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Last updated: Friday 23 Dec, 2005-12.30 P.M (PST)



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Total external foreign debt and liabilities squeezed to $35.675 billion by September 30, 2005 as against $35.834 billion in 2004-05

Dec 05 - 11, 2005

Pakistan's foreign debt and foreign exchange liabilities have slightly declined by $159 million in the first three months of the current fiscal.

Total external foreign debt and liabilities squeezed to $35.675 billion by September 30, 2005 as against $35.834 billion in 2004-05.

In its latest report on Pakistan's External Debt and Liabilities, SBP has pointed out that total external debt of the country declined to $33.918 billion by September 30, 2005, from $34.037 billion in June 2005, while foreign exchange liabilities amounted $1.757 billion.

According to the report the public and publicly guaranteed debt stood at $30.982 billion by September this year as against $31.084 billion on June 30, 2005.

The private non-guaranteed debt amounted to $1.381 billion, debt owed to International Monetary Fund remained at $1.555 billion.

The medium and long-term Paris Club debt had been calculated at $12.76 billion by September this year, $15.465 billion foreign debt belonged to multilateral donor agencies, $1.264 billion Euro bonds/Saindak Bonds and rest foreign debt belonged to commercial loans, $137 million military debt, etc.

It was learnt that since financial year 2002-03, the foreign debt and liabilities are hovering little over $35 billion. In 2002-03, the foreign debt and liabilities stood at $35.474 billion, which dropped to $35.258 billion in 2003-04, but slightly increased to $35.834 in 2004-05.

Details obtained by this scribe showed that in the last four financial years, Pakistan has paid $18.91 billion worth external loans, which include the payment of $3.90 billion mark-up on foreign loans.

In FY02 Pakistan paid $6.327 billion, $4.349 billion foreign loans were paid in FY03; $5.274 billion in FY04 while $2.965 billion foreign loans were paid in FY05.

Foreign debt repayment in last fiscal year has dropped by $2.309 billion as against the preceding fiscal 2003-04.

In 2004-05, the country has paid $3.965 billion worth total foreign debt, including mark-up, while in 2003-04 the external debt repayment amounted to $5.274 billion.

An official of Finance Ministry said that in 2003-04, the federal government prepaid $1.60 billion expensive debt to the Asian Development Bank and some other donor agencies, excluding the World Bank, as a result the overall quantum of foreign debt repayment remained well over five billion dollars in 2003-04.

He said that in 2004-05, the federal government intended to further retire the expensive debt, but unprecedented increase in the world oil prices, imports and trade imbalance caused extraordinary burden on the foreign exchange reserves of the country.


The bidding date of Pakistan State Oil (PSO) would be decided by mid-December this year.

"The Privatisation Commission is holding a pre-bid conference in next three weeks with the PSO bidders and during this meeting the PSO bidding date would be decided," Federal Minister for Privatisation and Investment Dr Hafeez Sheikh told newsmen after attending the launching ceremony of the book titled "Nestle in Pakistan 1988-2004".

Managing Director Nestle Pakistan Roland Decorvet, Senator Sartaj Aziz, Syed Babar Ali, a renowned industrialist and Suleman Ghani, Chairman Punjab Planning and Development Board also spoke at the book launching ceremony to highlight the role of Nestle in Pakistan and potential of milk sector's growth.

He also disclosed that five mega units like Pakistan State Oil (PSO), Pakistan Petroleum Limited (PPL), Pak-American Fertilisers Limited, Pakistan Steel Mills and National Investment Trust are at an advanced stage of privatization.

The Minister, however, did not respond to the newsmen's questions pertaining to ongoing talks on PTCL post-privatisation scenario.

"I can only say that the issue will be resolved amicably," said the minister.

He did not disclose about his upcoming visit to Dubai to further discuss the PTCL issues with the high-ups of the Etisalat.

The Minister further said that the investment climate has improved very much in Pakistan in the last few years. He said that in 2004-05 the inflow of Foreign Direct Investment has reached 1.52 billion dollars as against less than half a billion dollars three years back.

He also said that the Initial Public Offerings of state-run companies have attracted overwhelming response from investors and general public, showing great participation of the common man in the privatization process of the country.

Talking about Nestle Pakistan, he said that the company was one of the several corporate sector success stories in the country.

He said that very few people abroad know that more than 600 multinational companies are doing business in Pakistan.

"We should tell the foreigners and countrymen about the success stories such as Nestle Pakistan to improve the image of corporate sector in Pakistan," he added.

He proudly said that Nestle is operating in 154 countries in the world, but its growth in Pakistan is the highest and fastest than other countries.

"I tell the people that Pakistan is a good place for investment, doing business and earning money," he added.

He said that the privatization process in the country has moved forward at a very rapid pace in last few years. The annual amount of privatization has reached near 300 billion rupees this year while a few years back, the annual quantum of privatization income was around just six billion rupees.

This trend shows that the privatization programme of the country was expanding very fast, supporting the overall economic stability, involvement of private sector in public entities and creation of new job opportunities.

He also pointed out that the Privatisation Commission has sold in the recent months Karachi Electric Supply Company, National Refinery Limited, Mustehkam Cement, Pak-Arab Fertilisers and has lined up more mega units to carry on the privatization process.

The Privatisation and Investment Minister, however, did not disclose as to how much public units would be privatized by December this year.

"I cannot give any deadline of sell-off of the public units, because you people (journalists) first write about the deadline and again write about missing of target or deadline," he said.


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