0
KARACHI, Oct 29: Pakistan’s external debt and liabilities stood at US$38.4 billion at the end of fiscal year July/June 2000-01 up from $38.2 billion a year-ago.
According to the State Bank’s annual report released here on Monday the volume of external debt was around $34.7 billion whereas external liabilities stood at $3.7 billion at end-June 2001.
In the last annual report SBP had reported external debt and liabilities at $36.7 billion at end-June 2000 but then the government carried out a revaluation that added $1.5 billion to the stock of external debt and liabilities raising the figure to $38.2 billion.
Thus revalued external debt and liabilities rose only by $200 million in fiscal 2000-01.
In order to explain why a $1.5 billion difference arose in the external debt and liabilities in 1999-00 “one must look into how debt stock numbers are calculated,” advises the report. It says that since public and publicly guaranteed debts are in several different currencies these amounts are aggregated and converted to US dollar to report the outstanding debt at particular point in time.
The problem with the debt numbers compiled earlier was that “multilateral disbursements and repayments were being valued at current exchange rates but previous debt stocks had not been revalued accordingly.” Hence, past discrepancies in cross rates were being compounded.”
External debts include (i) public and publicly guaranteed debt ($30bn at end-June 2001); private non-guaranteed debts ($2.45bn); deposits of some central banks with the State Bank ($700 million) and debt obtained owed to IMF ($1.5 billion). External liabilities include fresh foreign currency deposits ($1.5 billion at end-June 2001); frozen foreign currency deposits; special US dollar bonds ($1.4 billion); national debt retirement programme ($150 million) and other liabilities.
DEBT SERVICING: After the international sanctions imposed in mid-1998, Pakistan’s inability to service external debt has led to two consecutive rescheduling by Paris Club members and one from the quasi London Club.
But despite this rescheduling, Pakistan has made debt payments from its own resources amounting of $3.2 billion and $3.7 billion in fiscal year 1999-00 and 2000-01 respectively. If servicing of external liabilities is included, the total payments made out of its own resources were $3.8 billion and $5.1 billion in 1999-00 and 2000-01. And this has happened despite the fact that whereas relief from debt rescheduling and rollover fell only to $2.8 billion in fiscal 2000-01 from $4 billion in 1999-00.
“Such large payments and accumulation of net reserves to the level of $1.7 billion by end-June 2001, should dispel the popular view that Pakistan has to rely mainly on rescheduling from sovereign and commercial creditors to manage debt servicing.
“As a matter of fact rescheduling only accounted for 35 per cent of total debt service obligations.”
