Pakistan will decide its future line of action after assessing the amount of debt relief it is eligible for following the G-20 countries' decision to suspend developing countries' debt repayments to cope with the situation arising out of Covid-19 pandemic.
This was stated by officials in Ministry of Economic Affairs Division and Foreign Office to Business Recorder on Tuesday when asked why Pakistan has not yet formally approached the G-20 countries and multilateral financial institutions for debt relief.
Sources further stated that the Finance and Economic Affairs ministries are assessing the overall debt relief the country is eligible from the G-20 countries' decision.
"The Finance and Economic Affairs Ministries would look into this issue comprehensively and determine further course of action," Foreign Office spokesperson Aisha Farooqui said in response to Business Recorder's query as to why Pakistan has not yet formally approached the G-20 countries with regard to debt relief.
She said that Prime Minister Imran Khan had made a global appeal for debt restructuring for developing countries in the wake of the Covid-19 challenge. "Prime Minister's appeal found global resonance and several multilateral institutions spoke in favor of it including the United Nations, International Monetary Fund (IMF), World Bank and G-20 etc," the spokesperson added.
Sources in EAD told Business Recorder that Pakistan has got the commitment from Saudi Arabia and China that over $ 6 billion loans would be rolled over during the thirty nine month Extended Fund Facility IMF programme.
The IMF and World Bank have yet to commit to extending any debt relief in terms of rescheduling or suspending of the debt, the sources said, adding that only G-20 countries have so far announced the debt relief, which is insignificant in case of Pakistan.
In response to Business Recorder query, Teresa Daban Sanchez, Resident Representative of IMF in Pakistan stated, "Fund has approved the provision of debt relief to some poorest, most vulnerable and low income countries through the Catastrophe and Containment Relief Trust for the payment of their obligations to the IMF, and also has made a call for exploring the option of debt relief and has welcome the G20 initiative for debt suspension".
Sources said although the process of assessing the relief is underway, yet he added that Pakistan may not get any major relief on account of its bilateral debt both from the Paris Club countries as well as non Paris Club countries.
He said that the Paris Club had already rescheduled Pakistan's bilateral debt in 2002-3 and it is not yet due for repayment.
"There are meager chances of getting any substantial relief from the G-20 countries. However, the government is assessing the overall impact of the relief and the future line of action will be decided accordingly," the official of the EAD added.
The G-20 initiative was approved last Wednesday which includes a set of general terms and needs further work before it gets operational, he added.
Earlier, Foreign Minister Shah Mahmood Qureshi had claimed that Pakistan is expecting to get 'substantial relief' in the wake of G-20 countries' decision to suspend the developing countries' debt repayments to provide fiscal space to these countries including Pakistan to cope with the situation arising out of Covid-19 pandemic.
Comments
Comments are closed.