Pakistan finance minister Ishaq Dar this week said his country will not seek to reschedule bilateral debt of close to $27 billion with different countries, according to news agency the Dawn.
“When we are going to arrange $32-34bn for external payments, another $1.2bn is no big issue,” Dar was quoted as saying by the Dawn. He further added that rescheduling of bilateral debt is fine.
However, Ishaq Dar, the new finance minister, was appointed after Miftah Ismail stepped down and has faced scrutiny for his moves. His predecessor Ismail criticised the Pakistani government’s move to reduce the prices of all petroleum products for the next fortnight, taken last month.
A defiant Dar, according to the Dawn, said: “I have been dealing with the IMF for the last 25 years; I will deal with it.”
The move by the Pakistan government to slash fuel prices is against the International Monetary Fund (IMF) deal which urged Pakistan to follow a ‘policy of raising prices monthly through added levies to ensure enhanced revenues.’
In his defence, Dar said the levies would hurt Pakistan as it was recovering from damages caused by the recent floods. Ismail called Dar’s moves ‘reckless’.
Pakistan has also taken loans from the wealthy Paris club but will not reschedule the international debt from the grouping of the wealthy western nations.
Dar said Pakistan owes Paris Club countries a combined sum of around $10.7 billion and claimed the overall debt to these creditors was no more than 11% of total foreign debt.
The $32-34bn in debt mentioned earlier by Dar refers to $22 billion worth of foreign debt servicing and $10-12 billion of current account deficit. Pakistan owes China close to $23 billion in bilateral debts.
The claims also come ahead of the annual meetings of the International Monetary Fund (IMF) and the World Bank for which Dar left Islamabad this week.
Pakistan’s State Bank of Pakistan said that the forex reserves stood at $7.89 billion and the total amount of forex reserves stood at $13.6 billion.
Dar sought to assuage concerns by saying that Pakistan will complete the IMF programme with all its conditions in an honourable manner and meet all repayment obligations to multilateral, bondholders and Paris Club creditors, according to a report by PTI.
