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assures Pakistan of immediate debt relief By Our Staff Reporter 21st October, 2001. US Under-Secretary for Economic Business and Agriculture Affairs Alan Larson announced here on Sunday that Washington would extend an "immediate and sustainable debt relief" to Islamabad. "We are working out modalities to provide meaningful, immediate and lasting debt relief to Pakistan that maximizes opportunities and lay foundation for trade and investment relationship," Mr Larson said at a joint press conference with Finance Minister Shaukat Aziz after their talks. Asked whether the US was working to waive Pakistan's debt as had been done in case of Egypt at the time of the Gulf War, the under-secretary without giving a direct answer said: "Washington is in consultations with Islamabad and other creditors to tailor a programme for Pakistan that fits its needs, interest, and its debt profile". The US, he said, was trying to be flexible about the modalities so that "the relief is immediate, lasting and has a sustainable approach to Pakistan's debt Mr Larson said he had come to Pakistan on the directive of President George W. Bush for developing long-term cooperative arrangements with Pakistan. The US, he said, wanted to facilitate the government and the people of Pakistan to become a growing economy that could produce benefits and jobs to its people. Mr Larson said he had discussed with Mr Aziz ways to put together a sustainable package of measures so that Pakistan could get support from international financial institutions and other bilateral donors, and debt relief package as well as market access to promote private investment. During the past few weeks, he pointed out, the US government had moved for normal economic relations with Pakistan. "The United States is actively supporting Pakistan's negotiations for a new agreement with the IMF. Islamabad has good relations with the World Bank and the Asian Development Bank, and Washington is supporting (Islamabad) for increased access to resources of these institutions." He said the US government was looking at new measures to increase access of Pakistani products in US markets. As an immediate step, he said, the US restoring some of the benefits under the General System of Products and was working with Congress to extend new GSP benefits for certain products. The US was committed to remove quotas on textile-related products. In addition, they were working with Congress to consider ways to stimulate Pakistan's major exports. Mr Larson said the Overseas Private Investment Cooperation had extended a line of credit of $300 million and added that the US Export and Import Bank was also considering a number of projects to promote business relationship. He recalled that the US had already decided to provide $30 million in food assistance to Pakistan and was working in a number of areas, including border security and law enforcement programme. Mr Aziz said Pakistan was in bilateral discussions with donors for fiscal support, revival and enhancement of aid, debt relief, market access, etc. He said he had substantive talks with Mr Larson on various issues, particularly the debt relief. The debt profile of Pakistan, he said, was quite heavy, affecting the budget. Pakistan needed a fiscal space to use the money to pursue development projects. The minister said the debt relief would enable Pakistan to undertake more infrastructure projects, particularly water reservoirs for agriculture sector. He said the government had initiated discussions with the American Exim Bank to revive the PIA fleet. The debt relief that Pakistan was contemplating would be such that it would be under the auspices of Paris Club which is expected to meet in December. He said the government was holding negotiations with the IMF after which Paris Club would be moved. In reply to a question, the finance minister said that as a result of the Afghan situation the loss to Pakistan's economy would be between $1 billion and $2.5 billion, depending on the duration of the crisis. He said the government was negotiating with international underwriters to get insurance rates reduced. "We see no justification for increase in insurance rates," he said, adding that Arabian Sea today was safer than ever before, and therefore, insurance rates should not be increased. He also said that the US Exim Bank would extend finances to American investors to invest in Pakistan's energy and power sector. |
