Balance Of Payments

“Overview on BOP of Pakistan”

PRESENTED BY: ASMA MUNAWAR MAHA HASSAN FATIMA TAHIR KANWAL AMIN

(M05BBA077) (M04BBA070) (M05BBA027) (M05BBA012)

ECONOMY OF PAKISTAN

BALANCE OF PAYMENT

Balance of Payments • Balance of payments is a statistical statement designed to provide for a specific period of time a systematic record of an economy’s transactions with the rest of the world. • An “economy” is comprised of economic entities (residents) that have closer association with that specific economy than with any other.

Balance of Payments •

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A systematic record of a nation's total payments to foreign countries, including the price of imports and the outflow of capital and gold, along with the total receipts from abroad, including the price of exports and the inflow of capital and gold. It is a tabulation of Dr. and Cr. Transactions of a country with foreign countries and organizations. It helps countries about making the monetary and fiscal policies and to solve the issues relating to the trade and

CONCEPTUAL FRAMEWORK OF BOP

• BOP registers transactions between residents and non-residents. • BOP deals with flows. • BOP uses double entry accounting system. • BOP adopts the principal of accrual accounting (time of recording). • BOP are normally expressed in domestic currency or in stable unit of account.

Why is it important ? The balance of payments statistics are used for a number of reasons within a country and worldwide. The most frequent users are: Domestic Economic Policy Government authorities are constant users of balance of payments and other statistics in carrying out their responsibilities of monitoring economic activity, formulating recommendations an appropriate balance of payments and domestic economic policies and evaluating various economic strategies.

Why is it important ? International Uses Regional balance of payments statistics are used both by the Pakistan’s authorities and by the authorities of partner countries to monitor developments in economic relations between Pakistan and those countries or specific country grouping. Pakistan’s balance of payments is used by academic and business observers as well as by policy maker around the world in monitoring developments in the worldwide payments position and in comparative studies of trends in the balance of payments of various countries. BOP data is also used by international bodies such as IMF, World Bank and other external stakeholders etc.

Who Compile it • Statistics Department of State Bank of Pakistan is responsible to compile Pakistan’s Balance of Payments Statistics (BOP) as per IMF format (BPM5)

Periodicity and Timeliness • Monthly (highly provisional), Quarterly and Annually. • Monthly: By the time lag of 36 days after the reference Month. • Quarterly: By the time lag of one quarter after the reference period.

BOP OF A COUNTRY • Payment received from a foreign country is a credit transaction. • The principal item shown on the credit side are: – exports of goods and services, – transfer receipts, – borrowing from abroad, – foreign direct investment – and official sale of reserve assets including gold to foreign countries and international agencies.

BOP OF A COUNTRY (Contd) • The payment to a foreign country is a debit transaction. • The principal items on the debit side are: – import of goods and services, – transfer payments to foreigners, – lending to foreign countries, – investments by residents in foreign countries and official purchase of reserve assets of gold from foreign countries and international agencies.

BOP OF A COUNTRY (Contd) •

The debit and credit items are shown vertically in the BOPs account of a country . Horizontally, they are divided into three categories.

• MAJOR COMPONENT OF BOP e) The current account f) The capital account g) The official settlement account or official reserve asset account.

Current account •

Current account

I.1 Imports and exports of goods (merchandise) I.2 Imports and exports of services (payments for legal services, shipping services, tourist meals,…) I.3 Factor income receipts/factor income payments to foreign countries (interest and dividend payments, earnings of firms and workers operating in foreign countries) I.4 Current unilateral transfers: gifts (transfers) across countries that do not purchase a good or service nor serve as

“invisible current transaction s”

Current account I. • • • • • •

Goods FOB

Credit

Debit

General merchandise. Goods for processing.  Repairs on goods.  Goods procured in ports by carriers  Non-monetary gold.

Net

Current account • II. Services Net  Transportation.  Travel.  Communication  Construction   Insurance  Financial

Credit

Debit

Current account III. Current transfers Credit Net • General government   • Other sectors • ► Workers’ remittance • ► Resident FCAs • ► Others

Debit

The capital account The capital and financial account records loan transactions, investment flows, shortterm capital and other related items. Financial Transactions consisting of direct investment and purchases of interest bearing financial instruments, non interest bearing demand deposits and gold , comprise the capital account.

