World

India-Bangla trade ties
Asia, World

India-Bangla trade ties

Connectivity, industrial development and trade were the key themes in discussions over economic cooperation between Bangladesh and India. The Planning Commissions of both countries were at the forefront of negotiations to envision a new economic and industrial future. After 1971, Bangladesh set up a newly minted planning commission with economists trained from Cambridge and Harvard. The new commission sought to adapt best practices from both India and Pakistan. The Indian model was a research-centric commission, whereas the Pakistani model was a centralized commission overseen by the head of state. Diversifying exports The trade deficit with India was one of the areas identified by the Bangladesh Planning Commission for redressal. Professor Rehman Sobhan, who served in the first ...
That Sinking Feeling: Pakistan continues to struggle with a severe political unrest while still being engulfed in an economic catastrophe.
World

That Sinking Feeling: Pakistan continues to struggle with a severe political unrest while still being engulfed in an economic catastrophe.

The national and provincial governments are poised to have weak coalitions at the helm. These will struggle for credibility amidst PTI’s refrain of a stolen mandate, and may leave tough economic reforms on the backburner, thereby intensifying the existential crisis Pakistan finds itself in The outcome of recent elections has increased political uncertainties in Pakistan. The elections resulted in Independent candidates supporting Imran Khan winning 92 seats (Total number of Independents 101). This exceeded the tally of PML-N (79) and PPP (54) seats. No party secured a simple majority. A coalition government has been announced headed by Shehbaz Sharif. This includes PML(N), PPP, MQM, and smaller parties. While they would be able to muster a majority, it would be a weak coalition. Its le...
Industries Promising to Offer Superior Returns to Speculators in the Future
World

Industries Promising to Offer Superior Returns to Speculators in the Future

According to the Asian Development Bank, the Indian economy is expected to grow by approximately 8% in the next 5-6 years, endorsed by increasing public investment in infrastructure and a pickup in private sector investment. Investors, motivated by the results of their investments in the past fiscal year, are prepared to devote a significant gear percentage of their savings to capital instruments in the forthcoming years. They are also motivated to invest in the growing industries in India. Numerous experts speculate that the Indian Stock Market will also have progressed and expanded to the fifth largest in the world, accounting for the highest market capitalization. The market grows with various stepping elements supporting this expansion, such as government initiatives, foreign re...
China, World

China’s Economy in the Year of the Dragon: It’s a bleak place

At the end of January, a Hong Kong judge ordered the liquidation of the heavily-indebted Chinese real estate giant Evergrande. It was just the latest piece of bad news for China’s economy, after a year of disappointing growth, high youth unemployment, and various surveys and media reports that show a lack of confidence amongst China’s entrepreneurs and consumers. Some observers have been predicting an economic collapse in China for decades. Others have long predicted that China would be stuck in a middle-income trap or some other type of economic stagnation. Might some of these predictions come true this time? What does the Year of the Dragon have in store for consumers, companies, and markets? What should we look out for this year to understand both China’s real economy and its financ...
Can the IMF help Pakistan and how terrible is its financial crisis?
World

Can the IMF help Pakistan and how terrible is its financial crisis?

Negotiations on a new government in Pakistan have allayed immediate fears of instability in the nuclear-armed nation following inconclusive elections last week, but the risk of a full-scale economic crisis remains.A $3 billion programme from the International Monetary Fund (IMF) runs out next month and securing a new and much bigger one is widely seen as the priority for the new administration.WHO COULD THE IMF NEGOTIATE WITH?The largest party, the Pakistan Muslim League-Nawaz (PML-N), secured support on Tuesday from the second biggest, the Pakistan People's Party (PPP), and is trying to persuade it to form a majority coalition.The caretaker government in place since August is implementing the IMF loan programme which helped to avert a sovereign debt default when it was approved in July. ...
A think tank claims that while the collapse of Evergrande is not China’s “Lehman moment,” it does make economic recovery more difficult.
China, World

A think tank claims that while the collapse of Evergrande is not China’s “Lehman moment,” it does make economic recovery more difficult.

