Under the tutelage of the de-facto adviser to Prime Minister on Finance Dr. Abdul Hafeez Shaikh the government is expected to launch the Economic Survey of the first year of the PTI government a day before the announcement of the budget.
Pakistan Tehreek-e-Insaf led government has decided to drop the details of $3.7 billion commercial loans from the Statistical Supplement of the Pakistan Economic Survey 2017-18.
According to the document of the Ministry of Finance, this is the first time that any government has hidden the details of the foreign commercial deals.
Out of the total $3.7 billion loans, China had provided nearly $2.2 billion worth of commercial loans.
This decision has raised concerns that the government would chose to also not disclose the terms of $2.54 billion Chinese foreign commercial loans in the upcoming Economic Survey of Pakistan for fiscal year 2018-2019.
The China Development Bank gave $2.24 billion in short term loan while the Industrial and Commercial Bank of China also disbursed $300 million in March.
China also disbursed $ 2.54 loans last month which helped stabilize Pakistan’s foreign exchange reserves.
Pakistan had contracted $3.7 billion worth of foreign commercial loans in fiscal year 2017-18. The official documents show that out of $3.7 billion, China had provided $2.2 billion through its three commercial banks.
Till May last year, China had provided $1 billion at an interest rate of three months floating London Interbank Offered Rate (Libor) plus 2.75%.
The details of $1 billion loan by the Industrial and Commercial Bank of China (ICBC) were provided in the Economic Survey of 2017-18.
But even these terms have been dropped from the Statistical Supplement 2017-18. Besides, the Bank of China had also given $200 million and the China Development Bank $1 billion in June last year.
According to Ijaz Wasti, the economic consultant of the economic advisory wing of the finance ministry “There is a possibility that there might be a confidentiality clause in some of the foreign commercial loan deals that barred the Finance Ministry from disclosing the terms of the loans.”
This issue also intersects with Pakistan’s negotiations with the IMF .
The terms of Chinese loans has also remained one of the sticking points between Pakistan and the International Monetary Fund (IMF).
The IMF has remained insistent on its demand of a complete disclosure of all types of financial cooperation between Pakistan and China.
The IMF is seeking the details of Chinese deals on the pretext of debt sustainability analysis, as it has estimated that the country’s debt-to-GDP ratio would peak to over 83% by 2023 and these debt sustainability indicators have significantly worsened in the preceding fiscal years.
This decision to keep the foreign loans terms confidential is confounding given the fact that former Finance Minister Asad Umar had directed his ministry to share details of all foreign loans signed in the past and the future with the National Assembly and Senate’s standing committees on Finance and Revenue.