US may write off $1b Pak debt

The US government is trying to win approval from Congress to write off a third of Pakistan's $3 billion official debt to the United States in the current financial year (Oct-Sept), US ambassador to Pakistan Nancy Powell said Thursday.

Last February President George Bush promised President Pervez Musharraf that "he would work with Congress to forgive $1 billion of the $3 billion owed by Pakistan to the US Government," Powell told businessmen in the southern port city of Karachi.

"We are working hard to have this substantial debt forgiveness included by Congress in the current budget," she said.

The United States and its allies gave financial help to Pakistan in aid and loans after Islamabad announced support for the US-led war against the Afghan Taliban and Osama bin Laden's al-Qaeda network.

Pakistan also managed to get $12.5 billion worth of debt rescheduled from the Paris Club of bilateral creditors in December 2001.

Powell said the United States and Pakistan have increased interaction in the fields of economic development, education, counter-terrorism, regional stability and military cooperation.