ISLAMABAD: Caretaker Prime Minister Anwaar-ul-Haq Kakar issued instructions on Wednesday to create a policy framework to draw top information technology experts from various parts of the world to strengthen the sector in Pakistan while observing it could help boost the national economy.
The government has taken several initiatives in recent months to develop the IT sector to attract foreign investment, create greater employment opportunities and position the country as a competitive player in the global tech industry.
Among these initiatives is the country’s decision to set up Special Technology Zones (STZs) that will offer a number of incentives like tax exemptions along with the necessary infrastructure and connectivity support to facilitate IT companies and professionals with their work.
Kakar highlighted the potential of the information technology sector while chairing the fifth meeting of the Board of Governors of Special Technology Zones Authority held in Islamabad.
“The Prime Minister said that the IT sector can play a key role in the country’s economy,” said a statement circulated by his office after the meeting. “He directed to make necessary policies to attract IT experts from all over the world to Pakistan for the development and promotion of IT in the country.”
He told the participants of the meeting that the government had taken steps to promote foreign investment in the IT sector, adding that significant progress had already been made in the area.
The meeting also focused on issues related to the establishment and working of Special Technology Zones in the country.
Pakistan’s IT sector captured the attention of the authorities after local startups began to display notable performance in recent years by getting significant international funding, reflecting growing investor confidence in the potential of the country’s tech market and its entrepreneurs.
These startups have been thriving in various sectors such as e-commerce, fintech, health-tech, ed-tech, and logistics.
The government, in recent months, has also tried to explore various markets for the country’s IT exports while focusing primarily on the Middle East and Gulf countries.
Pakistan PM calls for global information technology expert recruitment to boost national economy
https://arab.news/w8s3j
Pakistan PM calls for global information technology expert recruitment to boost national economy
- Kakar highlights progress as the government tries to promote foreign investment in Pakistan’s IT sector
- The PM and his team discuss issues related to the establishment, functioning of Special Technology Zones
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.
