Sep 1 - 7, 2008

Moody's world fame recognized Investor Service warned that Pakistan is in danger of facing a further downgrade of its "B2" sovereign credit rating due to its rapid depletion of foreign exchange reserves. It has forecast that Pakistan's credit fundamental will deteriorate further if the current political unrest persists even after the resignation of President Pervez Musharraf. It stated that the resignation of President Musharraf offered a best opportunity for the coalition government to bring a stable relationship between the executive, legislative and judiciary. According to Moody's that if there is both economic and political stability in the country then the chances of Taliban influence and militancy will be minimized.

Moody's emphasized the need of rapid structural reforms to bring the confidence of foreigners to invest in Pakistan. It says if the government is unable to bring strong effective policies for the uplift of the economic development of the country there are chances that foreign investment will not be attracted. Thus there will be further deterioration in the balance of payment and difficulties will be involved in reducing the fiscal deficit.

Moody concludes that "Pakistan's prospect for timely external assistance may be delayed or diminished, if in coming weeks or months, deterioration in credit fundamental becoming irreversible, the negative reaction may follow". It must be remembered that in May 2008 Moody's downgraded country's sovereign credit to B2 from B1.

In view of the above warning by Moody's the finance Minister Syed Naveed Qamar stated that Pakistan is likely to receive over $ 3.5 billion inflows by September 2008. This will somehow support the weakening rupee to regain its value and sustain the declining foreign exchange reserves. Government may receive one billion dollar from World Bank and the Asian Development Bank besides foreign remittances of 2.5 billion dollar. Besides this, the Minister has said that the government has decided to slash federal development spending (PSDP) for the current financial year 2008-09 by 18 percent or Rs.100 billion as part of its plan to bring down the fiscal deficit to 4.2 percent. This half hearted measure may not satisfy Moody to maintain even the same level of sovereign credit rating.

In order to have above sovereign credit rating from Moody, Pakistan will have to take stringent economic measures. It will have to enhance its resources for improving its macroeconomic indicators and strengthen its foreign exchange reserves to improve the balance of payment and to improve debt servicing. Further, it will have to rejuvenate its programme of privatization of various units for inviting foreign investment there. Moreover it will have to take measures to curb unnecessary expenditure to reduce the budget deficit to 4.2 per cent. At the same it will have to curb an unabated terrorism emanating from tribal areas and insurgency in Balochistan.

Recently, the IMF Director of Middle East and Central Asia, Mr. Mohsin Khan said that if Pakistan wants to qualify for IMF credit facility it must take vigorous steps to cut its expenditure and remove subsidies on oil and other products. This vital step for IMF credit facility for Pakistan though very sour will have to be taken in order to save the country from critical economic crisis. This will also save the country from any further downward sovereign credit rating by Moody.

Removal of subsidies from oil and other products will be a hard task for the government as it had no other means to substantiate its resources. Besides being an elected political government it will face massive criticism from the low income earners who have below subsistence level of income. In any case, government will have to swallow this bitter pill sooner or later. If microscopic wealthy and some black money earners pay their due share of tax then there is no fear of the country becoming economically unstable. Let us now not squabble over the reinstatement of judges. If we do not take prompt measure to strengthen the economy people will naturally blame for their woes on the present government. Soaring prices, unemployment, rupee depreciation and the flight of capital has made the life unbearable for the common man. It is now the proper time to take seriously the warning of the Moody and take promptly the remedial measures mentioned above to improve our sovereign credit rating.


There was a blind girl who hated herself because she was blind. She hated everyone, except her loving boyfriend. He was always there for her. She told her boyfriend, 'If I could only see the world, I will marry you.'

One day, someone donated a pair of eyes to her. when the bandages came off, she was able to see everything, including her boyfriend.

He asked her, 'Now that you can see the world, will you marry me?' The girl looked at her boyfriend and saw that he was blind. the sight of his closed eyelids shocked her. She hadn't expected that. The thought of looking at them the rest of her life led her to refuse to marry him.

Her boyfriend left in tears and days later wrote a note to her saying: 'Take good care of your eyes, my dear, for before they were yours, they were mine.'

This is how the human brain often world when our status changes.

Only a very few remember what life was like before, and who was always by their side in the most painful situation.

Life Is a Gift

Today before you say an unkind word - Think of someone who can't speak.

Before you complain about the taste of your food - Think of someone who has nothing to eat.

Before you complain about your husband of wife. Think of someone who's crying out to GOD for a companion.

Today before you complain about life - Think of someone who went too early to heaven.

Before whining about the distance you drive Think of someone who walks the same distance with their feet.

And When

you are tired and complain about your job - Think of the unemployed, the disabled, and those who wish they had your job.

And when depressing thoughts seem to get you down - Put a smile on your face and think: you're alive and still around.