A global default, on the other hand, refers to a country’s failure to meet its financial obligations on a global scale. This type of default can have far-reaching consequences and can lead to a financial crisis not only for the defaulting country but also for other countries and financial institutions that are connected to it. Global defaults are generally considered to be more serious and more damaging than technical defaults.
Political Reasoning
Politics and the economy are not mutually exclusive. In your next ‘wtf’ move, PTI leadership has decided to jeopardize the IMF payments. With all the pain and destruction that is happening due to the floods, this was the last thing needed. A few of my PTI friends are not doing business, a lot many overseas are not doing usual remittances and many speculate dollar to bust to a whopping 300 rupees meaning they can manipulate demand and create fear of scarcity by holding dollars and putting their money in non-serviceable dollars.
Hard work, dedication, and sincere efforts can be rewarding. Some people may be working towards improving the economy, but negative perceptions, fueled by social media claims of Pakistan’s bankruptcy by the PTI party, can have a negative impact on both domestic and international sentiment towards the country. The economy is largely influenced by perceptions and sentiment.
Economic Reasoning
Fifty percent of Pakistan’s economy is undocumented meaning there would be no taxes on the books not kept. Also, in the documented economy, almost all the registered taxpayers keep two books. These are unchartered areas, unaccounted. State-owned enterprises (SOEs) in certain sectors incur significant losses annually and also hinder the competitiveness of our economy through opportunity costs. By privatizing these SOEs, we can decrease the role of the government, increase tax revenue, and stimulate employment and economic growth. Privatization is always against assets that are of value to the private equity holder and the garbage remains for the Government e.g. the private entities are always discussing Roosevelt Hotel property in New York when it comes to PIA but nobody wants to rectify the operational capabilities.
