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Pakistan welcomes G-20 decision to suspend debt service for 76 countries – Journal

ISLAMABAD: Pakistan on Thursday welcomed the G-20’s decision to suspend debt service to 76 developing countries, saying it would have a substantial impact on economies reeling from the Covid-19 pandemic.

“The Prime Minister appreciated the debt relief measures of the G-20 countries, the IMF (International Monetary Fund) and the World Bank for developing countries, including Pakistan,” said the Prime Minister’s office. minister in a press release.

Pakistan, which itself suffers from heavy external debt, has been at the forefront in advocating for debt relief and restructuring of struggling economies so that they can devote their resources to saving lives.

Prime Minister Imran Khan launched an international appeal for debt relief on April 12. He urged world leaders to help developing countries cope with the impact of Covid-19 through debt relief and restructuring so that fiscal space can be created for they can carry out relief activities in their countries.

Pakistan’s total external debt is $ 107 billion and in the last fiscal year (2018-19), $ 11.6 billion was disbursed to service these loans.

Qureshi calls it Islamabad’s diplomatic feat

The Prime Minister’s call for debt relief, known as the “Global Debt Relief Initiative”, was preceded by a major diplomatic campaign by the Foreign Ministry.

Endorsing Prime Minister Khan’s appeal, a spokesperson for UN Secretary-General Stéphane Dujarric said Khan’s initiative was in the same spirit as the Secretary-General’s position.

A meeting of finance ministers and officials from the G-20 countries agreed on Wednesday to suspend principal and interest repayments to poor and least developed countries for nearly a year. Countries that have paid debt service to the World Bank and IMF are eligible for relief. The initiative, which is supported by the Paris Club of creditors, would be effective from May 1.

Pakistan will also be able to benefit from the relief to be on an IMF program.

Fiscal space

Foreign Minister Shah Mehmood Qureshi, at a press conference at the Foreign Ministry, said Pakistan would get fiscal space through the relief plan and the government would use it for the welfare of the country. population, especially the most vulnerable segments of society.

He said the detailed study on the impact of G-20 debt relief was underway, but it was going to be substantial.

Pakistan has announced an $ 8 billion relief plan. This includes distributing food and disbursing money for the poor.

Mr Qureshi said the immediate objective of the prime minister’s call for debt relief was to create fiscal space and this has been achieved.

He hailed it as Pakistan’s diplomatic achievement. He recalled that skepticism reigned when the initiative was launched and that he too had warned the Prime Minister about the risks. However, he said, it worked.

Responding to a question about seeking similar relief from China, the foreign minister said the G-20 package would not have been possible without Beijing’s support. In addition, he maintained that the focus should be on international financial institutions because China’s share in Pakistan’s external lending is very low.

“A lot can be done bilaterally and we will do it whenever necessary,” he added.

Meanwhile, IMF Resident Representative in Pakistan Teresa Daban Sanchez called on Foreign Minister Qureshi to discuss the Covid-19 pandemic and its impact.

Mr Qureshi, during the meeting, stressed that any initiative to help developing countries tackle the ramifications of Covid-19 should be inclusive and without onerous conditions.

It should be remembered that in addition to debt relief, Pakistan is working with the IMF for a concessional financing agreement of $ 1.4 billion to deal with the economic impact of the coronavirus outbreak.

Posted in Dawn, April 17, 2020

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