Islamabad, 10 December 2021 (TDI): Pakistan and South Korea signed an agreement to reschedule the external debt owed by Pakistan to the Republic of Korea. The debt is owed for the year 2020 and the first half of the current year.

Secretary of the Ministry of Economic Affairs, Mian Asad Hayaud Din represented Pakistan, whilst the Korean Ambassador to Pakistan, Suh Sangpyo represented South Korea (Republic of Korea).

Agreement to reschedule Pakistan’s debt

The agreement was signed after months of negotiations that led to the adoption of the Memorandum of Understanding on the Treatment of Debt Service as well as its Amendment between Pakistan and the Republic of Korea; in June and December 2020, respectively.

However, the World Bank (WB) and the International Monetary Fund (IMF) urged all the official bilateral creditors to suspend debt payments from the International Development Association (IDA) states in March 2020.

The decision was made as per the G20 Finance Ministers agreement on the Debt Service Suspension Initiative (DSSI) in April 2020. Moreover, apprehensions concerning the social and economic influence of the Covid-19 crisis on the poorest states of the world propelled the decision.

The apprehensions were accentuated by the Paris Club. Against such a backdrop, this latest agreement between Korea and Pakistan has immense importance.

Korean Ambassador reaffirmed support for Pakistan

Addressing the ceremony, Ambassador Suh Sangpyo reaffirmed Korea’s support for Pakistan. He enunciated that Korea aims to boost bilateral economic relations with the country.

Secretary, Mian Asad Hayaud Din, on his part lauded the efforts of the Korean Ambassador for the facilitation of the agreement. In addition, he also thanked the Government of the Republic of Korea for its interminable help to Pakistan.

The South Korean Ambassador also met with Zulfiqar Haider Khan, the Additional Secretary of the Ministry of Economic Affairs, on the sidelines of the signing ceremony. The two discussed matters pertaining to mutual interests.