ISLAMABAD - Pakistan has been included in the group of countries to be entitled to debt relief as part of the G20 debt relief deal.

In application of the term sheet of the Debt service suspension Initiative (DSSI) also endorsed by the G20, the Paris Club recognised that the Islamic Republic of Pakistan is eligible to benefit from the initiative.

Therefore, the representatives of the Paris Club Creditor Countries have accepted to provide to the Islamic Republic of Pakistan a time-bound suspension of debt service due from 1st May to 31st December 2020.

The Government of the Islamic Republic of Pakistan is committed to devote the resources freed by this initiative to increase spending in order to mitigate the health, economic and social impact of the COVID19-crisis. The Government of the Islamic Republic of Pakistan is also committed to seek from all its other bilateral official creditors a debt service treatment that is in line with the agreed term sheet.

This initiative will also contribute to help the Islamic Republic of Pakistan to improve debt transparency and debt management. Paris Club creditors will continue to closely coordinate with other stakeholders in the implementation phase of this initiative, in particular when considering a possible extension of the suspension period.

As of today, 30 eligible countries have officially requested from the Paris Club to benefit from the implementation of the DSSI. Among these countries, 12 countries have signed a Memorandum of Understanding with the Paris Club. For these 12 countries, the total amount of 2020 maturities thus deferred to date is around USD 1.1 billion, plus the deferment of pre-existing arrears.

Other countries whose debt service has been suspended include Chad, Ethiopia and the Republic of Congo.  It is worth mentioning here that Pakistan had to pay $1.8 billion out of total $20.7 billion to the 11 countries of Group of 20 rich nations by December this year.

The $1.8 billion amount included $1.47 billion as principal loans and $323 million as interest. Pakistan will have to pay $613 million as Saudi debt and $309 million as Chinese debt, $23 million to Canada, $183 million to France, $99 million to Germany, $6 million to Italy, $373 million to Japan, $47 million to South Korean, $14 million to Russia, $1 million to UK and $128 million to the US.