PESHAWAR: Japan and Pakistan agreed on debt deferral amounting to JPY 40 billion (approximately USD 370 million) for making fiscal space to fight against COVID-19 in Pakistan.
This is in line with the G20 Debt Service Suspension Initiative (DSSI) agreed on April 15, 2020 and the MOU signed between Pakistan and the creditor countries on June 9, 2020, says a press release.
Notes to this effect were signed and exchanged between Matsuda Kuninori, Ambassador of Japan to Pakistan and Noor Ahmed, Secretary of the Ministry of Economic Affairs, in Islamabad on Tuesday.
The concessional loans, which are subject to the debt deferral, have been utilized for infrastructure development such as roads, tunnels, power plants and grids, irrigation, water supply, drainage facilities in Pakistan from the early 1990s to the mid-2010s. These concessional loans have favourable conditions for Pakistan in terms of low interest rate, long grace and repayment period. Ambassador Matsuda said, “After the stability of Afghanistan is realized, I believe some of these projects must be a part of the connectivity between Pakistan, Afghanistan and Central Asia.” Under this agreement, repayments for the debt and interest due between May 1, 2020 and December 31, 2020 will be rescheduled after June 15, 2022.
Economic shock caused by the outbreak of COVID-19 has continued on a global scale. Japan provided Pakistan with direct support of USD 9.5 million and multilateral support of USD 7.41 million to contain COVID-19, as well as the quick delivery of diagnostic kits and non-governmental support, all of which were on a grant basis. International solidarity on the medical and economical front is necessary to fight against infectious diseases with no borders. Ambassador Matsuda added, “This agreement, which we signed today, represents Japan’s solidarity with Pakistan on the economic front.”
Earlier, Special Assistant to Prime Minister on Overseas Pakistanis and Human Resource Development Sayed Zulfikar Abbas Bukhari said on Monday that the country would soon start sending its skilled workforce to Japan under a government-to-government Memorandum of Understanding (MoU) as a recruitment process of many young workers in final stages. He was addressing the signing ceremony of a Memorandum of Cooperation (MoC) between the Overseas Employment Corporation (OEC) and Inter-SES.