Cash-strapped Pakistan obtains $ 800 million debt relief from G20 countries: report – Times of India

ISLAMABAD: short of money Pakistan secured $ 800 million in debt freezing contracts for 14 members of the G20 while still awaiting ratification by the other six countries in the grouping, including Saudi Arabia and Japan, according to a media report on Sunday.
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, between May and December 2020, on condition that each country makes a formal request.
Pakistan and 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 combat the adverse effects of the pandemic of Covid-19.
In the past seven months, 14 countries have ratified their agreements with Pakistan, which has granted Islamabad $ 800 million budget space at the moment, The Express Tribune reported, citing government sources.
Besides these 14 countries, two other countries had also approached to grant debt relief to Pakistan.
Pakistan has yet to finalize debt rescheduling arrangements with Japan, Russia, Saudi Arabia, United Arab Emirates and the United Kingdom, according to official documents.
Although these six countries have yet to ratify the debt relief deals, these G-20 members are expected to complete the deal before the end of next month, a senior official at the Ministry of Economic Affairs said. .
He said Pakistan was not making any refunds to those six countries either, on the understanding that those members would eventually sign the agreements.
Pakistan expected temporary total debt relief of $ 1.8 billion from members of the G-20 countries for the period May-December 2020, according to the Ministry of Economic Affairs. This included principal repayments of $ 1.47 billion and interest of $ 323 million on loans.
Estimates from the Ministry of Economic Affairs have shown that Pakistan can get temporary aid of $ 613 million 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 $ 128 million from the United States.
So far, Pakistani authorities have concluded 27 debt rescheduling agreements with around 16 countries, according to the report.
The maximum relief was expected from Saudi Arabia to the tune of $ 613 million for the May-December period, he said. Japan was also to provide aid of $ 373 million. However, the agreements with these countries were still awaiting the last nod of the head.
Russia is also expected to ratify the revised terms by the end of next month, which, when ratified, could provide temporary relief of $ 14 million, according to the report.
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 pay back $ 1 billion next month to the oil-rich kingdom, a year ahead of Pakistan’s expectations.
At the same time, the Cabinet Economic Coordination Committee on Friday approved to make another formal request to the G-20 countries to extend the debt relief initiative for six months, according to the report.
This time around, the Ministry of Economic Affairs estimated that Pakistan could potentially get relief of $ 915 million, including $ 273 million in interest payments during the period January-June 2021.
Maximum relief 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 US United, $ 12 million from Saudi Arabia, $ 7 million from Russia and half a million dollars from the UAE.
In the event that Japan and Saudi Arabia also delay relief in the second phase, the net benefits could drop to $ 685 million in the second phase, the sources said.

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