International Financial Management – Balance of PaymentInternational Financial ManagementBalance of Payments:The balance of payments is the record of all international trade and financial transactions made by a countrys residents.The balance of payments has three components. They are the current account, the financial account, and the capital account. The current account measures international trade, net income on investments, and direct payments. The financial account describes the change in international ownership of assets. The capital account includes any other financial transactions that dont affect the nations economic output.Balance of Payments Deficit:A balance of payments deficit means the country imports more goods, services and capital than it exports. It must borrow from other countries to pay for its imports.Pakistan Balance of payment:Pakistans payments problems have been chronic since the 1970s, with the cost of oil imports primarily responsible for the trade imbalance. The growth of exports and of remittances from Pakistanis working abroad (mostly in the Middle East) helped Pakistan to keep the payments deficit in check.
Pakistan’s current account remains positive two times in history i.e. in 1983 and 2001-2003. We can discuss the reason for this simultaneously:In 1983:The growth of exports and of remittances from Pakistanis working abroad (mostly in the Middle East) helped Pakistan to keep the payments deficit in check. But however, due to peak in oil prices from 1982/83, Pakistan’s current account again went into deficit.In 2001-2003:Surge in exports from 2000/01 was due to primary commodities such as rice, raw cotton, and fish, and other manufactures such as leather, carpets, sporting goods, and surgical instruments. And exceptional increase in remittances from overseas Pakistanis result in surplus.
EUR 2010-1883-BJP-PWD-Pakistan-1
Pakistan’s current account is positive two times in history i.e. in 1983 and 2001-2003. I don’t expect any “stagnation” in the current account since 2003-1. Instead of a slowdown, this is “an improvement that makes sense only in the context of current account problems for a country with a poor national security system, in need of foreign aid, in which people can be excluded and people can be excluded from public services”. As for the fact that the current account is “not positive two times since 1983, which could mean that it is still not as strong as it should be”.
I have not seen any recent economic or political indicators which tell me that Pakistanis are still in debt to the States. If they are indeed poor, what is going on? How did they manage to come to this point? Let’s take a look.
Pakistan’s current account has deteriorated, in the past couple of decades, but now it is just over .  In 1999-2002, the balance of payments for exports to Pakistan started falling, and then stabilised in 2002-2003. This did not have anything to do with a currency devaluation:In 1997-1998, this happened because that month India introduced devaluation of ₹ 50, as compared to 1 rupee and 1.5 rupee in 2001-2003. I would add that this devaluation did not affect the balance of payments; in fact, it strengthened the balance of payments and helped Pakistan to stay in the international system. Also, as a result, with devaluation not a single country in the world has ever been able to get rich from the global trade of Pakistani raw materials:
Indian rupees continue to be used for Pakistani goods and services
However, as a consequence of our high import prices on a global basis, India is now the world’s largest exporting country. This represents a real and significant threat that India must face as soon as possible. It threatens us all. The fact that this country continues to be a major power player when there is so much debt is a clear indication that the government is willing to engage in ‘dirty tricks’ in order to obtain favourable financial conditions to purchase new minerals and new machinery.
So, it is very hard for us to
EUR 2010-1883-BJP-PWD-Pakistan-1
Pakistan’s current account is positive two times in history i.e. in 1983 and 2001-2003. I don’t expect any “stagnation” in the current account since 2003-1. Instead of a slowdown, this is “an improvement that makes sense only in the context of current account problems for a country with a poor national security system, in need of foreign aid, in which people can be excluded and people can be excluded from public services”. As for the fact that the current account is “not positive two times since 1983, which could mean that it is still not as strong as it should be”.
I have not seen any recent economic or political indicators which tell me that Pakistanis are still in debt to the States. If they are indeed poor, what is going on? How did they manage to come to this point? Let’s take a look.
Pakistan’s current account has deteriorated, in the past couple of decades, but now it is just over .  In 1999-2002, the balance of payments for exports to Pakistan started falling, and then stabilised in 2002-2003. This did not have anything to do with a currency devaluation:In 1997-1998, this happened because that month India introduced devaluation of ₹ 50, as compared to 1 rupee and 1.5 rupee in 2001-2003. I would add that this devaluation did not affect the balance of payments; in fact, it strengthened the balance of payments and helped Pakistan to stay in the international system. Also, as a result, with devaluation not a single country in the world has ever been able to get rich from the global trade of Pakistani raw materials:Indian rupees continue to be used for Pakistani goods and services
However, as a consequence of our high import prices on a global basis, India is now the world’s largest exporting country. This represents a real and significant threat that India must face as soon as possible. It threatens us all. The fact that this country continues to be a major power player when there is so much debt is a clear indication that the government is willing to engage in ‘dirty tricks’ in order to obtain favourable financial conditions to purchase new minerals and new machinery.
So, it is very hard for us to