‘Pakistan owes $11.547b debt of Paris Club’

ISLAMABAD: Pakistan owes total debt of Paris Club to the tune of $11.547 billion, out of which outstanding bilateral loan of France stood at $1.748 billion, the official data shows. Islamabad had to pay millions of dollars to France alone per annum on account of amortization in shape of both principal and mark-up of loan amounts over the medium term.

France is the Secretariat of the Paris Club countries and possesses a lot of influence over this forum. There are a total 17 members of the Paris Club countries and France is the second largest bilateral donor after Japan. The total outstanding bilateral loan of Paris Club stood at $11.547 billion out of which Japan is the largest bilateral donor with outstanding loan amount of $5.8 billion and then France with outstanding loan of $1.748 billion.

One independent economist, who knows this subject, told this scribe on condition of anonymity because of sensitivity of the issue that Prime Minister Imran Khan suggested that all Muslim countries on level of OIC bloc should boycott French goods to make this campaign effective because if Islamabad made any efforts unilaterally, it would never become so much effective. He said that in order to analyse economic relations with France, there is a need to analyse the situation on the ground. If the whole Muslim Ummah gets united, then an effective campaign to boycott the French goods could be launched, he added.

The official data available with The News showed that Pakistan had to repay on account of amortization of debt to France in the range of $9 million during the current fiscal year, $165 million in next fiscal year, $80 million in fiscal year 2022-23 and total $335 million over the next couple of years.

On account of net Foreign Direct Investment (FDI), Pakistan has received in the range of $0.941 million to $35.441 million during the last five years, it is learnt.

France has made total investment of around $1 billion in the last 12 years. The data of net FDI showed that the French companies made substantial investment in different sectors of Pakistan’s economy over the period of last 10 years.

According to the official data available with The News, Pakistan received net FDI in different ranges in last 10 years as net FDI from France stood at $17.9 million in fiscal year 2010-11, $-0.536 million in 2011-12, $27 million in 2012-13, $96.257 million in 2013-14, $-214.948 million in 2014-15 and $97.729 million in 2015-16. In the last five years, Pakistan received net FDI from France in the range of $35.441 million in fiscal year 2016-17, $6.825 million in 2017-18, $12.373 million in 2018-19, $-1.169 million in 2019-20 and $0.941 million in first eight months (July-Feb) period of the current fiscal year 2020-21.

Pakistan’s exports in the range of $22 to $23 billion on per annum basis and half of exports went to European Union (EU), including France. The EU comprises 27 member countries and France is the top among the comity of 27-member bloc for importing Pakistani products, including textiles.

The European Union is Pakistan’s largest export partner. This is because Pakistani products have duty free access in all 27-member states of the European Union (EU) on 91 percent tariff lines under EU’s “Special Incentive Arrangement for Good Governance and Sustainable Development”, known as GSP Plus, since 1st January 2014. The Third Biennial Review of the GSP Plus (2018-2019) successfully concluded in March 2020 and this facility will continue for Pakistan. The Fourth Biennial Review of the GSP Plus (2020-2021) has formally commenced and the next EU Monitoring Mission to Pakistan is expected later this year after the Covid-19 crises has abated. As a result of this arrangement, Pakistan’s total trade volume to the EU has increased from $11,960.59 million in 2013-14 to US$14,158.29 million in 2018-19.

The exports to the EU reached US$5922 million during July-March FY2020 as compared to US$5,736 million in the corresponding period last year, with a growth of 3.8 percent. The imports from the EU reached US$3,328 million during July-March FY2020 as compared to US$3,747 million in the corresponding period last year, with a negative growth of 9 percent.

The experts stated that on the basis of bilateral outstanding loan, net FDI and Pakistan’s exports to EU and France, now the policy makers can finalise an informed decision to boycott the French products in an effective manner.

The experts, who possessed experience for dealing with these countries, said that Pakistan should not consider France as standalone country because if the French ambassador was ousted, they would deal it as a move against the whole European Union (EU) having members of 27 countries in its fold. The EU members might prefer to call back their ambassadors in phases to show their muscle.