How PAKISTAN committed SUICIDE with its ECONOMY ? : Pakistani Economic Crisis case study thumbnail

How PAKISTAN committed SUICIDE with its ECONOMY ? : Pakistani Economic Crisis case study

foreign is declared to have been elected as the prime minister of the islamic republic of pakistan hi everybody pakistan is facing one of the worst economic crisis in its history and while most people and journalists.

Are blaming imran khan for this condition what we do not realize is that pakistan's downfall has been happening since 70 long years in fact pakistan has been consistently facing economic crisis ever since its partition from india and in the past 30 years itself the imf alone has bailed it out for 13 times and just like sri lanka the pakistan.

Economic crisis has got some very very important lessons for us the citizens of india so in this episode today we are putting out the simplest possible explanation as to what exactly went wrong with pakistan how did the leaders of pakistan make some terrible decisions that have ruined the country and most importantly as indians what are the.

Lessons that we need to learn from pakistan so that we never ever let india face anything like this this video is brought to you by hyrek but more on this at the end of the video the first and most obvious reason for pakistan's failure is political instability long story short not a single prime minister in pakistan has.

Completed his or her term the country has been swinging between democratic and military rule and during the democratic rule also every single leader who comes up first tries to rectify the mistakes committed by the previous leader and by the time they start acting on their policies they are overthrown by another entity for example in 1978 general zia.

Took over the pakistani government with a military coup and as soon as he came to power he banned the unions censored the media and took up very heavy loans from different entities all across the world but after he died benazir bhutto took over and by the time she reversed the ban on unions and gave freedom of press she was overthrown by nawaz sharif.

And this has been happening since 70 long years and when this kind of political instability exists there are three major drawbacks at kicking for any country number one even if you've got valuable assets like labor and skilled workforce foreign companies will not set up their units in your country why because if a.

Company sets up a manufacturing unit in your country the existing democratic government might levy a 10 person tax but tomorrow suddenly if there is a military rule the dictator might impose a 50 tax or even change the economic policy itself this would make business extremely unviable because of which foreign companies will not bother to.

Come into such countries secondly since every leader who comes in knows that he or she could be overthrown their sole focus has only been on power struggle rather than actual development in this case if you see more or less every freaking leader of pakistan did something or the other to attack india or to bash india and this is because.

They thought that they could actually unite the pakistanis with the anti-india sentiments as a result we saw not just verbal bashing but also bloody wars and killings of innocent people both in india and pakistan and lastly because of both these problems the economics of pakistan took a massive hit which again needed loans to recover but since there.

Was very less scope for income they needed more loans to recover from their existing loans this is the first reason for pakistan's past present and future economic crisis that we're about to witness in the next 10 years by the way this is in addition to the four super costly wars that pakistan has.

Fought against india and this brings me to the second reason and that is something that is even bigger a problem for pakistan's crisis and that is pakistan's war brokering business to understand this you have to understand how terror groups actually function now this might sound a little.

Weird to you guys but terror groups actually work like labor outsourcing companies or you could even call them the freelancers of the international politics now let's try to understand this using an analogy you see in the u.s there are these huge companies like microsoft google and uber that build software products now amongst many of.

These companies there are departments like customer support and software services that often require a huge amount of workforce so for this work instead of setting up an in-house team they outsource the department to an indian company like tcs and wipro for software services and for support we've got the international call centers now.

The question is why do they exactly do that well that is because if they hire an american in america they have to pay her ten thousand dollars a month whereas they only have to pay one thousand dollars to an indian engineer working from india so they save a ton of cost secondly if they hire in-house employees they have to give them health insurance.

Rent or buy an office space to accommodate these employees then set up a management team to manage the staff and then pay for the employee perks that cost the company lots of time money and resources whereas if they outsource it to a company like tcs tcs will take complete responsibility of the project tcs will.

Hire and fire employees rent the office and manage the office staff and overall it will do the entire operation such that the projects could be completed on time and this is being done without passing on the worries to the american company this way the risk of human resource management is actually transferred to.

Tcs at 110 the fee of an american employee and lastly if an american company hires 2 000 employees it cannot suddenly lay them all off if they do not perform well because it will be a black spot on the reputation of the company and on top of that the company also has to pay these employees 6 to 12 months of salary as.

