.

  5. THIS CHANNEL IS FULL OF STUPIDITY AND THE ANCHOR IS THE MOST BUFOON BASTARD I HAVE EVER CAME ACROSS ASK HIM TO READ ABOUT GEOGRAPHY OF HIMALAYA IS NOT HAVING BASIC IQ AND IN MY OPINION ABHIJEET IS ALSO A STUPID ANALYST WHO FEELS HE IS MASTER STRATEGIST AND ALL OTHERS ARE FOOLS…THERE ARE AMNY POINTS EVEN A KID CAN COUNTER …ALL THOSE ALSO THINK SO REMEMBER HE IS AMERICAN PARROT …PEACE…..

  6. IMF can't let porkistan die because USA wants Pakistan to keep India in check and to sell its weapons
    … Regarding sovereignity point that does this guy think that saying abt mapping and other things to usa will not b known by Russia and in short u will hv a bad relationship with Russia also.. I don't know much abt foreign policy but hv learnt that USA is no one's friend particularly of Asian countries.. It will stab u t first instance it will get.. So stop licking USA's ass

  7. Pakistan will soon be divided into 4 SECULAR DEMOCRATIC nonislamik parts pakhtoon punjab Sindh baloochistan Jai Hind

  8. Diplomacy is not always transactional, it is also used to transmit geo political messages. Indian diplomacy was never our strength but things appear to have changed in the last few years. It is too early to make any solid predictions. Iran and Russia, both are strategically important to us and we must deal with them.

  9. Abhijit Iyer Mitra has a low view of Indian capabilities. Seems like he's in love with his own voice. He comes across se a narsacist

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