Tuesday Sep 29, 2020
Prime Minister Imran Khan on Tuesday reminded the international community of the crucial need for developing countries to be provided debt relief in the backdrop of the ongoing coronavirus pandemic which has hit developing economies hard.
He called upon the G20 countries in particular to extend the Debt Service Suspension Initiative (DSSI) for another year.
"The request for forbearance under this initiative should not affect the country's credit rating. This is due to force majeure, not mismanagement," the prime minister underscored, while addressing the Financing for Development High-Level Summit on the sidelines of the United Nations General Assembly.
"We must break the shackles of poverty and inequality," the prime minister stressed.
The prime minister, speaking of Pakistan's fight against the virus, said that despite the country's financial constraints "we have injected over $8bn, [nearly] 3% of our GDP to protect our poor and keep the economy going".
"Debt relief is one of the quickest ways to create fiscal space for developing countries. Therefore, in April, I called for a global initiative on debt relief," said the prime minister.
He said that subsequently, Pakistan initiated discussions on this matter at the United Nations and co-led the discussion group on debt vulnerability.
"I welcome the extensive menu of options by each of the six discussion groups. We must prioritise those actions that can have a significant impact and can be quickly implemented," the premier said.
Prime Minister Imran Khan said that multi-national development banks should participate in debt suspension initiatives.
He also called for other short measures which could cover both official and private creditors, including:
- Debt swaps, for health, climate and sustainable development goals (SDGs)
- Debt buybacks
- Re-profiling debt
- Regional resilience funds
The prime minister said that investment in "sustainable infrastructure will be key to economic recovery and realisation of SDGs".
He recommended the creation of a UN infrastructure investment facility "to mobilise an additional $1.5 trillion annually for the developing countries".
The premier, citing findings by the International Monetary Fund (IMF), said that the developing countries would require "an additional $2.5tr to recover from COVID-induced contraction".
He urged the rich countries to support the creation of "at least $500 billion in special drawing rights and relocation of unutilised SDRs (special drawing rights)".
Prime Minister Imran Khan, before concluding, underscored that recovery from recession in a post-pandemic world "must be inclusive and equitable".