Pakistan - News and Discussion -7

[Naresh]

[center]<b><span style='font-size:14pt;line-height:100%'>Foreign debt records $1.31 billion spike</span></b> <!--emo&:flush--><img src='style_emoticons/<#EMO_DIR#>/Flush.gif' border='0' style='vertical-align:middle' alt='Flush.gif' /><!--endemo--> [/center]

<b>LAHORE – <span style='font-size:12pt;line-height:100%'>Pakistan’s foreign debt and liabilities have shown a hefty increase of 1.31 billion dollars in first three months of this calendar year, The Nation learnt on Monday.

By March 31, 2006, the external debt and liabilities of the country have expanded to 36.55 billion dollars, from 35.24 billion dollars in December 2005.</span>

The total external debt of Pakistan <span style='font-size:12pt;line-height:100%'>has increased to 34.903 billion dollars while foreign exchange liabilities of the country amounted to 1.654 billion dollars by March this year.</span></b>

Details obtained by The Nation showed that this hefty increase in the external debt and liabilities of the country has negated the federal government’s claim of reduction in the foreign exchange debt and liabilities. Break-up of Pakistan’s external debt and liabilities show that by March 31, 2006, the public and publicly guaranteed debt stood at 31.821 billion dollars, from 30.742 billion dollars in December 2005 while private non-guaranteed debts rose to 1.588 billion dollars as against 1.289 billion dollars during the comparative period.

Official sources said that the foreign debt liabilities of the country would further increase as the government was not only floating international bonds to raise foreign exchange, but also seeking more loans from the donor agencies for earthquake rehabilitation and ensure sustainability of the current economic growth.

<b>Sources said that neither the State Bank of Pakistan nor the Finance Ministry had disclosed the latest quantum of foreign debt and liabilities of the country at the end of fiscal year 2005-06. <span style='font-size:12pt;line-height:100%'>They said that the central bank and the ministry were deliberately delaying the release of this data knowingly that its release would lead to a flurry of criticism against the government. Because the government had been claiming for the last two years that it had broken the ‘kashkoal’ and increase in debt and liabilities would negate this claim of the rulers, said sources.</span></b>

In fact, the government had been borrowing more aggressively from the day it had broken the IMF ‘kashkoal’ in December 2004, they added. In December 2004 the federal government had refused to receive last two tranches of the PRGF loan of the International Monetary Fund that involved a total loan of 1.4 billion dollars.

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