Pursuit of debt waiver

Contrary to the expectations of leaders of developing nations, their demand for waiving of greater part of debt acquired by these countries was not favorably considered by rich G-20 countries. The facility of deferred payment for one year with freezed rate of interest was decided. The rescheduling of loans and refinancing for payment will not go far enough to address the debt servicing problem of underdeveloped countries. Foreign Office spokesperson Aisha Farouqi said in statement that Pakistan will convene a consultative meeting of interested countries for deliberations on further steps that can be taken to evolve a comprehensive solution to debt challenges that developing countries are confronted with in the wake of Covid-19. She said that Prime Minister and Foreign Minister have been speaking to a number of world leaders on seeking a workable solution to debt issues. It merits mention that the Prime Minister had already called upon the leaders of rich nations about the lack of capacity of coronavirus pandemic hit economies of developing countries to repay the loans acquired in the past. Hence G-20 summit seriously consider the option of debt waiver, which they did not. United Nations Secretary General Antonio Guterres had endorsed the proposal of debt waiver. However, multilateral donor agency the International Monetary Fund agreed to facility of debt rescheduling of $1.8 billion for Pakistan. Currently, Pakistan’s foreign debt from both multilateral and bilateral sources stands at $90 billion. Revival and recovery of the national economy may take years, keeping in view the chronic stagnation in industry, agriculture al and exports. The exports may not get momentum even after the uptick in global economy because the industry is non-competitive as it is stuck in the second generation technology, greater dependence on expensive imported raw material, overburdened by regressive taxation, high tariffs of energy inputs and shortage of skilled manpower. Agriculture is in deep crisis due water scarcity and high cost of inputs. Collective stance on debt waiver by all developing countries seems to be the only plausible option for getting out of debt trap.