Islamabad: Pakistan has reconciled his duty with more than a dozen bilateral creditors still from 20 countries, and then the debt relief agreement will be signed with each country separately until 31 December 2020, in order to avail debt in the amount of slightly more than $2 billion (Rs335 billion), the news learned.
Said a senior official from the Finance Department News on Sunday that work was in progress by the increase in debt reported by g-20 countries. “Until now, we made up for a dozen creditors out of 20, so we are making efforts to achieve reconciliation and accurate data on debt as soon as possible after that Islamabad would be forced to sign an agreement with each creditor separately bilateral,” said a senior official of the General.
Other sources reported that the deadline for decisions on debt relief were provided on 31 December 2020, but the government is making every effort to accomplish this task in the first quarter to September 30. The burden of debt for $2 billion, according to the official, provided a much-needed “breathing room”, as if it had not happened then the pressure on the exchange rate can be set in the last months of payments on the external front.
Among the G20, China is the biggest bilateral lender to the outstanding obligations in respect of Pakistan piled up $9 billion, followed by Japan with $5 billion, and in other countries, including South Korea, France, Germany, Canada, USA, Saudi Arabia and others.
Pakistani authorities have requested assistance from the world Bank to develop a standard format for seeking debt relief from bilateral creditors, but due to the different requirements of the standard can not be developed. Now the economic Affairs division has developed its own format in consultation with stakeholders and the Ministry of justice to move forward on this issue.
“We will soon begin signing separate agreements with bilateral creditors to avail this facility the debt relief in order to mitigate the negative impact of the pandemic COVID-19.”
According to the world Bank, public debt in developing countries rose to levels not seen in the last 50 years, many developing countries increasingly acquire debt at favorable terms from private creditors and non-Paris club members. As COVID-19 pandemic wreaked havoc in the global economy, poorer countries that will suffer most from the virus will also face the debt crisis.
With the support of the world Bank, IMF and other g-20 economies, enabling the world’s poorest countries to suspend repayment of bilateral official loans on 01 may. This initiative will go a long way to protect the lives and livelihoods of millions of vulnerable people. In the G-7 said that it will suspend debt of the poorest countries.
The world Bank group (WBG) and other Bretton Woods institutions increasing financial support to the IDA (international development Association) countries to help them overcome the crisis. As always, we first assess the overall financial picture of the country, including debt and consequences of payments.
The WBG will deploy as much as $ 160 billion over the next 15 months, of which $ 50 billion will be either grants or concessional terms from the IDA-the world Bank’s Fund for the poorest segments of the population.
In addition to the ongoing support of healthcare operations will be to emphasize social protection, reducing poverty and financing policies.
For countries such as IDA in Africa the interest rates on loans the world Bank is extremely low and the maturity and grace period for a long time. Half of IDA countries are already getting at least half if not all — of their IDA resources on grant terms, which do not bear any re-payments.
IDA automatically regulates the conditions for providing assistance. IDA is aware that debt sustainability is a key issue for many countries with low income. For this reason, when countries face increasing difficulties in servicing external debt, including due to a serious crisis, IDA automatically adjusts the terms of its assistance to countries to access additional funds and technical assistance without increasing their debt.
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