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   owais
Tuesday, October 28, 2008 01:20 PM 
Reply: >
what are the consequences of a country defaulting?
please share your knowledge or provide a link so we can get information.
Many Thanks
ali11 replied on Tuesday, October 28, 2008 02:51 PM 

which country is defaulting ?????
aa replied on Tuesday, October 28, 2008 03:08 PM 

many
Jameel replied on Tuesday, October 28, 2008 04:23 PM 

Not much you think of but it will be very shameful, The possible results will be Pakistan Rating will be very Low, No commercial Org will lend Money, Most of things like oil is Bought on short Credit Like "ountry's Credit card" Then People will ask for cash money,
The manuveribility of Country will be lost. Rupee might devalue further, till level that people start asking Dollar for Commodities or dealing even inside country, poverity will further increase.
Mostly the lender themselves dont let you default they defer the Payments Taking into account bad economic conditions.
In Cold war era more than 80% of loans used to be weaved off, just to earn political favor, So Butto and Zia did no wrong taking such Loans which were really "Aids" in that time, But now single super power is using these Loans as a weapon.
Ahmed replied on Tuesday, October 28, 2008 04:33 PM 

You will be taxed heavily and will see no infrastructure development. Prices of utilities will be increased unjustifically or they will be cut off forcing you to buy it from alternate sources.
There will be no merit in any sort fo bussiness and all decsions will br taken without notice of general public.
Contracts will be awarded to lenders.
People will be forced to jobs on cheap wages and rupee may become worth paper.
I think we cannot be more defaulted then now.
limo replied on Tuesday, October 28, 2008 05:35 PM 

This board is often filled with a lot of healthy dicussion pertaining to different topics but one thing i feel is never considered, that this board is not only viewed by intellects but also by individuals who have got little to average knowledge.I also come from the same class and want to highlight the difficulties faced by such individuals.Not to talk about this board only but even if we see in and around us, we will find plenty who may not be knowing exactly what is currency devaluation and why it is done, what does inflation mean, how a country gets defaulter and consequences, what exactly are FER and how they go down, what is the balance of trade, what is a rental yield, how to determine a property is undervalued or overvalued and how one can know about it, how come dollar sometimes becomes stronger and sometimes weaker and what makes it strong and what makes it weak, what is liquidity, how oil prices affect our economy,what is trade deficit,what is tax refund,what are open and close files or affidavits,what is stock crash, and waht is a real estate boom,what is CRR that state bank recently reduced and why, and so forth.Would'nt it be nice if respectable intellects could elaborate these terms sometime.It would not only promote the arwareness, but also help in widening the circle of the participants in these debates.
Pardesi, Jeddah replied on Wednesday, October 29, 2008 07:03 AM 

Beside financial implications, nation is exposed to high social disturbance & therefore it has deep-rooted multidimentional impact.

Lets understand the situation hypothetically: if a family having average earnings till 2007 (8-10 cror Pakistanis fall in this category) getting squeezed to maintain itself (food & energy crisis already at full swing). And now source of income is also under serious threat; what would be their behavior??? mental approach??? & especially, without health & educational support.

It is my humble request: Beg for Allah's Mercy & follow his commands:
" Say: "O my Servants who have transgressed against their souls! Despair not of the Mercy of Allah. For Allah forgives all sins: for He is Oft-Forgiving, Most Merciful." Surah Zumr, Aya 53.

Insha-Allah the situation will graviate to a better position if as a nation we follow quaid's guidance individually & collectively: Unity - Faith - Discipline

Dear Limo
Pakistanis in general, are far better than many nations as people understand the impact of economic terms with/or without using the correct label. Understanding comes when one gets INVOLVED in dialogue; ignorance is no excuse.
limo replied on Wednesday, October 29, 2008 07:36 AM 

But ignorance is a bliss sometimes, is'nt it!
Slam replied on Wednesday, October 29, 2008 08:09 AM 

Dear Limo, As you have also acknowledged in your first post that every one is not economics specialist and neither every one can be guru.
It is very much expected that we will never be allowed to default because it is not in favor of lenders who are regularly receiving debt on their old loans.
But even street hawker can tell that we are in much worse economic state as of an year agao.
We as a nation are being kept hostage, we are raising slaves in shape of our children. Overseas Pakistanis are ought to keep coming back and send money back home for their own personal reasons.
As said by Perdesi, we are going through mental torture when next morning we found out that we lost half of our salaries because some tycoon send few billions $ abroad and in the process he spent few billion from state exchequer to shut any critical mouth (by hook or by crook).
Every day we face new taxes and surcharges, without accountability!
It is the responsibility of the govt. (for the people by the people) to tell us where are they consuming our taxes? Where as nothing can be seen on the ground all running infrastructure projects had been halted and no new projects are to be seen.
Industrialist has to buy dollars to buy dollars from open market to buy spares for his machines! This is hurting hte economy even more.
2 year ago we were proud people from proud nation and today we are the most humiliated nation in the entire world. Foreign nations don't even like to have even sports relation with us, in some years down the line we will be a B team.
Western airlines have cease to operate in Pakistan. Arab airlines are charging twice as the charge to go to India/Bangladesh/Srilanka!
Every month our credit rating is revised. Our currency is in free fall.
Hello....wake up it cannot go any worst. We are not a sovereign nation any more. Our economics is worst than Afghanistan.
arsu replied on Wednesday, October 29, 2008 03:01 PM 

Pardesi bi would you spare a moment to define this ignorance.If your a/c starts malfunctioning, you rush only to find an a/c technician because you are totally clueless about the problem your a/c is facing).Why? Because you know deep down that its a specialized field and only a good a/c technician is supposed to have good knowledge about it and can fix the problem.So what one should call you here, ignorant.Answer is no, because its a specialized field and ordinary person may not be having enough knowledge of it.I think you got my point.
sahmed157 replied on Wednesday, October 29, 2008 08:08 PM 

There is an article under news tab on this site by Javed Choudry, its title is "Makes no difference to me". Its worth reading. Article is posted by Assad.
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