"US writes off over $495m Pak debt"

ISLAMABAD: The United States wrote off $495.3 million bilateral debt that Islamabad owed to Washington in an agreement here on Friday.

"This final instalment of debt cancellation marks an evolutionary transition from stabilisation assistance to participation in Pakistan’s economic take-off and sustained development," US Ambassador to Pakistan Nancy Powell said after signing the agreement with Dr Waqar Masood Khan, Secretary Economic Affairs Division (EAD). She ruled out more debt relief.

In the post-September 11 period, the United States has helped Pakistan by agreeing to the Paris Club terms under the stock of the debt operation, which paved the way for writing off the $1 billion debt in April 2003, and finally another half a billion dollar to reduce the bilateral US debt from $3 billion to about $1.6 billion, according to the EAD. However, the US administration has only waived off concessional loans borrowed under the Official Development Assistance (ODA). These loans, with a weighted average cost of just 2.54 per cent, were repayable in 38 years, leaving their Net Present Value (NPV) at just $200 million. The US administration approved these funds in its 2004 budget, as part of an overall package of $395 million.

Full Article : jang.com.pk