In the previous 4-to5 years 40% textile industry has shifted to Bangla Desh. 200 thousand power looms have transferred to Dhaka affecting 200000 families in Punjab alone. The material exported to Japan from Bangla Desh has 30% of the investments from Pakistani traders. Disappointed investors are extracting investments from Pakistan.
Simple traders are planning to transfer business to Bangla Desh and other affordable countries. What do you think is causing this unrest?
Karachi is facing very difficult times. The problems in Karachi are not terror related; rather political problems summed up with poor administration and turf war issues have caused the region to collapse.
Secondly, there are no resources for a common trader to run their business as industries have no power to function. Borrowing from central and commercial banks has exceeded 1000 billion, which means equivalent amount was printed. This indicates that we are going into deficit. When a country faces such a situation, investors tend to extract their investments and move elsewhere. Last year large-scale investment was going into negative.
Another drop side is that unemployment increases. Inflation affects those who have been earning marginally but those who lose their employment altogether have no choice but to resort to violence and crime.
When the country will have to pay back loan there will be no reserves in the treasury. Draw down has already initiated, with the decrease in 2 billion. Now, there are only three ways to replenish the money FDI, Foreign Aid or IMF, there is no other source. If the country wants to sustain itself the administration will have to improve their strategy, increasing exports and encouraging privatization will do the trick.
Debt that was accumulated in the previous 65 years has been doubled in the past 4/5 years. If this much amount is being borrowed my only concern is to know where it was spent. If there had been increasing development in the infrastructure of the country it would have been understandable but nothing of that sort has happened.
Source: Khari Baat Luqman Kay Saath – Dunya News – 21 May 2012 (Q&A)