ISLAMABAD: The International Air Transport Association (IATA) on Thursday said Pakistan had blocked a whopping $225 million in airlines’ repatriation funds, calling on governments of other countries as well to remove barriers to airlines repatriating their revenues.
Cash-strapped Pakistan, already reeling from low foreign reserves and skyrocketing inflation, is faced with mounting international debt and a ballooning current account deficit.
In a statement, the IATA said the amount of airline funds for repatriation being blocked by governments has risen by more than 25% ($394 million) in the last six months. It added that total funds blocked by countries now stand at $2 billion.
“IATA calls on governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities, in line with international agreements and treaty obligations,” the airline association said.
IATA Director-General Willie Walsh said that while preventing airlines from repatriating funds may appear to be an easy way to shore up reserves, ultimately local economies “will pay a high price.”
“No business can sustain providing service if they cannot get paid and this is no different for airlines. Air links are a vital economic catalyst,” he added.
The top five markets—excluding Venezuela—with blocked funds are Nigeria with $551 million, Pakistan with $225 million, Bangladesh with $208 million, Lebanon with $144 million and Algeria with $140 million.
Despite worrying economic indicators, Pakistan has assured investors and international money lenders that it intends to repay its debts.
“All debt repayments are on track and the country's foreign exchange reserves are expected to rise in the second half of the fiscal year,” Governor State Bank of Pakistan Jameel Ahmad said.
