The Economic Coordination Committee (ECC) of the Federal Cabinet, on Tuesday, considered and allowed the Ministry of Economic Affairs to sign 15 debt rescheduling agreements with various credit countries, finalized under the Debt Service Suspension Initiative (DSSI).
The Ministry of Economic Affairs submitted a summary on the G-20 Debt Service Suspension Initiative (DSSI) during a meeting of the ECC today. The meeting was held under the chairmanship of the Federal Minister for Finance and Revenue, Shaukat Tarin.
To recall, the G-20 Finance Ministers, in their meeting held in April 2020, announced debt relief for IDA eligible countries to mitigate the socio-economic impact of COVID-19, known as DSSI-I. The ECC, in its meeting held on 20 May 2020, approved the proposal and authorized EAD to apply for debt relief and proceed with the signing of the MoUs with the creditor countries (Annex-I).
Pursuant to the ECC decision, Economic Affairs Division entered into negotiations with bilateral creditors. To date, under DSSI-I, 31 debt rescheduling agreements with 19 creditor countries have been signed. Negotiations for the finalization of debt rescheduling agreements with the UAE are currently underway. DSSI-I yielded debt relief of $1,608 million.
The G-20, in their meeting held on 14 October 2020, extended the DSSI for six months, i.e., January-June 2021, known as DSSI-II (Extension). The ECC, in its meeting dated 20 November 2020, authorized EAD to proceed with modalities for debt relief under the DSSI-II (Annex-III). So far, 29 debt rescheduling agreements with 13 creditor countries have been signed. Negotiations for the finalization of debt rescheduling agreements with Russia, UAE, and the USA are ongoing. DSSI-II yielded debt relief of $1,130 million (Annex-IV).
The G-20 Finance Ministers,, in their meeting held on 7 April 2021, extended debt relief for a further and final period of six months (Jul-Dec 2021), known as DSSI-III (Final Extension). The ECC, in its meeting dated 09 June 2021, authorized EAD to proceed with modalities for debt relief under the DSSI-III (Annex-V). So far, 19 debt rescheduling agreements with five creditor countries have been signed.
Negotiations for the finalization of debt rescheduling agreements with Belgium, Italy, Japan, Russia, Spain, the UK, and the USA are ongoing. Debt relief under the DSSI-III is around $950 million (Annex-VI). Six (06) agreements for DSSI-II with Italy, Japan, and the UK have been negotiated and finalized (Annex-VII). Eight (08) agreements for DSSI-III with Austria, France, Korea, Netherlands, Sweden, and Switzerland have also been negotiated and finalized, and one (01) combined agreement for DSSI-I, DSSI-II, and DSSI-III with Saudi Arabia has also been finalized.
Foregoing in view, approval of the ECC was solicited for signing 15 debt rescheduling agreements with various creditor countries.