ISLAMABAD: Ruling out possibility of any rescheduling of foreign debt under Paris Club arrangement with the blessings of USA, Pakistan might see positive movement on release of pending funds of $9 billion from USA in shape of Coalition Support Fund (CSF). But this could only happen if truce in Afghanistan struck successfully as Washington is expecting some ‘positive outcome’ by September 2019.
Although, the US administration had proposed no funding for release of CSF funding for Pakistan in its proposed budget for 2019-20 which was currently under consideration before Congress but in case of successful completion of peace talks at Doha and signing of pact among different Afghan stakeholders, the Trump administration could propose amendment for restoring military aid for Pakistan. The restoration of military aid might also pave the way for release of pending CSF bills ranging up to $9 billion.
It will not be favour to Pakistan because these are expenditures already incurred to flush out extremists from the adjacent areas of Afghanistan but the pending bills even after reconciliation were not cleared by USA despite passing of several years.
In the aftermath of meeting held between Donald Trump and Imran Khan on Monday in Washington DC, Pakistani authorities were arguing that Washington could move ahead on clearing pending bill to the tune of $9 billion in a phased manner. The US President Donald Trump had given some indication when stated that the US assistance was stopped when Pakistan was not helping USA, pinning hopes that it might consider to resume per annum assistance both for military and civilian assistance.
This scribe talked two key policy makers on economic front and both were unanimous that there was no discussion held on possibility of rescheduling of foreign loans from Paris Club as was done in the past during the era of former military ruler Gen (R) Pervez Musharraf in 2001-2 when he had decided to stand with US in its war against terror. But now authorities say that it involved
many complications and they did not see it feasible at this point of time.
When contacted to former secretary finance Dr Waqar Masood who had spearheaded campaign of signing deal with different Paris Club countries separately while serving as then secretary EAD, said that the Paris Club rescheduling of $12 billion at that time was quite crucial because the size of economy stood at $84 billion. Now the size of economy had increased manifold so its importance also decreased.
However, the official sources argued that the military and civilian aid could be resumed provided peaceful settlement struck at Afghanistan. Without effective role of Islamabad the possibility of signing any durable truce is not possible.
In September 2018, the Trump administration had blocked $300 million amount on account of reimbursement of Coalition Support Fund (CSF). Over $9 billion claims of Islamabad were still pending before US administration on account of CSF. Pakistan’s Ministry of Finance has incorporated zero funding from the USA in shape of reimbursement from CSF during the current fiscal year’s budget for 2019-20.
After becoming an ally of US-led war against terror in 2001-2, Pakistan and US had placed mechanism for reimbursement of bills amount after launching military offensive against terror networks.
During this period, Islamabad had received $14 billion from US on account of CSF, said one top official of Finance Division and added that over $9 billion claims were still pending before Trump administration. “Even reconciled amounts were not yet fully paid up by US,” said senior official and added that Washington provided peanuts to Pakistan so far on this front.
Another official said that Pakistan had to bear expenses of war on terror after borrowings from domestic and foreign lenders keeping in view yawning financing of budget deficit on which the government had borne interest rate which was paid with taxpayers money.
Pakistan had incurred direct and indirect losses to the tune of $126.79 billion equivalent to Rs10,762.64 billion from 2001-2 to 2017-18. In the last Economic Survey 2018-19, the government did not incorporate any figures on account of losses after becoming an ally of USA in its war against terror.