What Pakistan’s Bomb Could Not Buy

Re: # 80 zeemax on May 29, 2006 11:48pm PT

{Private Equity investment is nothing more than organised theft.}

Understood. Now the Arabs are out to steal Pakistan`s assets on the cheap. Yet they are shunning Pakistani workers at the same time. Why are we still concerned about Starbucks latte?

And the streets of Pakistan is full of anti-western slogans. Why?

{So don`t jump up and down too much about this Abraaj Capital stuff. These are just more thieves of the private rich man`s banker Shaukat Aziz`s club looking for quick profits. This kind of financial engineering (aka day-light robbery) doesn`t help the country at all. }

Agreed. No jumping around here.

Did you notice somehow this topic is conspicuously absent from discussion? Is it that most interactors are not enlightened enough? Or do they just not care?

Respectfully submitted,

Re: # 74 by bbabu on May 29, 2006 9:04pm PT

Agreed to most of your post, except

{The problem is not the 43% debt per se. It is what was done with all that money.
I would not mind running a 100% debt if it meant having great universities and great physical infrastructure. }

The main issue here is to find out from where is Pakistan borrowing? 43% of foreign debt is a too much. Are we getting loans from the rich Arab states? It must be stated at what % interest, etc.

Thank you for the post.

Respectfully submitted,

``nuclear weapons and missile development is today second-rate science``
I wonder why the practitioners of ``first-rate science`` in Pakistani academics are increasingly attracted towards the politics of nuclear weapons. Could they please explain how much Pakistan has benefitted from the practice of their first-rate science? As the history shows, the gradual but increasing drift towards politics of these ``first-rate-science practitioners`` resulted in their inability to establish and successfully run scientific institutions, the task for which they were hired and appointed in Pakistan. The statement that the ``Bomb`` is only a product of, and giving rise to, the second-rate science may seem fine and digestable especially if it comes from not from the self-proclaimed practitioner of ``high-science`` who have their own demonstratable history of failures in terms of linking their work to their country and its economics and failing to regenerate themselves so as to be of some benefit to the Pakistani academic life.

Re: # 80: That is one aspect of private equity. This is also how a lot of companies make acquisitions, restructure their financials etc.. Debt is also an asset. Cash flow financing is one aspect of doing a PE transaction. 99% of all PE deals are still straight equity heavy investments. Entrepreneurs use debt to minimize dilution all the time, why don;t you rail against that? You have issues with LBO`s, then so be it. No investor would put money in a company and laden it with debt only to see it struggle.

Zeemax sahib,

What is important is that when national assets are offered for sale, all investors, whether domestic or foreign should be given the same transparent terms and certainly no preference should be given to foreign investors. If after that, foreign investors still outbid domestic investors either becuase they have more money or becuase they are better able to unlock value, so be it.

Regards

Zeemax sahib, you are circumscribed by the ``nation-state`` mentality. We need a more global approach to face the forces of tyranny and a good start would be to guage the winds that are blowing towards those forces and then fart in that direction rather than detonate a nuclear bomb and prove nothing in the process. The US is indifferent to any use of nuclear weapons in that region, while to me even the thought of any side using it, or using it for any kind of ``diplomacy`` where the change of its use is there amounts to barbarism and inhumanity and complete moral depravity.

#85 by tahmed32

So Pakistan got it`s money`s worth from the nukes.

Is that why Pakis went wet in their pants when the Indian Army walked to the borders in 2001?

India got to call itself a ``nuclear power`` but also painted itself into a corner militarily in the region despite having the second largest military in the world.

If a Pakistan can walk into Indian territory in 1999 despite knowing fully well that Indian nukes could obliterate it, what makes you think India can`t do the same? So there.

#85

It is precisely for this reason that these two gentlemen have been forgotten in India. Look, what a pathetic state BJP is in today.

Its the time Pakistanis also forget them.

sanjay #84 I dont know about the ``fear psychosis`` that we Pakistanis suffer from, but 1998 certainly changed the sound of music played by indian politicians from Advani`s rendition of the 1814 Overture (the one with cannon booming) to Vajpayee`s gentle hymn of Silent Night (the one that talks of all being calm and peaceful).

So Pakistan got it`s money`s worth from the nukes. India got to call itself a ``nuclear power`` but also painted itself into a corner militarily in the region despite having the second largest military in the world.

So, we applaud the brilliant performance of indian politicians. Please ask Advani to come and take a bow. The buddha is indeed smiling. :-)

#82


Indian leadership continues with beligerent statements and Pakistan continues with nuclear ambiguity. Indian public pressures the BJP Government to come through with their threats to resolve Kashmir once and for all by attacking POK. Pakistan invites the Indian attack and puts the bomb on the table. US/UN rushes in and some red faces in India. No sanctions on Pakistan. No freezing of accounts. Back to the negotaiting table with a bomb PLUS a moral high ground.