• Financial account: – the difference between sales of domestic assets to foreigners and purchases of foreign assets by domestic citizens.

• Financial (capital) inflow – Foreigners loan to domestic citizens by acquiring domestic assets. – Foreign owned (sold) assets in the domestic economy are a credit (+)

• Financial (capital) outflow – Domestic citizens loan to foreigners by acquiring foreign assets. – Domestically owned (purchased) assets in foreign economies are a debit (-)

The Official Reserve Account a. Function: 1.) measures changes in international reserves owned by central banks. 2.) reflects surplus/deficit of a.) current account b.) capital account

The Official Reserve Account • Official reserve transactions consist of movements of international reserves by governments and official agencies to accommodate imbalances arising from the current and capital accounts. • The official reserve assets of a country include 3. its gold stock, 4. holdings of its convertible foreign currencies and SDRs and its net position in the IMF

The Official Reserve Account Reserves Assets  Net

Credit

Monetary gold  SDRs  Reserve position in the Fund.  Foreign exchange Other claims

Debit

Net Effects: a.

Sum of all transactions must be zero: 1.) current account 2.) capital account 3.) official reserves

BOP’s EQUILIBRIUM • Equilibrium is that state of BOPs over the relevant time period which makes it possible to sustain an open economy without severe unemployment on a continuing basis.

Types of BOPs Equilibrium 2. Static Equilibrium 3. Dynamic Equilibrium

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STATIC EQUILIBRIUM • Exports equal imports including export and import of services as well as goods and other items on the BOP– short term capital , long term capital and monetary gold are on balance, zero • Not only should the BOPs be in equilibrium but also national money incomes abroad. The foreign exchange rate must also be in equilibrium.

Dynamic Equilibrium. • The condition for the short term is that Export and imports differ by the amount of short term capital movements and gold and there are no large destabilizing short term capital movements. • The condition for the long term is that imports and exports differ by the amount of long term autonomous capital movements made in a normal direction, when the BOP is in equilibrium the demand and supply of money is equal.

Types of Disequilibrium • Cyclical disequilibrium • Secular Disequilibrium • Structural Disequilibrium

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Cyclical Disequilibrium • If two countries passing through different paths of business cycle or the countries may be following the same path but income elasticities of demand or price elasticities of demand are different, it results in cyclical disequilibrium.

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Secular Disequilibrium • The secular or long run disequilibrium in BOPs occurs because of long run or deep-seated changes in an economy as it advances from one stage of growth to another.

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Structural Disequilibrium Structural disequilibrium has two sub-types: 3.Structural disequilibrium at goods level and 4.Structural disequilibrium at factor level.

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CAUSES OF DISEIQUILIBRIUM •

b) c) d) e)

There are several variables which affect a country’s BOP. Any change in these variable would bring disequilibrium in BOP. These are:National Incomes at home and abroad The prices of goods and factors of production The supply of money and rate of interest. State of technology, taste , distribution of income etc. 33

GENERAL MEASURES TO CORRECT THE BOP DISEQUILIBRIUM.

• Exchange Depreciation (Price effect) • Devaluation (by Government) • Tariffs • Import quotas • Export duties.

EXCHANGE DEPRECIATION (PRICE EFFECT) • Fixed Exchange Rate: which is kept stable by monetary authority, fluctuation with small limits. • Exchange rate flexibility: means that demand for foreign exchange matches its supply so that there is no disequilibrium flows of money between the country and the rest of the world.

EXCHANGE DEPRECIATION (PRICE EFFECT) cont. • Internal Balance: simultaneous balance in product and money market assuring full employment with out inflation. • External Balance: means balance in BOP, neither deficit nor surplus. • Expansionary monetary and fiscal policies under the flexible exchange rates exert strong influence over national income. It also help in maintaining internal and external balances.

DEVALUATION • It is an official action which reduces the price of domestic currency in terms of foreign currency. • Where is depreciation or appreciation is the result of market forces. • Devaluation is effective when there is a fixed exchange rate. The aim of devaluation is to correct the BOP’s deficit.

TARIFFS • Tariff is tax on imports (import duty or custom duties) • These are used for two purposes , revenue or protection.

IMPORT QUOTAS • These are alternatives to tariffs. • Fixed volume of commodity is allowed to be imported in the country during a specified period.

EXPORT DUTIES • When world price is higher than domestic prices, exports become more lucrative. In such situation, government may levy export duties. • These are levied to protect domestic consumers.

