Amidst increasing fears over the government’s move to hide its actual debt burden, the government claimed earlier yesterday that external public debt stood at $53.1 billion– an amount which is roughly $15 billion less than that shown in IMF documents.
Finance Minister Ishaq Dar in a written reply to the Senate stated that the external public debt stood at $47.8 billion when the present government came into power.
“The debt has been increased to an amount of $53.1 billion as of end-January this year”, according to the written statement.
According to the minister, the value of foreign loans received by the government during the last three years stood at $20.8 billion out of which it repaid $12.9 billion during last three years. A major chunk of $5.8 billion was repaid in 2013, $4.1 billion in 2014 and the remaining $3.1 billion in the last year.
In what appears to be a gimmick, the government said that the average cost of borrowings of $20.8 billion stood at 1.62% in 2013, 1.72% in 2014 and 1.92% in 2015. It did not separately mention the borrowing cost of dollar-denominated Euro Bonds that the government floated at extremely high rates in the range of 7.25% to 8.25%.
However, the $53.1 billion external debt amount that the government mentioned in its statement does not truly reflect the actual debt burden. A latest IMF report puts the external debt burden at around $68 billion.
The government has excluded non-plan loans and publically guaranteed debt from the definition of external public debt. For instance $6.4 billion loan contracted for Karachi Nuclear Power Plants is not included in the external debt. Out of which over $1 billion has already been obtained but is not included in the $53.1 billion.
Similarly, in its debt statement for 2015-16, issued last month, the government also tried to hide the rapid growth of external debt and liabilities in comparison to its foreign exchange earnings by excluding liabilities.
