Pakistan says has revamped visa policy to boost tourism, forex reserves

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President Dr Arif Alvi being presented memento during the Pakistan Tourism Summit in Islamabad on April 02, 2019 – (Photo – PID)
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Group photo of participants of the Pakistan Tourism Summit held in Islamabad on April 2, 2019. (Pakistan Tehreek-e-Insaf Twitter account)
Updated 03 April 2019
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Pakistan says has revamped visa policy to boost tourism, forex reserves

  • Foreign Minister Shah Mahmood Qureshi, senior officials address Pakistan Tourism Summit in Islamabad
  • Pakistan struggling to revive tourism industry devastated by militant violence after September 11 attacks in the United States

ISLAMABAD: The Pakistani Foreign Minister said on Tuesday the government had revamped the country’s visa policy and rationalized visa fees to attract foreign tourists from around the world and boost foreign exchange reserves.

Last month, Prime Minister Imran Khan announced a new visa policy, saying citizens of 175 countries would be able to apply for online visas and business visas would be available to 96 countries. In January, Pakistan said it would offer visas on arrival to visitors from 50 countries.

The moves are part of a larger plan to revive Pakistan’s tourism industry, devastated by militant violence after the September 11, 2001, attacks in the United States.

“Pakistan is faced with a forex reserves challenge at the moment and a quick way to generate dollars for our country is through promotion of tourism,” Foreign Minister Shah Mahmood Qureshi said in his address at the Pakistan Tourism Summit in Islamabad. “The tourism industry will also help create jobs for millions of the youth.”

He said the government was trying to create an enabling environment for private investors to build necessary infrastructure at tourist resorts, especially in the picturesque northern areas of the country.

Pakistan was last a prominent tourist destination in the 1970s when the “hippie trail” brought Western travellers through the apricot and walnut orchards of the Swat Valley and Kashmir on their way to India and Nepal.

Since then, deteriorating security and the imposition of a harsh interpretation of Islamic laws, particularly in the country’s northwestern belt, have chipped away at the number of visitors.

But law and order has improved dramatically in recent years, with militant attacks down sharply in the mainly Muslim country of 208 million people.

Qureshi said the government was also trying to revive tourism by tapping into over nine million overseas Pakistani.

“We are trying to package family vacations for Pakistani expatriates,” he said. “This way they will reconnect to their culture, history and families as well.”

Tourism currently contributes less than one percent to Pakistan’s GDP while arch-rival India’s annual tourism contribution to its $2597 billion GDP is $244 billion, or 9.4 percent.

Speaking at the tourism summit, Azad Jammu and Kashmir president Sardar Masood Khan said tourists to the scenic valley had increased from 500,000 in 2010 to 1.5 million in 2017.

“We are giving utmost priority to the up-gradation of road infrastructure, hotels, accommodation and quality food to entertain our guests,” he said.

The Azad Kashmir government has recently passed legislation to seek investments from Pakistani entrepreneurs and foreign investors.

“All AJK banks have agreed to spend at least 15 percent on the promotion of tourism and culture in the area,” he said.

Raja Yasir Humayun Sarfraz, the tourism minister for Pakistan’s largest and richest Punjab province, said his department had identified tourist locations in at least eight districts in the province that would be developed in the next five years.

“We are also coming up with a legal mechanism to encourage businessmen to invest in the tourism industry,” he added.

Qazi Israr of the Hajj Organizers Association of Pakistan said Pakistan could follow the example of Saudi Arabia, United Arab Emirates, Malaysia and Turkey, among other Muslim nations, that were earning billions of dollars annually through religious tourism.

“Pakistan is blessed with sacred religious places of Sikhs, Hindus and Buddhists, and private tour operators can play their part in their promotion,” Israr said.