MAIN CAUSES OF DISEQUILIBRIUM • • • • • • • • • •

SLOW GROWTH OF PRODUCTION: POLITICAL UNCERTAINTY FISCAL POLICIES PAKISTAN’S TARIFFS TRADE RESTRICTIONS OF DEVELOPED COUNTRIES. HEAVY IMPORT OF FOOD GRAIN AND ENERGY EXPORT OF PRIMARY COMMODITIES DEPRECIATION OF PAKISTAN RUPEE INFLATION FOREIGN EXCHANGE REMITTANCES

Exchange Rate Regime • Floating exchange rate • Fixed exchange rate • Managed float

Exchange Rate Regime • A floating exchange rate or a flexible exchange rate is a type of exchange rate regime wherein a currency's value is allowed to fluctuate according to the foreign exchange market. A currency that uses a floating exchange rate is known as a floating currency. The opposite of a floating exchange rate is a fixed exchange rate. • Many economists think that, in most circumstances, floating exchange rates are preferable to fixed exchange rates. However, in certain situations, fixed exchange rates may be preferable for their greater stability and certainty. In cases of extreme appreciation or depreciation, a central bank will normally intervene to stabilize the currency. Thus, the exchange rate regimes of floating currencies may more technically be known as a managed float. A central bank might, for instance, allow a currency price to float freely between an upper and lower bound, a price

PAKISTAN’S BOP • The 6th most populous country(164 Million 2007) in the world is suffering its greatest internal crises since partition, with security, economic and political interests. Wheat and other food staples are scarce and hunger is on the rise. Energy crises have soared and electricity blackouts are every day occurence. Inflation is beginning to pinch even those who believed that they had achieved middle-class security.

PAKISTAN’S BOP • Pakistan payments problems have been chronic since the 1970s, with the cost of oil imports primarily responsible for the trade imbalance. The main reasons are: – export of raw material and import of finished goods. – Natural disasters. – Decline in foreign remittances and foreign aids.

• The growth of exports and of remittances from Pakistan working abroad (mostly in the Middle East) helped Pakistan to keep the payment deficit in check. Since the oil sector boom began subsiding in the early 1980s, however, remittances declined.

PAKISTAN’S BOP • Remittances from overseas workers peaked at $2.9 Billion in 1983, and then dropped to $1 Billion in 2001. This trend esp. accelerated during the Gulf War, when nearly 80,000 Pakistani in Kuwait and Iraq lost their jobs. Only about 25% of these jobs had been regained a year after the end of the conflict. Increased imports and softer demand for Pakistan textiles in major markets also caused the current account deficit to further

Remittances FY 06-07

FY 07-08

FY 08-09 (July _Nov)

US $ 5.49 B

US $ 6.5 B

US $ 2.97 B

From July – Oct 07 remittances increased 10.4% From July – Oct 08 remittances increased 26.4%

PAKISTAN’S BOP • The BOP position weakened in 1996 as imports grew by 16% and exports by only 6%. Foreign Exchange Reserves fell to around $800 Million by mid-1997. By 2000, foreign debt equaled 100% of GDP. The Gov. took steps in the early 2000s to liberalize and deregulate the exchange. This caused increase in the liquid Foreign Exchange Reserves in 2001 and also because of inflows from IFI. Export growth in 2001 was primarily due to higher exports of primary commodities such as rice, raw cotton, and fish and other manufactures such as leather, carpets, sporting goods, and surgical instruments.

Foreign Exchange Reserves FY 06-07

FY 07-08

FY 08-09 (July _Dec)

US $ 15.18 B

US $ 10.83 B

US $ 9.34 B

Main sources of Foreign Exchange (excluding FDI) •

Textile exports

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Workers remittances

Exports FY 06-07

FY 07-08

US $ 17 B

US $ 20.50 B

FY 08-09 (July _Nov) US $ 10.16 B

In FY 06 – 07 exports increased 4.5 %. In FY 07-08 exports increased 7.5%.

Largest Merchandise Export Destination • USA (21.3 % ) • Others are UAE 10.4%, Afghanistan 8.4%, China 5.2%, UK 4.7%.

