KARACHI, Aug 13: Pakistan’s foreign debt went up from $33.307 billion in fiscal year 2004 to $34.037 billion in FY 2005, showing an increase of $730million. Provisional data released by the State Bank show that the overall external debt and liabilities also increased from $35.258 billion to $35.834 billion during this period registering a rise of $576 million.

Whereas the stock of external debt grew from $33.307 billion in FY04 to $34.037 billion in FY05 the stock of forex liabilities rather declined from $1.951 billion to $1.797 billion. That in turn showed a slower growth in overall debt and liabilities than in the debt alone.

The breakup of the debt show that public and publicly guaranteed debt increased from $29.875 billion in FY04 to $31.084 billion in FY05 showing a growth of $1.209 billion. And within that, the stock of medium and long term debt i.e. the debt of more than one year maturity went up from $29.853 billion to $30.813 billion, showing an increase of $960 million.

The short term debts i.e. those of less than one year maturity also shot up from $22 million in FY04 to $271 million in FY05. This short term debt was entirely from one source i.e. the Islamic Development Bank or IDB.

The breakup of medium and long term debt show that whereas the debt obtained from the Paris Club countries fell from $13.565 billion in FY04 to $13.018 billion in FY05, the multilateral debt increased from $14.349 billion to $15.358bn. Multilateral debts are the debts obtained primarily from the Asian Development Bank and the World Bank.

During the first half of the last fiscal year, the ADB approved $301m for improving road networks in the NWFP and $200 million for boosting health, education and water and sanitation services in the Punjab. And in the second half, it approved a $31 million loan for agricultural business development.

The WB, during the first half of FY05, approved $300 million for poverty reduction; $21.5 million for polio eradication and $102.9 million for tax administration reforms in Pakistan. And in the second half, it approved $100 million credit for Punjab for further improving the quality and access to education achieved under a similar credit last year. It also approved $123 million loan for Pakistan to help it rehabilitate Taunsa Barrage on the river Indus. In the second half of FY05, the WB and the International Development Association together approved $300 million for third generation banking reforms in Pakistan.

The country-wise break-up of the debt obtained from Paris Club is not available. The Paris Club creditors include (1) Austria (2) Australia (3) Belgium (4) Canada (5) Denmark (6) Finland (7) France (8) Germany (9) Ireland (10) Italy (11) Japan (12) Netherlands (13) Norway (14) Russian Federation (15) Spain (16) Sweden (17) Switzerland (18) United Kingdom and (19) United States of America.

That Pakistan did retire part of the Paris Club loans is but obvious from the $547m decline in the stock of the Paris Club loans in FY05. A separate set of data released by the SBP show that during the last fiscal year, Pakistan paid back $533m worth of the Paris Club loan. The remaining decline of $12m in the stock of the Club’s debt must have occurred due to a slight decline in the value of the euro against the US dollar. In FY05 the euro fell by around 0.7pc against the dollar. That naturally reduced the dollar-denominated value of the debt of nine out of the 19 Paris Club countries, which use euro as their national currency.