Pakistan included in G20 debt relief plan

The World Bank and the International Monetary Fund (IMF) had urged the G20 grouping to extend debt relief to the poorest countries to help them free their resources and use them for the COVID-19 challenge.

The G20, on Wednesday, made this decision to include all countries grouped under the World Bank’s International Development Association (IDA) to be eligible for the debt relief plan. There are 76 countries in the IDA list and Pakistan is one of them. The G20 worked with a grouping of African countries as well as the multilateral lenders IMF and WB to decide on the terms of the debt relief.

The suspension period for debt relief will start from May 1 and continue till Dec 1, 2020. All debt service falling due in this period will be packaged into a new loan on which the payments will not start until June 2022. Then it will be paid over the subsequent three years. A standardized term sheet has been made for all the payments clubbed under the relief plan.

In this time, the G20 countries will consult with the IMF and World Bank if the suspension should be extended to June 2021 or not, depending on how the COVID-19 situation turns out then.

According to the IMF report, Pakistan has $12.731 billion of external debt repayment obligations in FY2021 that could be subject to consideration under the G20 debt relief plan.

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