Exports • Our major exports are textile, rice, leather goods, sport goods, chemicals and carpets. • Specifically the textile sector which until recently had been the major driver of the exports growth could only muster 1% growth from last year. Even the weak textile export growth during July-oct 08 was largely contributed by rise in the low value added category of synthetic textiles and in knitwear exports. Exports of all the middle and high value added categories included garments, bed wear and towel experienced a fall. This all due to enhanced competition. Major reason is china’s increasing textile exports to EU and USA.

Imports FY 06-07

FY 07-08

US $ 30.99 B

US $ 39.96 B

FY 08-09 (July _Nov) US $ 18.83 B

ain Imports: Machinery and Transport equipment (26 %) Mineral Fuels (24 %)

ur major importers are China 16.2 %, Saudi Arabia 10.9%, AE 10.1%, USA 5.7%, Kuwait 4.9%, Japan 4.4%. Import Bill is more than our export earnings because apart from the near doubling of our demand for oil, most of the rest of our import expenditure is on capital goods. We are bringing in machinery for new factories and infrastructure and for expanding and modernizing extra existing facilities.

Trade Deficit FY 06-07

FY 07-08

US $ -13.53 B US $ -20.74 B During July – Nov 07 Trade Deficit increased by 18.7%. During July – Nov 08 Trade Deficit increased by 32.3%.

FY 08-09 (July _Nov) US $ -8.67 B

Foreign Debt 1999

2006

US $ 39 B

US $ 36 B

2008 US $ 45 B

The Gov paid nearly $ 3 B in annual debt servicing payments in the last FY, this year it will be even more. Together the debt servicing payments amount to nearly 40% of the entire budget of $ 30 Billion.

Foreign Direct Investment FY 05-06

FY 07-08

US $ 3 B

US $ 5.1 B

FY 08-09 (July _Nov) US $ 1.40 B

Singapore has been the single largest investor in Pakistan from July-Nov 08. FDI from Singapore 19.8%, USA 19.6%, Malaysia 12.7%, UK 7.1%, Switzerland 4.4%.

“Debt and Investment dilemma” • Pakistan is suffering from “Debt and Investment dilemma”. On debt our dilemma is that we must not borrow, because it increases our debt servicing liability but we must borrow if we wish to develop rapidly. As to investment we want to draw in FDI to increase our declining Foreign Exchange reserves, but investors look at the health of our Foreign

PAKISTAN’S BOP • Decisions made by the last Gov. which leads an economic meltdown. This was done by bumping money into the economy. Previous Gov. gave middle and lower income groups access to banking credit. Interest rates were lowered to 5% thus lowering the cost of doing business and Gov. expenditures were increased. These actions proved

PAKISTAN’S BOP • Inflation was the direct result which touched unprecedented levels. Inflation a measured by CPI rose to 24.7% in the 5 months through Nov. compared with a year earlier. Commodity prices began to increase, climbing to new heights everyday in the summer 08. At one point, the prices of oil almost touched $150 a barrel. Pak. is increasingly rely on imported goods as compared to its domestic production. Since Pakistan is a large oil importing country this worsened the already serious BOP situation. In the year 08, the import bill increased by almost 45.4% and the share of oil bill in

Inflation FY 06-07

FY 07-08

FY 08-09 (July _Nov)

7%

10.3%

25%

An opinion survey by the US- based International Republic Institute shows that 58% of Pakistanis believe rapidly rising inflation is their main concern, while 77% cite on economic issue as their top priority.

PAKISTAN’S BOP • Depletion of Pakistan rupee in the last year also posed a great pressure for Pakistan economy. The rupee in 17 oct 08 plunged to an all time low of Rs. 84.40 compared to 62.72/ dollar

Exchange Rate FY 06-07

FY 07-08

FY 08-09 (July _Nov)

US $ = Rs. 60.5

US $ = Rs. 71

US $ = Rs. 78.9

SBP First Quarterly Report FY 08-09 • In the first Quarterly report for the FY 08-09 which was released on 29 Dec 08 pointed out that both fiscal and current account deficits estimated to improve in the upcoming quarter of FY 09. • Federal Gov. had projected to achieve 5.5% real GDP growth rate during FY-09. The report further said that Pak. export’s are expected to be in the range of $20.50 B to $22 B while imports are projected to remain around $35 B for the current financial year. • The report maintained that global recession and risk averse behaviour of investors would likely to severely impact international trade and level of Foreign exchange inflows in the economy. SBP estimates for both imports and exports have been revised downwards, with a more pronounced effect on imports.

