ARGENTINA DEFAULT - PAKISTANI BUSINESSMEN GET NO PAYMENT FOR EXPORTS - GOING BANKRUPT

Founder Editor Tazeen Akhtar..

Islamabad - Since the end of 2013, Pakistani businessmen have received no payments for their exports to Argentina due to the deepening economic crises which is affecting that South American country. The perspective of receiving any money for their exports to Argentina became even more distant when Argentina was declared in default on 30th July 2014. Since then, although Pakistani exporters do not like to accept, there is no hope of getting paid for their exports to Argentina.

Thanks to this bad business, many Pakistani exporters are silently going bankrupt. Why silently? Because it is a question of damage control. As they say, if people become aware of their bad business there will be less opportunities of doing further business of any sort. Nobody wants to deal with businessmen who have done bad business. People want to do business with successful businessmen only.

But are they guilty for their bad business? Not exactly, there is little information in Pakistan about how reliable is to do business abroad, especially if the question of the country has little importance and business is small. This is the case of Argentina. In the best years, Pakistani exports to Argentina never surpassed $40 million and Pakistani exporters who deal with Argentina are well below 100. This explains why there is little news about Argentina in Pakistani print and electronic media and why the Chambers of Commerce are not interested in researching about the economic situation in Argentina and advise their members about it.

In the first days of last August, Argentina`s default was big news everywhere. Only then most people in Pakistan and in the world realized the size of the current crisis in Argentina. It was widely publicized that the three most important credit-rating agencies, Moody`s, Fitch and Standard & Poors, have rated Argentina as “in default”. This means that Argentina`s titles have no market value. But before that, those three credit-rating agencies rated Argentina as “CCC”. The triple C rating means that Argentina`s titles were valued as zero, or close to zero. This rating was in place for years and was a big red light for those who wanted to do business with Argentina.

24 SEP 2014