LAHORE: Punjab’s outstanding debt stock shot up by 17.3 per cent in the first half of the current financial year to December 2018, primarily on the back of significant exchange rate losses as the rupee nosedived by 14.3 per cent from 121.3 to a dollar to 138.6 a dollar during this period.

The provincial debt spiked by a whopping Rs120.5 billion to Rs813.2 billion with the exchange rate losses causing 83 per cent – or equal to Rs100 billion – of the net growth in the stock. The remaining increase came from new foreign loans of Rs20.5 billion received by the province during the six months, according to a provincial debt bulletin. On the whole, the provincial external debt has risen by 18 per cent to Rs803.4 billion or $5.7 billion, forming almost 99 per cent of the entire stock as domestic loans stood at Rs9.8 billion.

In the same period, the provincial government reduced its domestic debt liability by 10 per cent to Rs9.8 billion ($70 million). The outstanding debt stock does not include the government guarantees of Rs75 billion awarded to different provincial projects and entities.

The principal repayment and interest is estimated to cost the Punjab government Rs47.1 billion or a fifth of the planned development spending by the end of this year. The government has already spent Rs19.65 billion on debt servicing in the first half of the present financial year. The debt payments to be made during the second half are projected to be Rs27.5 billion. Total outstanding debt as a percent of the average provincial revenues of last three years is calculated to be 64.7 per cent and servicing (principal repayment and interest cost) close to 5.3 per cent of the provincial GDP.

With respect to Punjab`s provincial GDP, the ratio of outstanding debt stock stands at 4.30 per cent. The debt stock includes loans of $1.97 billion provided by the World Bank’s International Development Agency (IDA), $1.7 billion by the Asian Development bank (ADB) and Chinese loan of $1.2 billion for the Orange Line Metro Train project in Lahore.

Singapore team: The visiting Singapore businessmen on Friday held meetings with their Pakistani counterparts at the Lahore Chamber of Commerce and Industry (LCCI) to explore trade and investment opportunities in Pakistan.

The Singapore investors, mostly representing small and medium enterprises (SMEs), representing sectors such as construction, oil and gas, agriculture, livestock, chemicals, plastic and rubber, logistics, packaging, power, marble, halal food and so on expressed keen interest in participating in projects being undertaken around the multi-billion dollar China Pakistan Economic Corridor (CPEC).

Bilateral trade between the two countries stands at almost $1 billion that shows the potential to increase it significantly in 5 to 10 years.

Head of the delegation Shamsher Zaman, who is also Singapore’s ambassador to Jordan, said this was the first-ever huge business delegation from Singapore visiting Pakistan to identify areas where their companies could invest.

“Interaction between business communities of the two countries can greatly help Pakistan learn from the experience of Singapore. It is important that the cooperation between the Pakistan and Singapore business community is formalised.”

He said Pakistani businessmen should develop sustainable liaison with Singapore companies to sell trade and investment opportunities in their country.

“Pakistan is a big market with over 200 million people, that is why the businessmen of Singapore have keen interest in this country.”

LCCI President Almas Hyder said Singapore could be rated as the best model country for the whole Asia.

“It takes a lot to become a highly developed and successful free-market economy. Maintaining corruption-free environment, keeping prices stable, and sustaining per capita GDP higher than most of developed countries speak itself about the governing system and economic planning you have in Singapore.”

He said the Pakistan government was committed to ensure business-friendly environment for the foreign investors in almost all spheres of the economy.

“Special eEconomic zones are being established under the CPEC and friends of Pakistan are initiating a number of mega projects here.”

Published in Dawn, March 2nd, 2019