The Global Think Tank Network, an independent policy Think Tank, strongly endorses the policy statement of PM Imran Khan proposing debt write-off and restructuring of the developing countries.
The global pandemic has unleashed a twin demand and supply shock by slowing down economic activity. The less fortunate tier of society will be most affected and the only policy instrument for the government is aggressive fiscal stimulus. However GOP and other developing countries are already highly indebted and have limited fiscal space.
Debt writes off and restructuring if timely done could free up resources to undertake the required mitigating measures. Debt based stimulus packages being developed by the multilateral banks is not the answer as they will only add to the already high debt levels of the developing countries.
The risk of not taking timely action is increased global poverty levels and social unrest. To address the impending socio-economic challenges it is in the interest of both the developed and developing nations to lessen the burden of external debt of the less developed nations. The GOP needs to develop a strategy and rapidly operationalise it in coordination with other affected countries.
GTTN is a registered society, setup under the chairmanship of Dr. Muhammad Akram Sheikh, who remained as Deputy Chairman Planning Commission. The society was established to carry out high quality multidisciplinary policy research and analysis.