Business

South Korea defers Pakistan’s loan worth $19.91m

Published

2 years ago

Farwa

Pakistan inks Debt Service Suspension Agreement with Korea.
This amount will now be repaid over a period of six years.
Pakistan has already signed 104 pacts with 21 bilateral creditors.

ISLAMABAD: In a sigh of relief, the Republic of Korea deferred Pakistan’s loan worth $19.911 million, under the G-20 Debt Service Suspension Initiative (DSSI) framework on Monday.

The cash-strapped country inked a Debt Service Suspension Agreement with Korea on Monday. This amount, initially had to be repaid between July and December 2021, will now be repaid over a period of six years (including a one-year grace period) in semi-annual instalments, said a statement issued by the Economic Affairs Division (EAD).

Due to the support extended by the development partners of Pakistan, the G-20 DSSI has provided the fiscal space which was necessary to deal with the urgent health and economic needs of the country.

The total amount of debt, that is to be suspended under the DSSI framework, covering the period of repayment from May 2020 to December 2021, stands at $3,686 million.

Pakistan has already concluded and signed 104 agreements with 21 bilateral creditors for the deferment of its debt repayments under the G-20 DSSI, amounting to $3,633 million.

The signing of the above-mentioned agreement brings this total to $3,653 million. Negotiations for the remaining agreements to be signed under the G-20 DSSI are ongoing.

It is pertinent to mention here, as the International Monetary Fund (IMF) is reluctant to strike a staff-level agreement without seeking confirmation on the external financing gap, Pakistan, meanwhile, conveyed to the global creditor’s staff to conclude the ninth review otherwise budgetary framework for 2023-24 would not be shared.

The lingering differences between the IMF and Pakistan are heading towards an “unbreakable deadlock” whereby Pakistani authorities claim that the confirmation of $4 billion financing was shared with the IMF even with its full details and break-up but the Fund was playing “politics” by not moving towards striking an agreement despite passing six months period.

The ninth review was due in November 2022 but the two sides have not yet reached consensus.

The patience of Pakistani high-ups is running out as they argue before the IMF officials that Islamabad should be treated as a member of the Washington-based creditor, not a beggar.

The Pakistani authorities are hopeful that the current account deficit would remain surplus for April 2023 when the numbers would come out in the next few days.

The financing gap of $4 billion was fulfilled by getting confirmation as the Kingdom of Saudi Arabia conveyed to the IMF that they were ready to provide an additional $2 billion in deposits and UAE $1 billion.

The World Bank is committed to providing $450 million RISE-II after fulfilment of four prior conditions and $250 million by the AIIB. Pakistan also received firm commitments for getting $350 million out of total Geneva pledges for flood-affected areas.

The only remaining amount is $1 billion from commercial banks and they are waiting for IMF’s deal.

The Pakistani officials argue that the external financing requirements had been fulfilled, so there was no justification for using delaying tactics to avoid signing the agreement.

Keeping in view this situation, the Ministry of Finance is all set to share the Budget Strategy Paper (BSP) with the federal cabinet without sharing it with the IMF in its meeting scheduled to be held today (Monday).

Business

SFD and Pakistan Sign Two Deals Totaling $1.61BLN

Published

1 day ago

Farwa

Two agreements totaling $1.61 billion have been inked by Pakistan and the Saudi Fund for Development to improve their bilateral economic cooperation.

Business

Saudi Arabia and Pakistan sign an MOU to strengthen their auditing industry collaboration.

Published

1 day ago

Farwa

A spokesperson for the office of the Auditor-General of Pakistan (AGP) announced on Monday that the two countries have signed a Memorandum of Understanding (MoU) to strengthen cooperation in public sector auditing through improved cooperation between audit institutions of both countries, as well as training programs and the exchange of trainers.

This comes as a group from Saudi Arabia’s General Court of Audit (GCA), headed by GCA President Dr. Hussam bin Abdulmohsen Alangari, arrived in Pakistan on Sunday for a four-day visit.

The agreement was signed during AGP Muhammad Ajmal Gondal’s meeting with the Saudi delegates, aiming to strengthen audit cooperation, enhance knowledge-sharing, and improve governance, transparency and accountability in government spending.

Public relations officer Muhammad Raza Irfan of the AGP’s office told Arab News that the deal will further advance bilateral collaboration between Saudi Arabia and Pakistan in addition to enhancing professional ties between the two nations’ auditing institutions.

In a statement released from his office, AGP Gondal was cited as saying, “This collaboration marks a significant step toward fostering international cooperation in auditing.”

“The exchange of ideas and methodologies will undoubtedly strengthen our capacity to meet emerging challenges and set new benchmarks for public accountability.”

Discussions at Monday’s meeting focused on fostering closer ties between the Supreme Audit Institutions (SAIs) of Pakistan and Saudi Arabia, sharing innovative audit methodologies, and planning collaborative initiatives for the future, according to the AGP office.

The two parties decided to increase their knowledge of theme, environmental, and impact audits as well as to exchange best practices in audit standards, performance audits, and citizen participation audits.

The statement added, “It also agreed to exchange trainers, address new auditing challenges, plan cooperative audits, including a performance audit on the oil and gas sector in 2025, and work together on training programs.”

Both sides reaffirmed their shared commitment to promoting transparency, accountability and excellence in public sector auditing.

Business

The government chooses to continue the PIA privatization process.

Published

1 day ago

Farwa

The Pakistan International Airlines (PIA) privatization process will be restarted by the federal government, and expressions of interest would be requested within the month. Officials stated that the Prime Minister’s Committee on Privatization will convene to make the final decision.

Usman Bajwa, the secretary of the Privatization Commission, gave a briefing on the updated procedure to the National Assembly Standing Committee on Privatization. Additionally, he disclosed that airlines other than PIA are now able to compete with regional carriers thanks to IMF-approved aircraft tax concessions.

Farooq Sattar, the chairman of the privatization committee, underlined the importance of giving PIA workers at least five years of job security. Employee protection will continue to be a top priority and will be resolved prior to bidding, the Privatization Commission promised.

PIA’s liabilities totaling Rs650 billion have already been assumed by the government, and an additional Rs45 billion in outstanding debts must be paid before the privatization process can begin. As of the now, PIA has assets around Rs155 billion and liabilities worth Rs200 billion. It will be necessary for the new buyer to expand the fleet by 15 to 20 aircraft.

Additionally, the Privatization Committee has sought a timeline for the privatization of Faisalabad, Gujranwala, and Islamabad Electric Supply Companies. Officials stated that after the appointment of a financial advisor, the privatization process for these companies will accelerate.