What will happen if our country get Bankruptcy?

What happens when a country gets bankrupt? Any historical examples?

By bankruptcy I think you meant "Economic collapse."

Countries that have suffered Economic Collapse [e.g Argentina] faced the following implications :-

1)Hyper inflation

2)Massive unemployment

3)Increase in poverty

4)Extremely low real incomes

5)Negative growth

6)Collapse of Financial Institutions (closure of banks etc)

7)Civil Unrest

in short, everything would go down the drain. Pakistan has not experienced such a situation before but it is now considered by many that we are on the verge of Economic Collapse thanks to useless and corrupt government.

It takes years and years and a dedicated administration (which we don't have) to recover from such a collapse.

(*Also hard to believe but in 2007 our foreign reserves had hit a record high and we had surplus electricity)

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latest rumour is of wateen group and Bank Al Falah…
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This one reached me also. What exactly is the gossip about them?

right time for army rule! (seriously) democracy cant work here because we are very emotional and end up giving votes to people in sympathy who murder their wives

will have to agree with SaadIbrahim LOL

Pakistan cannot get bankrupt but it will rather default on its debts. What happens when a country defaults on debts? Russia did so in 1998 - google it!

for the people not wanting to google it

here it is in a nutshell

http://en.wikipedia.org/wiki/Russian_financial_crisis#Recovery

we don't have enough, we need more democracy.

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Everything you said here is 100% right. Excellent analysis :)

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Thank you. i prefer to stick to history n facts. this country has been running on loans for past 30 years… who wants it Not to be declared bankrupt and why?

Pakistan has suffered since its creation because of its geographical situation…

If you put todays Malaysia into Pakistan Geo location you will find same output…

Dont let it die and do not let it progress… keep it in cage and make it do whatever you want. whenever it tries to get out… stop feeding , chain in restrictions and make it beg … This is the Pakistan story for the last 30 years and will continue most likely.

[quote=", post:, topic:"]

By bankruptcy I think you meant "Economic collapse."

Countries that have suffered Economic Collapse [e.g Argentina] faced the following implications :-

1)Hyper inflation

2)Massive unemployment

3)Increase in poverty

4)Extremely low real incomes

5)Negative growth

6)Collapse of Financial Institutions (closure of banks etc)

7)Civil Unrest

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this means we must draw all our money from banks, but what will happen if our currency is changed, like it happened in Kwait in 1990 and in Afghanistan in 2002.

With all the panic currently surrounding the market, the financial crisis is only getting worse. With those massive withdrawals, I don't see how will the rumors of Bank Al-Falah defaulting won't come true.

people love to panic and spread fear, rumors are rumors.

Our President is trying to get 100Billion USD loan from foreign countries and when he get it, it is most likely that they will divide it among themselves and leaving the burden on Pakistani people to pay the loan and interest. I hope what I am thinking is wrong but the situation tells so. I don't have any hope except Allah because only Allah can protect our country now. Prices of every thing going up and up, petrol, grain, Ghee, Oil, Vegetables, Fruit, Medicines every thing going beyond a normal citizen's budget. Above all, Electricity disaster, Although we only consume half of the electricity due to load shedding, Electricity bills are still higher than before. What the hell is this?? Small factories are forced to shut down due to electricity shortage, haven't any govt planned any thing for this electric shortage??? Lets hope Allah guide our rulers to the right path.

Govt. is busy in killin ppl, how u expect them to care for other things...

""Jaysai awam wasay Hukmaran""

Simple is that.

Until the time we Karachites continue to support Mr. 10%, gangsters in London enjoying life on the donations and ransom, our lives will remain miserable in Karachi. I don't know when will Karachites going to understand and stand against these criminals, who have destroyed the peace of karachi due to which no foreign investment is coming into karachi.

pfft...

repeating the same old slurs and whining relentlessly wont make a difference either.

stop watching tv and read a book.

A country most certainly can go bankrupt. All it has to do is default on it's international loan payments and be unable to fill it's import bill due to lack of foreign exchange.

Once that happens no bank in the world would give your country a loan or honor your l/c's because they don't know for sure if the country will be able to pay back. Even if they do they'll charge a extremely high interest rate like 25 % to justify their high risk loan which will only push the country deeper into the crisis.

Now as to what will happen when a country goes bankrupt. Well here are a few scenarios.

1). It's currency enters hyper inflation.

If you don't have any forex reserves you can't import oil or fertilizer or chemicals (pesticides). Since there is a shortage of all three products their prices go up, this makes the cost of producing food much higher and also many farmers don't farm because they don't have enough money to buy all these things at the higher rates (not enough working capital). That creates a domestic food shortage and you can't import any from abroad because you don't have any foreign currencies to buy with. This limited food and excess demand makes the price of food go way up. Everyone needs food so whatever they are doing they start charging more to be able to buy food. The prices of everything start to move up.

2). Lawlessness/Anarchy/Mass unemployment

When you can't afford food, you sure as hell aren't going to buy new clothes, a tv, a car, a house or anything else for that matter. All consumer industries/businesses start to shut down because sales slump. Factories shut down, construction stops, everyone gets fired. You have a lot of people sitting idle and suffering and watching their families suffer. At that point morals take a back seat. They'll do whatever they have to do to survive. When 170 million people think that way, well you get the picture.

3). Mass poverty / Disease / Savings Wiped out

No jobs, no income, unfordable food. Disease as a result of not having enough money to buy medicines / afford treatment locally. On a macro level not being able to import medicines due to lack of foreign exchange.

Most people work their entire life times and consider themselves a great success if by their retirement time they have a house built, children married and a pension/savings in the bank. The problem in a bankrupt scenario is the local currency will undergo hyper inflation leaving 1 lakh the value of 10,000 in months. Suddenly life savings that were enough for 10 years are hardly enough for 1 year. That means the person who was saving will have to start working again adding to the unemployment.

4). Bank Crashes

Banks work on people's savings which will be withdrawn because the 'rainy' day people saved for is here. People are going to want their money that they saved for troubled times. With people making withdrawals across the country, and banks not being able to pay everyone at once, you have banks crashing.

5). Army / Government stop functioning

Try stopping all army pays for 6 months and see what a well disciplined army we have. You'll have revolts everywhere. Soldiers will start selling their weapons, army munitions and anything else they can get their hands on to feed their families. You've all seen the Lord of War right ? Well that was the largest army in the world. No army means no law and order, no one watching the borders at night.

You get the picture, the list goes on and on and on. As a country you can't afford to go bankrupt and with the geo strategic position Pakistan has on the world map and the internal troubles we're all watching everyday on our televisions you cannot even afford a whisper of bankruptcy. It's everyone's worst nightmare come to life when everything that we know and love so much our culture, our identity, our freedom.. ends.. everything.

$ 100 Billion aid and 'Friends of Pakistan' is a joke. There are no free lunches, the world is like a Jew which will take your heart as the pound of flesh for giving you peanuts.

Nothing would happen. EVEN if we "default" on the loan payments. I think we should default. I think its a good idea. Why should we pay those loans they payed to their agents. More then 75% of it went back to them directly in form of consultations or bank accounts..

There are many examples of countries in south America defaulting. None of which is close to the doomsday scenario being propogated.. Actually, I believe things would get better after we default on our loan payments..

Having said thatthere is no way Pakistan is going "bankrupt". Or even going to "default"...

as i said before pakistan is a country not a Limited company. which get bankRupt,

secondly Entrepreneur or business entity. people do their work independently,