Post-flood challenges: Govt won’t opt for debt rescheduling or moratorium: MoEA

ISLAMABAD: Pakistan will not opt for debt rescheduling or moratorium to meet floods-related challenges as it is not an option in commercial loans and bonds while roll over from friendly countries is being availed.

This was revealed by senior officials of the Ministry of Economic Affairs while briefing the Senate Standing Committee on Economic Affairs meeting held on Friday.

Chaired by Senator Faisal Saleem Rehman the meeting was attended by Senator Muhammad Akram, Senator Manzoor Ahmed, Senator Attaur Rehman, and senior officers of the Ministry of Economic Affairs along with all concerned.

The committee enquired if the EAD had any role in financing of flood relief, wherein, it was informed that EAD is not a recipient of aid, charity or relief it only deals with debt.

The committee was informed that the aid to the flood victims from abroad, which is in cash, will be deposited in the Prime Minister’s Relief Fund.

Bahrain announced to give one million dollars, but the NDMA raised its hands saying that they cannot take it, said senior officials.

On the one million dollar fund coming from Bahrain, the NDMA said that they cannot use it, after which the fund had to be put in army funds, Additional Secretary added.

Senator Manzoor Kakar said if NDMA cannot take funds, then what the purpose of this institution is?

China announced to give 400 million RMB to flood victims, said Joint Secretary.

Rehabilitation of flood victims biggest challenge, says governor

If the cash is given by a country, it will go to Prime Minister’s relief or army funds, officials said.

Furthermore, the committee enquired if there was any proposal to seek some relaxation in debt repayment and was informed that based on expert opinion it was not suitable as Pakistan was already availing debt rescheduling in bilateral loan repayment and multilateral institutions do not offer such relaxations.

The Committee was briefed regarding the role, performance, mandate and functions of the Ministry of Economic Affairs. It also reviewed budgets, external debt and liabilities and details of multilateral and bilateral development partners. Steps taken by the ministry to provide legislative cover to NGOs receiving foreign funding in the light of the Sindh High Court’s judgement was discussed as well.

The Committee was informed that the ministry’s mandate revolved around external public debt management and establishment and administration of Joint Economic Commissions to create platforms to promote bilateral economic cooperation in areas such as trade, investment, agriculture, industry, education, health, transport and communication and financial assistance. While being briefed on Pakistan technical assistance program, the committee was informed that foreign students attend programs offered by HEC recognised universities.

During the discussion, the committee enquired whether foreign students attending Madaris in Pakistan are also part of this program, wherein, the committee was informed that they were not part of it. Following this, the committee directed that the ministry should work on inclusion of foreign students undertaking religious education at Madaris in Pakistan and Pakistani students taking Islamic courses abroad and inform the committee on the progress made in this regard.

While deliberating on agenda item (ii) pertaining to legislative cover to the NGOs receiving foreign funding in the light of the Sindh High Court’s judgment, the committee was informed that the EAD only deals with NGOs receiving foreign funding. Moreover, the committee was apprised that out of a total of 16,000 NGOs only 1,000 receive foreign funding and fall under the purview of the Economic Affairs Division.

The Committee directed that details of these 1,000 NGOs should be shared with it.

While elaborating on public debt, the committee was informed that multilateral and bilateral were most preferred sources as these had lower mark up and longer repayment plan.

The committee was also informed that following Covid the government of Pakistan was able to reschedule US$ 3,686 million of bilateral debt under Debt Service Suspension Initiative offered by G20 countries.

Copyright Business Recorder, 2022