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East-West Debt march 2003 news, update : PAKISTAN
Pakistan Pakistan and the Asian Development Bank (ADB) signed an agreement to reduce poverty by half by the year 2011. The agreement supports Pakistan's long-terms goals of (1) attaining universal primary school enrolment, (2) reducing the population growth rate to less than 1.6%, (3) decreasing infant mortality rate to less than 30 per 1000 births, and (4) increasing the average life expectancy to at least 69 years. The ADB is committed to give $2.4 billion during 2003-2005 period. The ADB has earlier provided project and program loans worth about $800 million to Pakistan in 2001. Pakistan remains a heavily indebted country despite rescheduling some of its Paris Club debt. Although Pakistan implemented very tight macroeconomic policies, that have already led to compression of imports and to a fall of current account deficits, the country's external capital requirements remain large. Projections of current balance of payments indicate that in the years 2003-2005, Pakistan will need over $5.7 billion to finance reform under the Interim Poverty Reduction Strategy Paper. Pakistan's total external public and publicly guaranteed debt stays at $31.4 billion, or 53% of GDP and is expected to rise to $31.7 billion by June 2005. Debt service as a share of foreign earnings is estimated to fall as a result of debt rescheduling from 29% in 2001 to under 22% in 2005. The present value of long-term public and publicly guaranteed external debt to exports fell by 30% to around 230% in fiscal year 2002, and will reach a level close to 210% in 2003-2004, which still is above the indicative level of sustainable debt (150%) for Highly Indebted Poor Countries (HIPC). The debt service to the World Bank as ratio of exports of goods and service stands at 3.5% in 2001 and is below the 6% guideline recommended for the Bank lending. The figure is projected to fall significantly to 2.6% by 2005. The preferred creditor ratio, i.e. debt service to preferred creditors as a ratio of total service, stayed at 45.3% in 2001-2002 and is well above that recommended by the World Bank exposure guidelines.
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East-West Debt has made every effort to ensure the accuracy of this publication. Neither the company nor any contributor can accept any responsibility for -including but not limited to- errors, omissions, opinions or advice given. This publication is not a substitute for professional advice and all information is for guidance only.
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