October 19, 2001	Friday	Shaba'an 1, 1422

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ISLAMABAD, Oct 18: The visiting British Secretary of International Development Ms Clare Short announced here on Thursday that the international community has decided to extend maximum economic support to Pakistan including relief in debt repayment.

Speaking at a joint news conference with Finance Minister Shaukat Aziz she announced that $84 million loans were being written off by British government. She said immediately her department will write of $34 million loans while $51 million loans will be written off by the Commonwealth Development Corporation shortly.

Mr Shaukat Aziz during the press conference disclosed that a comprehensive economic package was being finalised by Pakistan in line with the wishes of the international community.

In reply to a question, he said that Pakistan has a $12 billion bilateral debt and $15.5 billion multilateral debt. “And our package initially focuses on getting relief on account of $12 billion bilateral debt.”

He disclosed that Pakistan has been assured maximum support by international donors and bilateral creditors in this regard and termed Ms Short’s visit as very significant to have lined up economic support for Pakistan both for economic recovery as well as for Afghan refugees.

The British secretary of state for international development also announced a 15 million pounds package to support the government of Pakistan in its continuing reforms and in its efforts to alleviate the humanitarian crisis which has been made worse by the influx of Afghan refugees into the country.

Ms Short also declared that her department would increase its bilateral programme to Pakistan to 45 million pounds annually for the next two years. “These financial pledges come on top of the additional 11 million pounds the UK has provided since September 11 to ensure that weaker section of the society in Pakistan do not suffer because of the influx of Afghan refugees, and further 40 million pounds committed to alleviate the humanitarian crisis in the region,” she said.

Earlier, in his opening remarks the Finance Minister Shaukat Aziz said, “it is imperative that Pakistan receives adequate support from the international community to face the new challenges without undermining its reform efforts. In our discussions, Ms Short has shown understanding of these challenges and has promised due support of her government to meet them”, he said.

He said Pakistan has also raised the issue of sustainability of Pakistan’s debt burden. “It is imperative that the debt burden is lessened by the international community through a meaningful debt relief package so that Pakistan gains the required fiscal space for increasing spending on social development and poverty reduction programmes.”

At the same time, he said, Pakistan has also underlined the need for expeditious support from the international community for the refugees. “As winter approaches in Afghanistan, we expect large influx of refugees in Pakistan. Clearly, Pakistan would not be able to handle this problem on its own. We expect the necessary international assistance in meeting the need of the refugees”.

Ms Short said that humanitarian situation in the whole region was very serious and the next few weeks were critical to avoid a disaster. “Millions of people are facing the prospects of famine. But there has been great international effort to meet this challenge and the outlook is now looking better”, she said adding that the World Food Programme (WFP) was now trucking in 200 tons of wheat a day which meets the target it set for providing enough food for Afghan people in the winter.

Responding to a question Ms Short said that Pakistan has a very serious debt problem and that was why the international community has decided to extend all possible support including certain debt relief. She said that there was a high level of poverty in Pakistan and in this regard she mentioned tribal areas of the NWFP. She said there was a need to provide fairly good assistance to Pakistan to uplift social sectors specially ensuring female education.

Asked about the debt package, the finance minister said that he could not share at this time its details but then hastened to add, “we are working out all possible modalities and I would soon share with you what we are seeking from our creditors”.

But he said that the government has finalised a contingency plan to meet the situation arising out of September 11 incident in case support from the international community was delayed for one reason or the other.

Ms Clare Short told a reporter that Pakistan has for the first time successfully completed a programme with IMF (standby agreement) and now it surely deserves a bigger package.

Answering another question, Aziz said that Pakistan was not seeking any debt relief under Highly Poor Indebted Countries (HIPC) definition. “Our position is not all that bad to seek HIPC option as our reserves are over $3 billion, liquidity in banks is sufficient and market prices are favourable”, he added.