I think Pakistanis have to get over this fear-psychosis that one day India will attack and subjugate them. India will not enter into war with Pakistan unless badly provoked by Pakistan itself. The reason is (considering a hypothical situation that India attacks and does subjugate Pakistan) there no tangible gains which India will get out of it. Many studies here have indicated that per day cost of a full-scale war would be Rs.300 Crore per day and India would still require 30-45 days to defeat Pakistan(assuming no foreign help comes in the way of Pakistan). That would put the cost of war at around 3 Billion Dollars atleast. Now ,how would India recover this loss??

The situation in Bangla Desh was different. There was also the question of saving oil-rich North-east from China. The geography of BD, India and Northeast is such that the NE is connected to India through a very thin corridor a few miles wide. In a situation when China attacks North-east and if Pakistan occupies the thin corridor and holds on to it for a few days, India would have lost its Northeast.

So dont waste your time/energy/precious resources in putting your acts assuming India ,one day will attack and annihilate Pakistan.

Of course, provided you dont have a guilty conciousness inside you.

#81 by majumdar

...If someone is intelligent enough to see value where other investors dont and benefit from such insight, he deserves to make the money...

No argument about that. But only if that `someone` was from within the country so that whatever value was restored, it would remain within the country. When foreign funds play the private equity game, they repatriate that value abroad. That`s where government policy comes in. The present policy has placed the country on a firesale.

Rgds

#31 by masadi

Masadi,

Thanks for contributing to the question ... HOW `not` detonating would have helped Pakistan !.. It was indeed a serious question, and not a rhetorical one.

Ok. So in your view Pakistan should have held back, but till when? Indeed that is exactly what the global forces you mention pressured Pakistan to do. Very serious consideration and debate went on within the political government of the time as to the response during those two weeks. I think what tilted the scale in favor of detonating was the body language of Advani/Vajpayi which was telecast widely in Pakistan and the public started clamoring for a tit-for-tat. It was quite obvious that the Indian administration did not in fact believe that Pakistan actually had a working bomb in its closet.

Was detonation really necessary? I think it wasn`t necessary at that particular time and did more harm than good. BUT, it was ultimately necessary. Pakistan did have to put the bomb on the table `sometime` for equal negotiating status.

When would have been that `sometime` the optimum time? Consider the following scenario:

Indian leadership continues with beligerent statements and Pakistan continues with nuclear ambiguity. Indian public pressures the BJP Government to come through with their threats to resolve Kashmir once and for all by attacking POK. Pakistan invites the Indian attack and puts the bomb on the table. US/UN rushes in and some red faces in India. No sanctions on Pakistan. No freezing of accounts. Back to the negotaiting table with a bomb PLUS a moral high ground.

Plausible?

Zeemax sahib,

There`s nothing hanky panky about private equity. Surely it is not the investor`s fault if sound companies get into trouble because of poor management or temporary adverse business circumstances. If someone is intelligent enough to see value where other investors dont and benefit from such insight, he deserves to make the money.

Regards

#72

Private Equity investment is nothing more than organised theft. How it works is through picking companies with strong cash-flows and assets but bad profits due to management troubles. Private equity firms (e.g. leveraged buyouts of yore) borrow to take over the firms through bridge-finance, take over the companies, and pledge the same cash-flows to replace the bridge-finance. They then strip the company`s assets, whittle down the workforce, bring in management to turn around the core business, then sell it off for a quick buck and look for the next target. Kindly note the 30% expected IRR on this particular fund.

So don`t jump up and down too much about this Abraaj Capital stuff. These are just more thieves of the private rich man`s banker Shaukat Aziz`s club looking for quick profits. This kind of financial engineering (aka day-light robbery) doesn`t help the country at all.

#78 MAJUMDAR


India and Pakistan being third rate nations face little external threats except for each other-

India and Pakistan are not nations. They are just two clowns wearing Nuclear hats.


But good quality nukes maybe handy just in case a trillion barrels of oil were to be discovered under the soils of Jhumri Tilaiya or Chakwal.

Yes-or in case we have to protect our Aishwarya Rais and other Miss Worlds.

76/77,

Very good points, Sanjay.

India and Pakistan being third rate nations face little external threats except for each other-But good quality nukes maybe handy just in case a trillion barrels of oil were to be discovered under the soils of Jhumri Tilaiya or Chakwal.

Regards