ISLAMABAD, March 25: The government has finalized a strategy to repay the $15 billion multilateral debt as early as possible, and $2.5 billion to $3 billion of such loan, which is the most expensive debt, will be paid off on a priority basis.

Official sources told Dawn on Tuesday that an 88 page document had almost been completed in this regard indicating “thousands of small and bigger loans” to be paid off to lessen the huge debt burden.

The government plans to start paying off $200 million to $300 million every year in addition to what its usually pays to clear the debt.

The newly created ‘Debt Coordination Office’ headed by Director-General Dr Ashfaque Hasan Khan is working out details about interest rates, maturity dates and terms and conditions of foreign loans.

When contacted Dr Khan, who is also economic adviser to the ministry of finance, said that not all foreign loans could be retired before time and that it all depended on lenders. “Only those debt can be retired which has loan re-payment clause,” he said, adding that $15 billion loans contained both expensive and inexpensive debt.

In reply to a question, he said the coordination office was identifying thousands of foreign loans which would be retired regularly.

The country’s total external liabilities, including private non-guaranteed debt and short-term foreign exchange liabilities, declined from $37.9 billion as of end-June 2001 to $36.5 billion by end-June 2002. “This has been achieved through a policy of paying off high-cost short-term foreign exchange liabilities in order to lower the country’s external debt servicing liability,” the director-general said.

He said short-term foreign exchange liabilities, mainly comprising foreign currency accounts, Special US$ Bonds and other foreign currency bonds, were reduced from $5.7 billion to $3.1 billion over the period.