Friday, December 24, 2010

Pakistan may lose $233m loan from Japan

Pakistan may lose $233m loan from Japan

Pakistan may lose $233 million highly concessional loans from Japan in current fiscal year owing to Ministry of Law’s inability to accomplish the process of vetting of draft agreements well on time, The News (a local newspaper) has learnt reliably.

Tokyo had offered two loans worth $233 million to Pakistan with mark up of 0.01 percent, repayment period of 35 years and grace period of 10 years, but the Pakistani authorities have so far remained unable to move towards completing the required procedural requirements mainly because of undue delay in vetting of agreements that falls into the jurisdiction of Ministry of Law.
Pakistan’s economic managers are running from pillar to post for obtaining budgetary support from external avenues and $60 million out of total $233 million with such a highly exceptional mark up is becoming unavailable because of inability of the concerned ministry under dispensation of PPP-led regime.
The issue of undue delay, the sources said, forced the economic ministries to bring this matter into the notice of President Zardari after which one key consultant assigned for vetting was shown the door in the recent past. But even after that development, there was no improvement in the working of the Law Ministry probably because of capacity constraints that also aggravated, as Law Minister Dr Babar Awan had given instruction by binding his subordinates to clear all files when he would personally read everything. Japan, the sources said, has already conveyed in plain words to Pakistani side that the loans agreements having approval of the federal cabinet should be completed till December 31, 2010, but upon the request of Islamabad’s authorities, they agreed to extend the deadline to January 15 to fulfil all procedures.
The official documents available with The News (a local newspaper) disclosed that the agreement for Flood Disaster Emergency Import loan worth $60 million related draft was forwarded to Law Division on November 24, 2010 and subsequent reminders were also dispatched on December 2, 2010 and December 8, 2010. “Almost one month was already passed and there was no sense of urgency in the economic ministries to complete procedures for obtaining cheapest loans from Japan,” a senior official said while talking to The News (a local newspaper) here on Wednesday. When contacted official spokesman of Economic Affairs Division confirmed that Japan conveyed Pakistani side to complete the procedures of loans agreements as well as the approval of the cabinet till January 15, 2011.

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