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.
“Rich countries should support the creation of at least US$500 billion in new Special Drawing Rights and reallocation of unutilized SDRs to developing countries,” he said while participating in a virtual high-level meeting on financing the 2030 Agenda for Sustainable Development in the era of COVID-19 and beyond, co-convened by the UN secretary-general and prime ministers of Canada and Jamaica.
The high-level meeting brought together heads of state and government and representatives of international organizations, the private sector and civil society to consider for recovering from the current crisis in the short term, mobilize the financial resources to achieve the SDGs in the medium term and build the resilience and sustainability of countries and the global financial architecture in the long term.
Prime Minister Imran Khan said the investment in sustainable infrastructure would be key to a resilient economic recovery and realization of Sustainable Development Goals (SDGs) and stressed upon creation of a United Nations (UN) Infrastructure Investment Facility to mobilize an additional $1.5 trillion annually in the developing countries. He said debt relief was one of the quickest ways to create fiscal space for developing countries and referred to his call for “Global Initiative on Debt Relief. Pakistan subsequently initiated discussions on this matter at the UN, and co-led the Discussion Group on Debt Vulnerability under your Initiative.
Welcoming the extensive ‘Menu of Options’ identified by each of the six Discussion Groups, the prime minister said they must prioritize those actions that could have a significant impact and could be quickly implemented.
“First, extension of the G-20’s Debt Service Suspension Initiative for at least another year. The request for forbearance under this Initiative should not affect the country’s credit rating, since this is due to force majeure, not mismanagement. Second, the Multilateral Development Banks should participate in the Debt Suspension Initiative. Third, other short-term measures which could cover both official and private creditors include: debt swaps for health, climate and SDGs; debt buy-backs; re-profiling debt; and regional resilience funds,” he suggested. He said the International Monetary Fund (IMF) estimated that developing countries would require an additional $2.5 trillion to recover from Covid-induced contraction.
The prime minister further said the COVID-19 pandemic inflicted unparalleled human suffering and controlling the virus was critical to addressing both the health and the economic emergency. “In Pakistan, our strategy of “smart lockdowns” has fortunately controlled the spread of the virus. Yet, we are not complacent. No one is safe until everyone is safe,” he added.
Prime Minister Khan expressed the hope that a vaccine would be available soon. Everyone, everywhere, must had equitable and affordable access to the vaccine, as a global public good.
The Covid crisis triggered the worst recession since the 1930s Great Depression. As usual, the poorest countries and the poorest people had been hit the hardest. Despite our financial constraints, we had injected over $8 billion – 3% of our GDP – to protect the poor and keep the economy running, he said while enumerating his government’s initiatives during the Covid-19 pandemic. The prime minister further said recovery from the recession, as from the pandemic, must be inclusive and equitable. “We must break the shackles of poverty and inequality,” he added.