Severance package whereas if it is a third party like tcs the american company can directly fire tcs and hire another company to do the job better so to put that straight the american companies have transferred the risk and pain to the indian companies in exchange of revenue and business.

And if you look closely this is very very similar to how terror organizations actually function with countries for example in 1979 the soviet union had invaded afghanistan and the soviet afghan war was going on from 1979 to 1989. so guess what the united states obviously wanted to enter afghanistan to oppose the soviets but the catch we hear.

Was that if the american army deployed its own soldiers it would be very costly and very risky why because firstly the united states is accountable for every single soldier's life lost plus they have to pay their salaries they have to pay for food and every other expense including the pensions secondly if the american army.

Is deployed they have to build cutting edge defense township and barricades to protect the life of these soldiers and lastly once the american army enters the battlefield it will be officially known that america is being involved in the matters of other countries so if something terrible happens which it kind.

Of always does it would be a black spot on the reputation of america so guess what instead of sending their army to fight just like american companies outsource their software services to companies like tcs and vipro the american government outsources the military project to a third party which provides.

Human resource to execute the exact same actions at dirt cheap cost these parties are none other than militant groups rebels terror groups or whatever the media calls them these groups have their own agendas and they use the supplies of these countries to fulfill them in this case the entity that america outsourced the work to were.

Mujahideen fighters and just like there are training centers that train the candidates in certain specific skill sets to serve the clients pakistan became the training ground for these mujadin fighters to help them fight the soviets in afghanistan on top of that pakistan would also provide the land route for the supply shipments that.

Used to arrive from the united states and then it used to go to afghanistan and when this arrangement was made it gave the united states three superb advantages number one no matter how many people die from the mujahideen groups the us government does not have to answer to anyone number two instead of paying.

Hefty salaries to the american army soldiers they just have to provide guns ammunitions and a bit more money to train the mujahideen men and lastly just like an american company can fire a software service company and go to another one without worries america can just cut off the funding to these groups and go to another group to execute their.

Task and when this kind of arrangement is made america is able to execute its task at far lesser risk and far lesser cost and secondly pakistan makes money regardless for actually giving permission and access to the united states and guess what after the afghan soviet war ended the mujahideen fighters are the ones that eventually got.

Together and went on to form another group called the taliban in 1994. fun fact is that pakistan trained not just taliban but al-qaeda laskar taiba jaishay mumba then a lot more groups to cause chaos for the soviet union in the middle east kashmir and even punjab and it's not me who's saying this but purvey is mushroof the military general who.

Turned president of pakistan himself who has said this on record take a look at now just to give you an idea about how exactly does pakistan make money from all of this according to the center of strategic and international studies since 9 11 attack in 2001 pakistan has.

Been the beneficiary of something called the u.s coalition support fund this fund is used to reimburse pakistan for the u.s military use of infrastructure like ports railways roads and airspace and this is being done so that the united states can prosecute the war in afghanistan and other counter-terrorism operations around this space this csf.

For pakistan has been as high as 1.2 billion dollars per year and close to 2018 it was 900 million dollars per year furthermore 335 million dollars was given by the united states for humanitarian assistance this is how pakistan turned someone else's war into its own business and this is where the twist came in as.

We all saw taliban and al-qaeda became more powerful than they thought many other terror groups also started smuggling drugs in and out of pakistan militancy in pakistan increased and soon enough pakistan itself started to get affected because of these groups and this did not just tarnish their global image and made them look like a.

Terrorist nation but also started repelling foreign direct investments and more importantly it also started eroding into the existing industries a classy example of the same is the cricketing industry the sri lankan team bus was on its way to the gadhafi stadium when they were ambushed by.

Masked terrorists the sri lankan players were airlifted out of the qadhafi stadium which had become their temporary refuge other sides have cancelled pakistan tours over security concerns this the biggest blow yet to the country's number one sport in 2009 a bunch of gunmen attacked the sri lankan players who were touring.

Pakistan and as soon as this happened the cricketing industry of pakistan collapsed why because icc stripped them off the permission to host the 2011 world cup all countries agreed to not play in pakistan and from there on no international tournaments and hardly any international match has been held in pakistan.

Similarly the tourism industry of pakistan collapsed foreign investment started fading away and many other sectors drastically got affected so by the time imran khan and nawaz sharif came into power in 2013 and 2018 pakistan was already very tight on finances so guess what here's where our dear.

