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National

June 14, 2018

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Pakistan having commitment of 4pc grant, 96pc loans

ISLAMABAD: At a time of depleting foreign currency reserves, Pakistan has been obtaining commitment of only 4 percent for grants and 96 percent for foreign loans from all multilateral and bilateral creditors thus plunging the country into debt trap with surge in debt servicing and posing threats of default with every passing month. According to official documents, the Economic Affairs Division (EAD) maintains systematic record of commitments and disbursements in the shape of “Status Report on Commitments and Disbursements of Foreign Economic Assistance”. Total commitments of foreign economic assistance by the various donors amounted to $17.400 billion during FY 2015-16. It includes: (a) Grants amounting to US $682 million; and (b) Loans amounting to $16.718 billion. Commitments from bilateral sources were higher than that of the multilateral sources. Bilateral sources committed an amount of $10.021 billion while commitments from multilateral sources were $5.431 billion. Similarly $500 were committed for bonds and $1.448 billion by commercial banks during the FY 2015-16. The break-up of commitments showed that $5.431 billion from the multilateral sources consisted of US $480 million grants and US $4.951 billion loans. In the multilateral group, ADB with commitments of US $1.961 billion was the largest contributor. Other major contributors were World Bank [$1.699 billion] and IDB [US $1.338 billion]. The commitments of $10.021 billion from the bilateral sources consisted of US $203 million grants and US $9.818 billion loans. In the bilateral group, China with commitments of US $9.427 billion was the largest donor. Other major donors were Japan [US $148 million], Saudi Arabia [US $109 million] and Germany [US $101 million]. Project Vs Non-Project Commitments: The commitments for the Project Aid were higher than that for the Non Project Aid and amounted US $12.325 billion and US $5.075 billion respectively.

The commitments were made in different sectors of the economy, like Energy/Power, Education, Agriculture, Transport & Communications, Health, Rural Development, Physical Planning and Governance. Sector-wise commitments of Project Aid during the period under review are tabulated below:

The share of multilateral and bilateral sources was 51% and 24% respectively whereas the Bonds and commercial banks contributed 7% and 18% respectively of the total disbursement; 31% disbursements from the bilateral sources came in the shape of grants while 69% were loans.

The disbursements from the multilateral sources were also dominated by loans which were about 98% of total disbursements from multilateral sources.

In the bilateral group, major disbursements were from China [US $1,056 million], UK [US $365 million], USA [US $160 million], Japan [US $120 million] and Kuwait [US $52 million]. They contributed more than 90% of total disbursements of the bilateral sources ie amongst the multilateral agencies, ADB, WB & IDB disbursed over US $1000 million each. They contributed about 98% of total disbursements of the multilateral sources.

Disbursements of Non Project Aid were higher than that of the Project Aid. Disbursement of Non-Project Aid and Project Aid amounted to US $5,398 million and US $2,153 million, respectively. In the Non Project Aid, highest disbursements were for Budgetary/Balance of Payments support followed by Commodity Aid and K. Lugar; a summarised position of purpose-wise disbursements during FY 2015-16 is tabulated below:

Disbursements were made in different sectors of the economy. Major sectors were Energy/Power, Transport and Communication, Education and Training, Agriculture, Rural Development and Poverty Reduction, Health & Nutrition, Floods and Governance.

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