Islamabad dismisses claims about paying up to 8 percent interest on foreign loans as ‘misleading’

Updated 22 February 2026
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Islamabad dismisses claims about paying up to 8 percent interest on foreign loans as ‘misleading’

  • Pakistan has long relied on external loans to help bridge persistent gaps in public finances and foreign exchange reserves
  • Pakistan’s total external debt, liabilities stand at $138 billion at an overall average cost of around 4 percent, ministry says

KARACHI: Pakistan’s finance ministry on Sunday dismissed as “misleading” claims that the country is paying up to 8 percent interest on external loans, saying the overall average cost of external public debt is approximately 4 percent.

Pakistan has long relied on external loans to help bridge persistent gaps in public finances and foreign exchange reserves, driven largely by a narrow tax base, chronic trade deficits, rising debt-servicing costs and repeated balance-of-payments pressures.

Over the decades, successive governments have turned to multilateral and bilateral lenders, including the International Monetary Fund, the World Bank and the Asian Development Bank, to support budgetary needs and shore up foreign exchange reserves.

The finance ministry on Sunday issued a clarification in response to a “recent press commentary” regarding the country’s external debt position and associated interest payments, and said the figures required contextual explanation to ensure accurate understanding of Pakistan’s external debt profile.

“Pakistan’s total external debt and liabilities currently stand at $138 billion. This figure, however, encompasses a broad range of obligations, including public and publicly guaranteed debt, debt of Public Sector Enterprises (both guaranteed and non-guaranteed), bank borrowings, private-sector external debt, and intercompany liabilities to direct investors. It is therefore important to distinguish this aggregate figure from External Public (Government) Debt, which amounts to approximately $92 billion,” it said.

“Of the total External Public Debt, nearly 75 percent comprises concessional and long-term financing obtained from multilateral institutions (excluding the IMF) and bilateral development partners. Only about 7 percent of this debt consists of commercial loans, while another 7 percent relates to long-term Eurobonds. In light of this composition, the claim that Pakistan is paying interest on external loans ‘up to 8 percent’ is misleading.

The overall average cost of External Public Debt is approximately 4 percent, reflecting the predominantly concessional nature of the borrowing portfolio.”

With respect to interest payments, public external debt interest outflows increased from $1.99 billion in Fiscal Year (FY) 2022 to $3.59 billion in FY2025, representing an increase of 80.4 percent, not 84 percent as reported. In absolute terms, interest payments rose by $1.60 billion over this period, not $1.67 billion, it said.

According to the State Bank of Pakistan’s records, Pakistan’s total debt servicing payments to specific creditors during the period under reference were as follows: the IMF received $1.50 billion, of which $580 million constituted interest; Naya Pakistan Certificates payments totaled $1.56 billion, including $94 million in interest; the Asian Development Bank received $1.54 billion, including $615 million in interest; the World Bank received $1.25 billion, including $419 million in interest; and external commercial loans amounted to nearly $3 billion, of which $327 million represented interest payments.

“While interest payments have increased in absolute terms, this rise cannot be attributed solely to an expansion in the debt stock,” the ministry said. “Although the overall debt stock has increased slightly since FY2022, the additional inflows have primarily originated from concessional multilateral sources and the IMF’s Extended Fund Facility (EFF) under the ongoing IMF-supported program.”

Pakistan secured a $7 billion IMF bailout in Sept. 2024 as part of Prime Minister Shehbaz Sharif’s efforts to stabilize the South Asian economy that narrowly averted a default in 2023. The government has since been making efforts to boost trade and bring in foreign investment to consolidate recovery.

“It is also important to note that the increase in interest payments reflects prevailing global interest rate dynamics. In response to the inflation surge of 2021–22, the US Federal Reserve raised the federal funds rate from 0.75-1.00 percent in May 2022 to 5.25–5.50 percent by July 2023. Although rates have since moderated to around 3.75 percent, they remain significantly higher than 2022 levels,” the finance ministry said.

“The government remains committed to prudent debt management, transparency, and the continued strengthening of Pakistan’s macroeconomic stability,” it added.