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Pakistan had to pay $123b as cost of war on terror
September 14, 2017
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ISLAMABAD: Pakistan has received $67 billion from all multilateral and bilateral creditors in the shape of total loans and grants since 9/11, 2001 but Islamabad had to bear the cost of over $123 billion after becoming a US ally its war against terrorism.

A major chunk of dollar inflows were provided to Pakistan as loans which the Pakistani nation would have to pay back with interest rate while only $10 billion were provided as grants during the last 17 years.

At a time when US President Donald Trump was threatening Pakistan, there was a need to analyse the total dollar inflows in detail.

Pakistan received on average $750 to $800 million as net transfers on annual basis in the shape of foreign loans and grants from all multilateral and bilateral creditors during the last 17 years under both military and democratic regimes.

According to official data prepared by the Economic Affairs Division, the total disbursement of foreign economic assistance (FEA) including all loans and grants from all creditors stood at $67 billion from 2000-01 to 2016-17.

On an average, the disbursement of loans and grants stood at $3.5 billion annually, while average repayments stood at $2.7 billion during the last 17 years, indicating that the annual net transfer and inflows from the World Bank, ADB, IDB and all major donor countries, including the US, UK, Japan, Saudi Arabia and others, stood at just $750 to $800 million annually.

During the Musharraf regime in 2000-2001, all multilateral and bilateral creditors disbursed $2.471 billion in the shape of loans and grants to Pakistan and Islamabad paid back $2.099 billion including $1.348 billion as principal amount and $752 million as interest repayment. Therefore, the net transfer of FEA stood at just $372 million during this year.

The donors disbursed $3.236 billion loans and grants during 2001-02 and Islamabad paid back $1.783 billion, including principal amount of $1.178 billion and interest repayments of $605 million, showing net transfer of foreign assistance of $1.453 billion.

It was the fiscal year 2002-03 when the donors disbursed $1.922 billion for Pakistan’s economic assistance and Islamabad paid pack $1.827 billion including principal amount of $1.159 billion on account of loan and $668 million interest payment, showing that the net transfers to Islamabad stood at just $95 million.

There was one financial year 2003-04 during the Musharraf regime when Pakistan paid back more and got less foreign assistance as the country received $1.5 billion disbursement of loans and grants but paid back $3.460 billion in the shape of $2.721 billion as principal amount and $739 million interest repayment, so the net transfer was negative $1.960 billion.

In fiscal year 2004-05, the donors disbursed $2.738 billion loans and grants for Pakistan and the country paid back $1.747 billion, including principal amount of $1.072 billion and interest repayment of $674 million, indicating that the net foreign assistance stood at $991 million.

Pakistan received gross foreign assistance of $3.394 billion during 2005-06 but Islamabad paid back $2.163 billion, including $1.446 billion as principal amount and $716 million as interest repayment so the net transfer stood at $1.231 billion.

The donors disbursed $3.410 billion during fiscal year2006-07 and Islamabad paid back $2.025 billion including principal amount of $1.203 billion and interest repayment of $822 million so the net transfer to Islamabad was standing at $1.385 billion.

In financial year 2007-08, the donors disbursed $3.798 billion as loans and grants but got back $2.116 billion as debt servicing including principal amount of $1.113 billion and $983 million as interest repayments.

During the Musharraf regime from 2001 to 2008, the donors had disbursed gross amount of $22.469 billion as loans and grants but the country had to paid back $17.220 billion as debt servicing including $11.260 billion as principal amount and $5.595 billion as interest repayments so the net transfers of economic assistance to Islamabad was just standing at $5.249 billion.

During the tenures of democratic regimes, starting from 2008-09 the donors disbursed $4.885 billion to Pakistan while the country paid back $3.439 billion as debt servicing including $2.566 billion as principal payment against loans and $873 million as interest repayments so the net transfers stood at $1.446 billion.

Internews

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