SBP First Quarterly Report FY 08-09 • It said the disbursement of first release of $3 B by end Nov. 08 under the programme meant that any immediate risk of default on external obligations receded, with substantial improvement in Foreign Exchange Reserves. Also, export growth has strengthened and import growth moderated somewhat. This lent strength to the rupee, reducing the impact of an important generator of inflationary pressures. • The report said that the gain on the external account was helped by a sharp decline in international commodity prices that is expected to substantially lower the country’s import bill, offering the possibility of a decline in the country’s very large current account deficit and

•The global financial crisis of 2008

is an ongoing major financial crisis •It became prominently visible in September 2008 with the failure, merger or conservatorship of several large United States-based financial firms.

• The crisis has led to: a liquidity problem and the de-leveraging of financial institutions • The crisis continued to change, evolving at the close of October into a currency crisis.

Pakistan is poorly integrated with the global economy. Pakistan is likely to be protected by the underdeveloped status of its trading sector. No significant impact on either the quantum or value of exports

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The financial crisis has suddenly reversed these trends. The price of oil has declined by 50% The prices of traded food crops have registered significant drops.

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Even though Pakistan may escape the immediate negative consequence of the turmoil in the West, there will be long-term consequnces. Over the years the US has become the single most important source of remittances for Pakistan,

The FIA made raid a telephonic conversation about the illegal transfer of about 0.5 to $1 mn Dunya International Moneychangers in Gujranwala seized $ 786,000 and four vouchers of Havala Havala and Hundi are the two most popular channels of illegal transfer of foreign currency from one country to another.

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Munaf Kalia and Javed Khanani confessed of transferring foreign currency of locals to their relatives and friends living abroad. money exchangers have transferred around $ 10 billion for the last five years from the country. On an average, they were transferring about $ 10 million every day through the “Havala” and “Hundi” system

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FIA is pursuing a two-pronged strategy: –registering a case –an out-of-court settlement. Malik Bostan offered FIA DG to arrange $500mn($6 billion (Rs480 billion) a year) a month to maintain dollar-rupee parity said if entertained, it could help both the government and the other stakeholders

The forex scandal of the exchange companies involved in transferring millions of dollars abroad Bt was not a major cause of depletion in foreign exchange reserves,

The FoP is not a donors’ group but is a support group The FoP was launched on in New York at a high-profile meeting of world powers on the sidelines of the UN General Assembly session The FoP comprises the United States, Saudi Arabia, Britain, France, Germany, China, the United Arab Emirates, Canada, Turkey, Australia and Italy.

• Pakistan is supported through a series of negotiations by various world economic bodies - World Bank, Islamic Development Bank, Asian Development Bank, Japan-IBRD and the UK’s Department for International Development,” Zardari said, suggesting that options remain open for his country to avoid a loan from the IMF.

• “The IFIs have appreciated our economic programs and social safety net, but they want to get it approved from the IMF before providing us financial facility,”

• The Friends of Pakistan group have already advised Islamabad to first move the International Monetary Fund to qualify for their formal financial commitments which they will make in a meeting to be held in Dubai on Nov 17.

• Pakistan’s ailing economy, is left with no option but to obtain the IMF loan.

The International Monetary Fund (IMF)

Introduction of IMF • It is an organization of 185 countries, working to – foster global monetary cooperation, – secure financial stability, – facilitate international trade, – promote high employment and sustainable economic growth, – and reduce poverty around the world

original purpose • to help countries in need to finance balance-of-payments (BOP) deficits so that they would not take actions that would harm their trading partners. • countries do not go bankrupt. • IMF credits come with policy conditions that borrowing countries find painful to accept and implement.

IMF & PAKISTAN

Features • The International Monetary Fund (IMF)’s executive board’s meeting, • The loan will carry 6-6.5 per cent interest against the SDR (special drawing rights) of $1.3 billion to help Pakistan restore financial and economic discipline

• Of the $7.6 billion loan, $3.1 billion will be made available by the IMF immediately to strengthen the reserve position. • while the rest will be distributed in six equal installments. • The money is likely to be transferred to the SBP’s account in the US Federal Reserve in New York.