China's crumbling property sector, its stock market crash, and its gummed-up economy have drawn some comparisons to the 2008 crash in the US. A few weeks ago, the Chinese property giant Evergrande received a liquidation order from a Hong Kong court, forcing the sale of its assets to repay the company's $300 billion worth of debt. This has spurred on the question: is the Evergrande collapse China's "Lehman moment?" The answer, according to one think tank, is no. But it does pose an obstacle to an economic rebound. "Evergrande's bankruptcy is not China's Lehman moment; its downfall is unlikely to immediately trigger a contagion across the entirety of China's financial system," Zongyuan Zoe Liu, a Council of Foreign Relations expert, wrote on Tuesday. Back in 2008, Lehman Brot...
Sri Lanka is mired in unstable political and economic conditions.
Asia, World

Sri Lanka is mired in unstable political and economic conditions.

In 2023, Sri Lanka faced a complex interplay of economic and political challenges. Although fuel and food queues have disappeared, the dire impact of the economic crisis was inescapable. Sri Lanka’s economic outlook was initially grim, with a 3.1 per cent GDP contraction in the second quarter of 2023 and a projected 2 per cent shrinkage for the year. The first quarter saw an alarming 11.5 per cent contraction, highlighting the severity of the crisis. Despite a peak inflation rate of 70 per cent in September, it dropped to 3.4 per cent in November due to subdued demand, offering temporary relief for poorer households The World Bank later revised its forecasts, noting Sri Lanka’s progress in reducing inflation and benefits accruing from tourism revenue and currency appreciation. The B...
IMF cautions that Maldives faces a serious danger of foreign debt crisis.
World

IMF cautions that Maldives faces a serious danger of foreign debt crisis.

The Maldives is at a high risk of external and overall debt distress, the International Monetary Fund (IMF) warned on Wednesday but did not provide any details about the debt. It said the country's fiscal and external vulnerabilities have increased, calling for urgent policy adjustment. "Maldives remains at high risk of external and overall debt distress," said IMF staff teams in a report prepared after a visit to the country. The global financial institution said that without significant policy changes, the archipelago nation's overall fiscal deficits and public debt are projected to stay elevated. "Amid elevated fuel prices coupled with continued strong import demands, the current account deficit in 2024 is projected to remain large, albeit gradually narrowing over the medium term." ...
Pakistan’s Elections Are Conducted Amid Crisis
World

Pakistan’s Elections Are Conducted Amid Crisis

The highlights this week: Pakistan readies for elections that will follow the usual script, an Indian government spokesperson affirms the country’s engagement with the Taliban, and a Sri Lankan cabinet minister resigns amid a health care scandal. Pakistan’s Elections Will Follow the Usual ScriptA top Pakistani political party is subjected to a harsh crackdown ahead of national elections. Its members are harassed, abducted, and arrested. Media outlets are pressured not to cover any of the party’s activities, and critics of this repression are silenced. The party’s top leader is given a long jail sentence on the eve of the polls. This was the situation for the Pakistan Muslim League-Nawaz (PML-N) in 2018. Today, the PML-N is contesting Pakistan’s Feb. 8 elections with no problems, and...
Pakistan’s troubled economy is being turned around by old dreamers
World

Pakistan’s troubled economy is being turned around by old dreamers

Pakistani voters head to the polls on Thursday amid a deep-seated economic crisis. Inflation is hovering at 30 percent, close to 40 percent of people live below the poverty line, and the debt-to-gross domestic product (GDP) ratio has climbed to 72 percent. Pakistan’s new government will have to contend with these and an ageing public infrastructure. “We have power outages every day for two hours,” says Muhammad Waqas, a janitor from Islamabad. “In the summer, when it’s hot, you sit idly and suffer.” As with other state-owned firms, the inability of successive governments to invest in Pakistan’s National Transmission and Despatch Company has left it prone to failure. More recently, the COVID-19 pandemic and energy supply challenges dampened Pakistan’s growth prospects and constrai...