Prime Minister Imran Khan has called for extending the G20 debt service for another year, saying that it is difficult to address both the health and the economic emergencies during the pandemic.
He made these comments while addressing a high-level summit on the ‘Financing for Development in the Era of Covid-19 and Beyond’ on the sidelines of the 75th session of the United Nations General Assembly (UNGA).
The premier also requested free coronavirus vaccines to all developing countries.
Everyone, everywhere, must have equitable and affordable access to the vaccine, as a global public good.
He pitched the idea of debt service suspension until 2022, without compromising the country’s credit rating since this is ‘due to force majeure, and not mismanagement.’
PM Khan urged the multinational development banks to introduce debt suspension initiatives. He suggested measures that can 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
Khan maintained that ‘sustainable infrastructure will be key to economic recovery and realization of SDGs.’
Highlighting Pakistan’s success story in dealing with the coronavirus, PM Imran said that his government’s strategy of “smart lockdowns” fortunately helped control the spread of the virus.
The Prime Minister declared the COVID crisis the worst since the 1930’s Great Depression, noting that the poorest countries and people were hit the hardest.
Despite financial woes, Pakistan injected over $8 billion – 3% of the GDP – to protect the vulnerable people and keep the economy floating.
He suggested that debt relief will create fiscal space for developing countries.
We should create a UN Infrastructure Investment Facility to mobilize an additional $1.5 trillion annually in the developing countries.
Quoting the IMF that developing countries will need at least $2.5 trillion to recover from COVID-induced contraction, Khan called on developed countries to support the creation of at least $500 billion in new Special Drawing Rights and reallocation of unutilized SDRs to the developing countries.