• The IMF will extend The 23-month StandBy loan under the newly created shortterm liquidity facility (SLF) • Pakistan is to pay $45-50 million more to the IMF apart from repaying principal of $7.6 billion

Pakistan accepts 11 IMF conditions

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-Central Excise Duty (CED) on services and agriculture sectors at the rate of 8-18% in place of the General Sales Tax (GST)

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-the Pakistani currency will also be devalued

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-the release of 60% funds under the Public Sector Development Programme (PSDP), would be reviewed downward to 45 %.

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-freezing of non-development expenditure under the defense budget for the last three quarters of the current financial year

1. Non-provision of grants to government departments 2. Ending subsidy 3. 20% reduction in non-development expenditures 4. Increase in markup & inter-bank transactions 5. Uniformity in the inter-bank and open market dollar exchange rate 6. Stoppage of intervention in stock markets. 7. The IMF will be informed at the time of the issuance of credit line by any international financial institution, including the World Bank

Pakistan's economic program

• The Government's program has two objectives: – first, to restore overall economic stability and confidence through a tightening of macroeconomic policies – second, to do so in a manner that ensures social stability and adequate support for the poor during the adjustment process

• The authorities' program for the coming 24 months envisages a number of additional steps: 1) The fiscal deficit, excluding grants, will be brought to down from 7.4 percent of GDP in 2007/08 to a more manageable 4.2 percent in 2008/09 and 3.3 percent in 2009/10—in line with what it was three years ago.

2) The State Bank Of Pakistan (SBP) will act on monetary policy to build its international reserves, bring down inflation to 6 percent in 2010, and eliminate central bank financing of the government 3) Expenditure on the social safety net will be increased to protect the poor 4)on the social safety net of 0.6 percentage points of GDP to 0.9 percent of GDP. for 2008/09

• The IMF deal will bring the consumers, subscribers and provincial governments on a collision course after its hidden conditions will be revealed. • The major controversy is about the interest rate to be paid by Pakistan. • Pakistan has never obtained structural adjustment facility loan or balance of payment assistance on mark-up rates higher than 3 per cent.

Not the mark-up but the conditions attached are worrisome for • The new loan to Pakistan for which the two sides agreed on Saturday is stringed to conditions for increasing tolls, energy price and taxes by fiscal and administrative measures in 2009

for 2009-11

•The transport tolls might be increased four times 15% •the energy rates would be increased by more than 30%. –Electricity prices by 32% –gas by 39% –petroleum prices by 15 % •medicine prices would also be increased as the payable income tax would be increased by at least 100 per cent

• raising the discount rate from 13 per cent • set a course for increasing tax to the GDP ratio from 10% to 15% in the next five to seven years • There is a need for upgrading the Index Production Unit (IPU) related to agriculture production • and imposition of the GST on services also required

• sources said the government had accepted the IMF demand to cut down development and non-development expenditures by 3540% and 7-10%,

• They expressed apprehensions that in case of missing the agreed conditions in the current fiscal year, the second or third tranches would be in danger.

President Zardari’s visit to China, • Following President Zardari’s visit to China, the Chinese government has agreed to extend financial assistance of US $500 million to the government of Pakistan.

Islamic Development Bank • State Bank of Pakistan said it has received $200 million from the Islamic Development Bank as the country’s reserves are barely enough to cover nine weeks of imports.

• Standard & Poor downgraded Pakistan’s ranking twice in the last five weeks ñ first on Oct 6 and again on Nov 14 • S&P lowered Pakistan’s foreign currency debt rating from B to CCC+ • Pakistan’s local currency debt rating was lowered from BB- to B-.

AFTER IMF LOAN • it had raised its long-term foreigncurrency sovereign credit rating on the Islamic Republic of Pakistan from 'CCC‘ to 'CCC+‘ • and affirmed the 'CCC+' long-term localcurrency rating.

• The upgrade of Pakistan incorporates the disbursal of the first tranche (US$3.1 billion) of the US$7.6 billion International Monetary Fund (IMF) loan facility in November 2008.

“Beggars are never given choices ... Leaders made us beggars, they have 'kashkool' in their hands and now they're begging in front of IMF, US, Saudia, China, Friends of Pakistan, Iran, Germany, NATO ....!!”

PROPOSED SOLUTIONS

• order to eliminate borrowing, the interest rates set at Treasury bill auctions would have to be attractive. • Pakistan needs a leadership with competence, very strong nerves, clear understanding of the issues and psyche of the other side of the table, ability to negotiate with the super powers and come out with a most suitable package.

Thank You for your patience