PM calls for global initiative on debt relief

Prime Minister Imran Khan on Sunday appealed for a "Global Initiative on Debt Relief" saying that Covid-19 pandemic has posed unprecedented health and economic challenges.

In a televised appeal to the international community, particularly the developed world and the United Nations, the Prime Minister asserted that the global pandemic cannot be contained without strong, coordinated and well-crafted global response.

He said that a global recession was certain, one worse than the 'great depression'. He said that the "Global Initiative on Debt Relief" will bring together stakeholders on a platform to promote coordinated health and economic response.

During the past week, he added that various announcements have been made by multilateral actors such as the UN, the IMF, and the World Bank. The announcements made include initial relief packages of US $ 1.4 billion by the IMF, and US $ 1 billion by the World Bank, he added.

Prime Minister Imran Khan invited the Secretary General of the UN to work with him in advancing the objectives of a coordinated response. The proposed "Global Initiative" aims to lay ground for urgent debt relief to the developing countries, at their request, and without onerous conditionalities, he added.

The Initiative is built on the Prime Minister's belief that enhanced fiscal capacity is fundamental to recovery from the ongoing pandemic crises. The Prime Minister cautioned that the pandemic's socio-economic impacts would be more consequential in the developing countries.

While proposing the initiative, the Prime Minister highlighted that his government had provided an $ 8 billion stimulus package to help the most vulnerable Pakistanis.

Noting the United Nations Secretary-General's call for action, the Prime Minister also urged world leaders to step up measures to help developing countries to overcome disastrous impacts of Covid-19.

He proposed that the developing countries be provided with fiscal space and financial relief through enhanced debt relief and restructuring and other additional measures that could help them manage the unfolding crisis.

The Prime Minister said that two responses are being seen in developed and developing world, adding that in developed world, it is focused on containing the virus and dealing with economic impact whereas the developing countries are facing the dilemma of stopping people from getting infected by virus, and people dying of hunger due to lockdown measures.

He said that there is huge gap in resources available to developed and developing countries, adding that many developed countries have allocated huge stimulus packages in the wake of coronavirus.

He said the US allocated $2.2 trillion, while Germany is spending one trillion dollars and Japan is also allocating the same amount for its people. He said Pakistan despite its limited resources and population of over 210 million earmarked $8 billion in the stimulus package.

He urged the world leaders and institutions to devise a plan and strategy to come out of the situation.

According to the media office of the PM House, as part of his diplomatic outreach, Prime Minister Imran Khan will be approaching heads of state/government from a wide range of countries notably from Paris Club, Highly Indebted Poor Countries (HIPC), heads of International Organizations and others concerned to join him in this endeavour.

The Prime Minister has also entrusted the Foreign Minister and the Adviser on Finance to reach out to their respective counterparts to work for the "Global Initiative on Debt Relief" with the objectives of relieving developing countries of the financial challenge from the Covid-19 pandemic and realizing sustainable development.