Pakistan gets $ 800 million in debt relief
Pakistan has so far secured $ 800 million in debt freeze deals from 14 members of the richest club in the G-20 countries, as it is still awaiting ratification by the remaining six countries, including the Saudi Arabia and Japan, involving billion dollar transactions.
Pakistan along with 76 other poor African countries had qualified for the G-20 debt relief initiative, announced in April this year for the period May-December 2020, to address the adverse effects of the pandemic.
In the past seven months, 14 countries have ratified their agreements with Pakistan, which has provided Islamabad with $ 800 million in fiscal space so far, according to government sources. In addition to these 14 nations, two other countries had also approached to extend debt relief to Pakistan.
Official documents showed that Pakistan has yet to finalize debt rescheduling terms with Japan, Russia, Saudi Arabia, United Arab Emirates and the United Kingdom.
Although these six countries have yet to ratify the debt relief-related agreements, these G-20 members are expected to complete the agreement before the end of next month, a senior official at the Ministry of Economic Affairs said. by answering a question. He said Pakistan was not reimbursing these six countries either, on the understanding that those members would eventually sign the agreements.
Pakistan expected total temporary debt relief of $ 1.8 billion for G-20 members for the period May-December 2020, according to the Ministry of Economic Affairs. This included $ 1.47 billion in loan repayments and $ 323 million in loan interest.
Estimates from the Ministry of Economic Affairs have shown that Pakistan can get $ 613 million in temporary relief from Saudi Arabia, $ 309 million from China, $ 23 million from Canada, $ 183 million from France, $ 99 million from Germany, $ 6 million from Italy, $ 373 million from Japan, $ 47 million from South Korea, $ 14 million from Russia, $ 1 million from the United Kingdom and US $ 128 million.
So far, Pakistani authorities have concluded 27 debt rescheduling agreements with around 16 countries, according to the Ministry of Economic Affairs.
The maximum relief was expected from Saudi Arabia to the tune of $ 613 million for the May-December period, the sources said. Japan was also to provide relief of $ 373 million. However, the agreements with these nations were still pending final approval. The Russian Federation is also expected to ratify the revised conditions by the end of next month, which, when ratified, could provide temporary relief of $ 14 million.
Pakistan owes the Group of 20 rich nations $ 25.4 billion in August this year. On April 15, the G-20 countries announced a freeze on debt repayments for 76 countries, including Pakistan, during the period May to December 2020, provided each country makes a formal request.
Saudi Arabia has also failed to extend the $ 3 billion financial aid package and has already prematurely withdrawn $ 1 billion which Pakistan has repaid with another loan to China. Pakistan could also repay the Kingdom $ 1 billion next month, a year ahead of Pakistan’s expectations.
The G-20 countries have also decided to extend the debt relief initiative for another six months (January-June) 2021 due to the second wave of the Covid-19 disease which has started to hit countries again.
The cabinet’s economic coordinating committee on Friday approved making another formal request to the G-20 countries for an extension of the debt relief initiative for another six months. This time, the Ministry of Economic Affairs estimated that Pakistan has the potential to get relief of $ 915 million, including $ 273 million in interest payments during the period January-June 2021.
The maximum aid of $ 385 million is expected from China, followed by $ 211 million from Japan, $ 104 million from France, $ 53.6 million from Germany, $ 65 million from the United States. United, $ 12 million from Saudi Arabia, $ 7 million from Russia and half a million dollars from the United Arab Emirates.
In the event that Japan and Saudi Arabia also delay the second phase relief, net benefits could drop to $ 685 million in the second phase, the sources said.
The United Arab Emirates on Thursday suspended issuance of new visit visas to Pakistan in addition to 11 other countries. There is no reason given by the UAE regarding the decision. Pakistan’s Foreign Ministry confirmed the suspension and said: “We have learned that the UAE has temporarily suspended the issuance of new visit visas until further notice for 12 countries, including Pakistan. The suspension is not applicable to visas already issued.
The UAE has also suspended Pakistan’s work visas and there is a need to prioritize this issue with UAE authorities, Senator Anwer Baig said during a speech on The Express News. – The Review. Senator Baig said Pakistan must find a balance in its relations with the Gulf and other countries. The government should also take steps to help the country get rid of seeking help from friendly countries, he added.
However, the government as a whole is pleased with the current account surplus of $ 1.1 billion during the July-October period of this fiscal year, conveniently ignoring a more than 10% drop in exports during this year. period.
Posted in The Express Tribune, November 22sd, 2020.