Thread by @FahdSheikh3

*PAKISTAN SOVEREIGN DEBT* —
A THREAD 🧵:

This is an eye-opening depiction of how successive govt’s have mismanaged debt in #Pakistan.

85% of 🇵🇰’s tax revenues are now used to service debt.

Under the circumstances, #GOP & @PTIofficial have a few options that they can employ:

1) Ramp up tax revenue growth —

@NadraPak has a list of 3 million top spenders of #Pakistan. Now is the time to act & hold tax evaders accountable. @FBRSpokesperson, @shaukat_tarin, and NADRA, in coordination, need to start knocking on some doors.

tribune.com.pk/story/2308066/…

2) Stop the bleeding from Public Sector Enterprises (PSE’s) —

Prioritise the privatisation of entities that are bleeding the most. A presentation to this effect & why privatisation has become so critical for Pakistan’s economic security should be given by @ImranKhanPTI himself.

Senior members of Armed Forces, Judiciary, Opposition, & NAB should be invited in order to bring everyone on the same page. Once all are convinced, a transparent & public privatisation process should be run & loss-making PSE’s should be auctioned & sold.

brecorder.com/news/40131714

3) Circular debt to be tackled head-on, with urgency —

Electricity theft everywhere. I visited a desert palace in 🇵🇰 once & was shocked to see 2 dozen A/C’s on in all rooms. Upon inquiry, I was told “who cares, it’s not as if we have to pay the bill”.

tribune.com.pk/article/97347/…

4) Wasteful government expenditure to be identified & cut quickly —

Example: I once visited a Federal Employees Pension office in the capital & was surprised to see hundreds of employees in just one of the buildings. Paperwork & files were everywhere and computers were scarce.

In this day & age, when IBFT payments are in play, & digital banking is becoming the new normal thanks to @StateBank_Pak, why do you need thousands of govt. employees to process pension cheques? Even #FBR is pushing corporates to adopt digital payments.

fbr.gov.pk/corporate-taxp…

5) Reduce the cost of external & local debt as much as possible —

Can be done through renegotiation with lenders / creditors like in the case of successful #IPP negotiations carried out by @PTIofficial recently. Can also be done through implementation of out-of-the-box ideas.

Example: @StateBank_Pak has been successful in raising relatively low-cost debt through its RDA initiative, whereby $2.7 billion+ has been raised so far from overseas Pakistanis & resident 🇵🇰’s with declared foreign assets, at a blended cost of <= 4.5%.

dawn.com/news/1656468

6) #GOP & #MoF should also seriously look into debt restructuring — *not default but rescheduling* — prolonging the tenor of debt through negotiations with various multilateral & bilateral external & local lenders. We are still in a #Covid19 world. Uncertainty still in the air.

The country’s cashflows therefore require some serious breathing space so it can tackle the pandemic & recover economically.

When lenders are presented with a solid plan and genuine reasons as to why debt must be restructured, they often agree.

brookings.edu/blog/future-de…

7) Last but not least of the ideas that one can think of on a lazy Sunday evening, #GOP and #MoF assisted by @aminattock and @SMQureshiPTI should immediately explore some additional debt-for-nature relief initiatives as well.

Example: the country commits to an X quantum / value of green initiatives (such as biodiversity and nature restoration targets) and it results in certain external lenders writing off or reducing interest costs on the borrower’s debt to that extent.

climatechangenews.com/2021/04/16/pak…

A combination of these initiatives will provide much-needed breathing space to #Pakistan’s cashflows.

However, they would need to be accompanied by a continual focus on:

1) Increase in tax-to-GDP ratio
2) Govt. expenditure reduction (wasteful / replaceable expense ofcourse)

3) Export-oriented mindset & continuation of export-driven economic policy regardless of which party is in power — support to the export sector must be non-negotiable
4) Creating as many insurmountable hurdles as possible in the way of non-essential imports (until CAD improves)

@threadreaderapp compile plz. Gracias.