Friend shows up and just like it did for sri lanka it starts offering over generous loans for pakistan and specifically for this port called the guard put now this port is very very important for pakistan because karachi and carson ports are operating at near full capacity and they've got very less room.

For expansion but gwardhar is set to handle one million tons of cargo annually with a significant industrial oil and transportation infrastructure now just like sri lanka since pakistan did not have the finances to build its own port china offered an over generous loan for the gwadar put and as usual china is doing this not to help pakistan.

But to actually take over the assets using its debt trap strategy and as you know from the sri lanka episode how does a detroit work step number one china extends an over generous loan to an economically weaker nation step number two is conditions wherein china charges heavy interest and asks them to play back in 10 to 15 years as compared to.

The global standards of 28 to 30 years of payback span and lastly the entire construction would be done by a chinese company with chinese workers by which the money actually flows back to china but on paper the weak country was a huge debt to china along with interest and then comes step 3. since the loan.

And interest is too much for the weak countries to pay back china takes over the asset and uses it for its own purposes in this case pakistan owes china not one not two but 24.7 billion dollars in debt to china and these loans are said to have an exorbitant interest rate of 4.1 percent as compared to global standards of just one to two.

Percent and they built not just quarter port but 26 more projects in pakistan including solar projects rail projects highways hydro projects ports and even fiber optic cables running from pakistan to china and by the way china has already taken over the golder port from pakistan on a 40-year lease but what blew my mind.

Is that in spite of the finances being in such terrible state imran khan was still rolling out insane subsidies that were bleeding the coffers of the nation but the question over here is what the hell does china get from all of these well that's where the episode 3 of the series comes in but for now let's come back to pakistan because of these bad.

Loans and investments pakistan's external debt other than china amounts to 65 billion dollars this is how because of an extremely unstable garment by involving itself into the dirty business of war brokering by getting into the jaws of a cunning dragon and with reckless subsidies during an existing cash crunch.

Pakistan is in such a pathetic state that it does not have a good reputation at the international level it is not at all attractive for foreign companies or investors and more importantly it is under so much debt that imf itself is doubtful of bailing it out as a result pakistan is facing one of the worst economic crisis in its.

History and this brings me to the most important part of the episode and that are the lessons that we need to learn from pakistan's failure before we move on i want to thank our partners hyrek for supporting our content people's startup economy is booming in india and now since it's the appraisal season you all must be eagerly waiting for your.

Hikes and increments right but you know what as much as these appraisals are important it is equally important to understand that a great work environment is very valued and appreciated a place where you must have the liberty to make decisions and more importantly you should have a work life balance at the same time you must also get enough.

Opportunities to showcase your skills because after all that is how you're going to experience career growth and i personally feel that it's way more important to focus on your career hike instead of just salary hike but if all of these things are missing in your current job you can switch to a better job using the hirect app hirect is.

India's first direct hiring app wherein you can directly chat with the startup founders and ceos without any middlemen without any hr agencies or consultants all you need to do is just click the special link in the description download the app and this financial year as they say at high rate career hike moving on the first lesson we need to.

Learn from pakistan is that no matter how much political rivalry exists between political parties inside the country the ultimate focus of the rivalry must always be towards the development of the nation and not just about eliminating the opposition in this case we saw that while political parties and military entities were busy.

Overthrowing each other the economics of the country went for a toss so always keep an eye on the political parties so that they don't keep reversing the good things that the previous party has done because if that happens it's only going to lead to destructive development and this applies to everything from laws to tax regulations to even infrastructure.

Projects lesson number two in geopolitics your allies are never your friends so choose to work for each of them very very carefully because it wouldn't take two seconds for them to abandon you and go against you in this case pakistan unnecessarily got under the proxy war in afghanistan and today while the u.s army has gone back home it.

Has caused an irreversible damage to the reputation of pakistan at the global level and lastly always be careful with chinese products that's all for my saturday today guys if you learned something available please make sure to the like button or to make youtube happy and for more such insightful business and political case studies please.

Subscribe to our channel thank you so much for watching i will see you in the next one bye bye and don't forget to download the highlight app from the link in the description you

Leave a Comment

Your email address will not be published.