Pakistan news: Pakistan in crisis obtains $ 800 million debt relief for G20 countries: report

Islamabad: Cash-strapped Pakistan secured $ 800 million in debt freeze deals from 14 G20 members while still awaiting ratification by the group’s remaining six countries, including Saudi Arabia and Japan, according to a press article published 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, during the period May to December 2020, provided each country makes a formal request.

Pakistan along with 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 address the adverse effects of the coronavirus pandemic.

In the past seven months, 14 countries have ratified their agreements with Pakistan, which has provided Islamabad with $ 800 million in fiscal space so far, the Express Tribune reported, citing government sources.

“Pakistan has yet to finalize the terms of debt rescheduling with Japan, Russia, Saudi Arabia, the United Arab Emirates and the United Kingdom.”

– Public debt

In addition to these 14 nations, two other countries had also approached to extend debt relief to Pakistan.

According to official documents, Pakistan has yet to finalize the terms of debt rescheduling with Japan, Russia, Saudi Arabia, the United Arab Emirates and the United Kingdom.

Although these six countries have yet to ratify the debt relief-related agreements, these G-20 members are expected to complete the agreement before the end of next month, a senior official at the Ministry of Economic Affairs said. .

He said Pakistan was not reimbursing these six countries either, on the understanding that those members would eventually sign the agreements.

Pakistan expected total temporary debt relief of $ 1.8 billion for G-20 members for the period May-December 2020, according to the Ministry of Economic Affairs. This included loan repayments of $ 1.47 billion and $ 323 million in loan interest.

Estimates from the Ministry of Economic Affairs have shown that Pakistan can get $ 613 million in temporary relief 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 UK United and US $ 128 million.

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 period May-December, he said. Japan was also to provide relief of $ 373 million. However, the agreements with these nations were still pending final approval.

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 repay the oil-rich kingdom $ 1 billion next month, a year ahead of Pakistan’s expectations.

At the same time, the Cabinet Economic Coordination Committee on Friday approved a new formal request to the G-20 countries for a six-month extension of the debt relief initiative, according to the report.

This time, the Ministry of Economic Affairs estimated that Pakistan has the potential to get relief of $ 915 million, including $ 273 million in interest payments during the period January-June 2021.

The maximum aid 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 the United States. United, $ 12 million from Saudi Arabia, $ 7 million from Russia and half a million dollars from the United Arab Emirates.

In the event that Japan and Saudi Arabia also delay the second phase relief, net benefits could drop to $ 685 million in the second phase, the sources said.

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