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| November 05, 2006 | Sunday | Shawwal 12, 1427 |
Debt swap accord signed with Italy
ISLAMABAD, Nov 4: Pakistan and Italy signed an agreement on Saturday on ‘debt for development’ swap of approximately $ 85 million which is 50 per cent of the total Italian debt that Pakistan owes to Italy.
The agreement was signed by the visiting Italian Deputy Foreign Minister Gianni Vernetti and Minister of State for Economic Affairs Hina Rabbani Khar.
Ms Khar said in May 2006 Italy had agreed to cancel/adjust 50 per cent of its debt to Pakistan’s expenditure up to $ 85 million incurred on Afghan Refugees-related projects. This part of the loan will stand cancelled by the end of 2,008.
The servicing of the entire Italian debt has, however, been stopped from May 2,006 as agreed upon by the government of Italy. As per agreement signed, the loan under the swap is proposed to be off set in five equal installments (2,009-2,014) commencing from the formal cancellation of first 50 per cent in 2,008.
Ms Khar said the payments eligible for swap operations would be made from budgetary resources of the government and would be spent on jointly agreed social and development projects.
Priority would be given to rehabilitation and reconstruction in the earthquake-hit areas, rural development, poverty alleviation and improvement in education sector, she added.
She said that the pace of increased cooperation with Italy was fast. “We moved fast for promoting bilateral cooperation during the last two years than compared to the previous 20 years.”
The two debt cancellation/swap agreements reached with Italy are in accordance with the joint declaration issued during the July visit of Prime Minister Shaukat Aziz to Italy.—APP
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