Just last month we paid off some $1.1 billion of expensive debt, and now another billion will be wiped in the next few months. :k:
$1bn expensive debt to be repaid soon: Shaukat
Pakistan will repay soon another $1 billion expensive debt with a major portion of Suppliers Credit, Finance Minister Shaukat Aziz told NNI here on Friday. “The Suppliers Credit is an expensive debt with an interest rate of seven percent and above and war borrowed in late 1980s and 1990s,” Shaukat Aziz said. He added that some portion of this repayment would also be to multilateral donors “but major portion to goes in the head of suppliers credit.” The minister said, “the repayment of this expensive debt would be adjusted within the next two or three months.” At present the Suppliers Credit is almost touching about $2 billion and the repayment to this head of credit would reduce it to little over $1 billion, another official requesting anonymity said.
Pakistan has already repaid $1.1 billion debt of Asian Development Bank. This was also an expensive multilateral loan with the interest rate of almost 7 per cent. The Finance Division also planned to continue the practice of repaying its debt and priority is to clear the most expensive debt “liabilities the present government owned from its predecessors,” the source said. When this scribe contacted another official in the Economic Affairs Division, he said that before end of June this debt under the head of Suppliers Credit would be repaid.
Another positive development for Pakistans economy. Billions of dollars of debt inherited from years of corrupt Governance is now being paid off. This can only be welcome news. :k:
Indeed. After they pay off this $1 billion in a few months, the external debt should come down to just over $32 billion, coming down from $38 billion a few years ago. Shaukat Aziz and team are on record as saying that they want to pay off upto $5 billion in the next few years at least, and it seems they are ahead of schedule already in this plan. Hence by say 2007 or so our external debt should have dipped well down into the twenties.
At the same time our forex reserves are now some $12.6 billion. :k:
More positive news on the debt relief front. It’s great to see we will now have cleared the majority of our debts to the United States, and brought down the overall extrenal debt burden from over $38 billion a few years ago, to under $32 billion now.
**US To Write Off $460 Million Of Pakistan’s Debt In April **
The U.S. government plans to write off a further $460 million in bilateral debt owed by Pakistan, as part of its aid program for its South Asian ally in the war against Taliban and Al-Qaida. Pakistan’s government said in a statement Thursday that Finance Minister Shaukat Aziz and Alan Larson, U.S. undersecretary of state for economic affairs, discussed the proposed debt relief in Islamabad. “The formal signing of the write-off agreement is expected to take place in April this year,” the statement said. Larson is part of a U.S. delegation headed by U.S. Secretary of State Colin Powell, who is visiting Pakistan to discuss regional issues, including the recent warming in relations between India and Pakistan, steps to combat nuclear proliferation and the war against terrorism.
Pakistan owes $1.8 billion to the U.S. government after securing a $1 billion writeoff in debt last year. The South Asian nation had sought debt relief from Western nations after its economy was hurt by the U.S.-led war against terror in neighboring Afghanistan in 2001, which led to the overthrow of the Taliban regime. The statement also said the U.S. Export-Import Bank has expanded its financing facility to Pakistan’s public-sector companies. The enhanced short-to-medium term financing will support purchases of U.S. equipment and services by these companies in cases where repayment is covered by the sovereign guarantees. The debt rescheduling and foreign aid has helped Pakistan to overcome its balance of payment crisis and boost its foreign exchange reserves, now at an all-time high of over $12 billion. Pakistan is also negotiating a separate five-year $3 billion aid package with the U.S., announced by President George Bush when Pakistani President Gen. Pervez Musharraf visited Washington last year. The $600 million per-year aid package is expected to resume from the U.S. fiscal year beginning from October 2004.
FINANCE Minister Shaukat Aziz has said that Pakistan will say goodbye to IMF this year, as the nation is no longer in ‘kashkol’ culture. He made the announcement while speaking at the foundation-stone laying ceremony for Aiwan-i-Quaid complex in Fatima Jinnah Park in Islamabad on Saturday. He said that the country is very close to the realisation of Quaid-i-Azam’s dream of a strong, prosperous and enlightened Pakistan.
** It’s really heartening that Pakistan is today in a position to throw away the shackles of IMF as well as the begging bowl culture, which had unfortunately overtaken the country over the years due to the financial constraints emerging from negative economic policies of the BB and MNS regimes. ** A patriotic Pakistani obviously feels elevated with the swelling kitty both with foreign exchange and Pak rupee. The 12 and a half billion dollar foreign exchange reserves, increase in revenue generation, boost in exports and improvement in per capita income are obviously an encouraging scenario for the people of Pakistan. Shaukat Aziz certainly deserves all praise for this achievement by pursuing prudent fiscal policies, besides hard work over the past four years. He was, however, right when he said that the ease in economic situation doesn’t mean that there are no more challenges faced by the Pak economy. Challenges are naturally there, which the nation has to confront. What is satisfying is that the country’s policies and direction have been set right to tread the path of economic progress and prosperity. It’s true that Pakistan has to go a long way in realizing the Quaid’s vision in the fields of politics, democracy, economy and foreign affairs. It’s hoped that the nation will soon achieve its goal on that count as well. It’s, however, imperative for all and sundry to scrupulously follow Quaid’s golden motto of unity, faith and discipline. His personal example of hard work, honesty, commitment and nationalism need to be emulated for success, which will lead Pakistan to glory. The Aiwan-i-Quaid complex, which will be the symbol of national unity and pride, will hopefully contribute towards realisation of Quaid’s cherished dream. It’s certainly encouraging that the Jamali Government has committed all-out support for the construction of the complex under the auspices of Nazriya Pakistan Council and the Ministry of Education. The Jamali Government’s financial and other support for the project will hopefully lead to early completion of the complex.
Another positive measure by our government!