-Appeals world leaders, UN Secretary General to work for easing debt burden of developing countries faced with financial meltdown to virus
By Uzma Zafar
ISLAMABAD: Prime Minister Imran Khan Sunday appealed before the world leaders, leading financial heads and the United Nations Secretary General for launching of ‘Global initiative on debt relief’ to provide debt relief for the developing countries, currently faced with worsening financial meltdown due to the COVID-19 (novel coronavirus) pandemic.
In a brief televised appeal to the international community, the prime minister juxtaposed the financial health of the developing countries especially Pakistan where the government had been striving simultaneously to avoid spread of the deadly COVID-19 through clamping of lockdowns and saving the people from death due to hunger.
The prime minister cautioned that the pandemic’s socio-economic impacts would be more consequential in the developing countries.
While proposing the Initiative, he highlighted that his government had provided a 8 billion US dollar stimulus package to help the most vulnerable Pakistanis in a country having a total population of 220 million people.
The proposed global initiative aimed to lay ground for urgent debt relief to the developing countries, at their request, and without onerous conditionalities.
The initiative was built on the prime minister’s belief that enhanced fiscal capacity was fundamental to recovery from the ongoing pandemic crises. Noting the UN Secretary General’s call for action, Prime minister Khan also urged world leaders to step up measures to help developing countries to overcome disastrous impacts of COVID-19.
He proposed that the developing countries should be provided with fiscal space and financial relief through enhanced debt relief and restructuring and other additional measures that could help them manage the unfolding crisis.
The prime minister observed that in the context of unprecedented challenge from the COVID-19, the
global response had two different aspects emerging in the developing world and the developed countries.
He noted that the developing countries like Pakistan had the dilemma of containing the novel coronavirus and dealing with the impacts of economic crises leading to hunger and poverty.
In this regard, the prime minister mentioned the response of the developed countries ie; the US government’s announcement of a stimulus relief package of 2.2 trillion dollar, Germany 1 trillion Euros and Japan 1 trillion dollars to face the coronavirus challenge.
He said the COVID-19 pandemic posed unprecedented health and economic challenges.He also underlined that a global recession was certain, one worse than the Great Depression. “A global pandemic cannot be contained without strong, coordinated and well-crafted global response,” he stressed.
The Global Initiative on Debt Relief would bring together stakeholders on a platform to promote coordinated health and economic response. During the past week, various announcements had been made by multilateral actors such as the UN, the IMF, and the World Bank. The announcements made include initial relief packages of US $ 1.4 billion by the IMF, and US $ 1 billion by the World Bank.
The prime minister also invited the UN Secretary General to work with him in advancing the objectives of a coordinated response.
According to a press release of the PM Office media wing issued on the occasion, as part of his diplomatic outreach, Prime Minister Imran Khan would be approaching Heads of State/Government from a wide range of countries notably from Paris Club, Highly Indebted Poor Countries (HIPC), heads of International Organizations and others concerned to join him in this endeavor. He has entrusted the foreign minister and the adviser on finance to reach out to their respective counterparts to work for the “Global Initiative on Debt Relief” with the objectives of relieving developing countries of the financial challenge from the COVID-19 pandemic and realizing sustainable development. Prime Minister Imran Khan on Sunday appealed to the international community and world bodies to “launch an initiative to give debt relief to developing countries” that are fighting to curb the spread of the novel coronavirus.
Addressing the nation and the international community through a video message, the premier said that “highly indebted countries” are facing a “lack of fiscal space” that was inhibiting their efforts to prevent the coronavirus from spreading and, at the same time, providing relief to people.
Saying the coronavirus pandemic had brought unprecedented economic and health challenges, the prime minister warned of a global recession which would be worse than the Great Depression. “Developing countries like Pakistan cannot afford to announce huge economic packages [to mitigate the impact of the crisis. Countries like the United States and Japan have announced economic packages worth trillions of dollars whereas Pakistan could only announce a package of $8 billion.”
The initiative called “Global Initiative on Debt Relief” will bring together leaders from different countries “notably from the Paris Club, Highly Indebted Poor Countries (HIPC) and heads of international organisations” to push for a more coordinated response to the pandemic, according to a statement. Based on the premier’s belief that “enhanced fiscal capacity is fundamental to recovery from the ongoing pandemic” the initiative would lay the ground for urgent debt relief for developing countries without “onerous conditionalities”, the statement added. Prime Minister Imran also called upon international leaders to “step up measures to overcome the disastrous impact of the coronavirus pandemic”.
Meanwhile, the World Bank has said that South Asia is on course for its worst economic performance in 40 years, with decades of progress in the battle against poverty at risk, because of coronavirus.
