The Pakistan Industrial and Traders Associations Front (PIAF) has said G20 countries’ short-term foreign debt relief will not benefit Pakistan in the long run to deal with the pandemic crisis.
PIAF Chairman Mian Nauman Kabir, in a joint statement with senior vice chairman Nasir Hameed Khan and vice chairman Javed Iqbal, stated that there is no benefit of G20 countries’ announcement of including Pakistan in a group of 72 countries, eligible for an interim debt relief on principal and interest payments, as the suspension period for debt relief will remain only for few months till Dec 1, 2020.
Mian Nauman Kabir said that all debt service falling due in this period will be packaged into a new loan on which the repayments will again start from July 2022, which will have to be paid over three years.
While reiterating his demand of abolishing the whole debt, he appealed the international community to write off the debts of vulnerable countries, including Pakistan, as the coronavirus may shatter the economies of developing countries.
PIAF chairman said that the world community should think of full debt write-off for countries like Pakistan, which are very vulnerable, at least that will help them it in coping with the coronavirus.
Nauman Kabir observed that Pakistan lacks fiscal space and a proper health system. Therefore, the most appropriate response that G20 countries can give, at the moment, is abandoning the loan instead of a temporary relief, he said.
“We appeal to the heads of financial institutions to announce the suspension of debt for Pakistan so that it could combat Covid-19.”
PIAF senior vice chairman Nasir Hameed Khan called for the anti-debt campaign on a vast level aimed at cancelation of debt of Pakistan. He urged the donor countries and the international financial institutions to cancel Pakistan’s foreign debt in this time of hardship.
He asked them to extend grants to Pakistan instead of loans. It was nothing short of a crime that a poor country like Pakistan was being deprived of such a heavy amount every year in the repayment of its foreign loans, he said.
Nasir Hameed said that in almost one and half year, Pakistan’s external debt and liabilities have increased by over Rs2.44 trillion.
The government’s domestic debt which was around Rs16.4 trillion in June 2019 spiraled to Rs21.6 trillion in Dec 2019, a jump of over 25 percent during this period. Pakistan has paid around $7 billion in shape of both principal and interest payment during July-Dec period of 2019-20.
The country had paid $1.65 billion as interest payment and $5.335 billion as principal amount making the total payment at $6.98 billion in that period.
PIAF vice chairman Javed Iqbal urged that an immediate debt write-off was required to ensure that the emergency aid does not get consumed in debt repayments.
He feared that if Pakistan sees a serious outbreak than the government’s efforts to revive the economy may go down the drain.
Javed Iqbal urged the government to stand up and say no to international financial institutions. He called upon the political forces and civil society organizations to get together for an anti-debt campaign and support the government in this regard.
