The United States has provided Pakistan with a total of $128 million in debt relief in 2020, as part of the G20 Debt Service Suspension Initiative (DSSI).
Much of that debt relief has been necessitated by the rampaging COVID-19 pandemic. According to the US Embassy in Pakistan, it is efforts like these that enable the two countries to work together against the viral disease.
“Under the G20 Debt Service Suspension Initiative, the U.S. provided $128 million in debt relief to Pakistan in 2020. Through efforts like this, the U.S. and Pakistan are working together to redirect critical resources to the COVID19 pandemic response,” the US Embassy Islamabad tweeted today.
Having gained approval back in April of this year, the DSSI was created with the aim of offering temporary suspension of “official sector” or government-to-government debt payments to 73 countries around the world, including Pakistan.
Since we are talking about “suspension” of debt payments, that means that the payments haven’t been cancelled; they have simply been delayed keeping the current COVID-19 situation in mind. A repayment period of five years, with a one-year grace period, have been offered instead.
The G-20 Finance Ministers and Central Bank Governors in their meeting held on October 14, 2020 had announced extension in the DSSI for further period of six months, ie, January-June 2021. This would bring additional debt relief of $800-900 million depending upon exchange rate and interest rate variation.
According to various media reports, Pakistan was expecting to receive a total of $1.8 billion temporary debt relief from the G20 member countries if agreements with them were reached.
The following is a breakdown of how much relief Pakistan can avail from the following countries:
Saudi Arabia: $613 million
China: $309 million
Canada: $23 million
France: $183 million
Germany: $99 million
Italy: $6 million
United Kingdom: $373 million
United States: $128 million