Global economies have become highly integrated. We had experienced this during the 2008 financial recession. The epicentre of the crisis then was the US housing market. As the housing market crashed, all financial institutions that had heavily invested in it, either through direct loans or buying mortgage-backed securities, felt an extreme liquidity crunch. The crisis […]
Pakistan’s IT remedy
The government of Pakistan is currently scrambling all in its power to see our economy through serious macroeconomic challenges. Such economic crises have become a recurrent feature of our economy. The present crisis is unfortunately a third of its kind during the last decade. The root cause of these successive crises can be traced to […]
State of the start-up ecosystem
Facebook has become a global business giant with a total equity of over $59 billion in just 13 years. The success of the company has shot its co-founder Mark Zukerberg to a net-worth of $74.2 billion making him the fifth richest man in the world. Facebook was once just a start-up business. But it is […]
Flawed borrowing strategy
In a bid to contain mounting challenges on the external sector front, the government of Pakistan has started increasing its international debt liabilities at an aggressive rate. According to the provisional statistics reported by the Economic Affairs Division, $796.8 million worth of new debt is added to the overall debt portfolio for budgetary support during […]
Whatever happened to the PSX?
The KSE-100 index breached through the psychological barrier of 40,000 points last Friday. The fall from the all-time high of 53,127 points in just over six months is bombastic in magnitude. What makes this development confusing is that Pakistan Stock Exchange (PSX) was christened Asia’s best performing stock market in 2016 with 46 per cent […]
Will 2nd phase of Pakistan-China FTA work?
It has become a common knowledge in policy and academic circles that Pakistan has failed to benefit from its Free Trade Agreement (FTA) with China. While trade volume between Pakistan and China has almost quadrupled since the FTA came into force in 2007, it has mostly favored the Chinese exporters. Pakistan’s trade balance with China […]
Lessons from the sugar industry crisis
The federal government and the representative body of sugar mills — Pakistan Sugar Mills Association (PSMA) — are currently at loggerheads. PSMA is seeking permission from the government to export surplus sugar from the country. When Prime Minister Shahid Khaqan Abbasi was briefed on the state of the sugar industry, he postponed the decision on […]
Economics of Panamagate verdict
Since the Supreme Court verdict on the Panamagate case, political environment in the country is highly charged. Both ruling and opposition parties are seen pulling political punches at each another. Meanwhile, the debate on the Panamagate verdict by the Supreme Court has been mostly concentrated on its political and legal implications.We are missing a crucial […]
The politics of the rupee
The exchange rate of any currency is supposed to be determined by the foreign exchange market. However, it has become a routine for the central banks to intervene in foreign exchange market to influence the exchange rate of a currency in order to obtain certain economic objectives. Notable examples include China and Russia. Both of […]
Budgeting for elections
One trillion rupees is the total amount allocated under the Public Sector Development Programme (PSDP) in the recently announced federal budget for 2017-18. PSDP fund is the government’s primary tool to provide for development projects and programmes. In other words, PSDP is the main instrument at the disposal of the government to woo voters before […]