- Prime Minister Imran Khan has been looking for debt relief for developing and poor countries in the war on COVID-19 and his global initiative for debt relief got a positive response.
- On Thursday, April 16, UN Secretary-General Antonio Guterres supported PM Khan’s call for a global initiative for debt relief for developing countries to combat COVID-19.
- Pakistan is included in the group of countries eligible for debt relief.
In a brief televised message on April 12, PM Khan appealed to the heads of financial institutions, leaders of rich developed countries and UN secretary-general to debt relief.
My appeal to the international community, the UNSG & international financial institutions to respond positively to the dilemma confronting developing countries in the face of the COVID19 pandemic. #Global_Initiative_Debt_Relief pic.twitter.com/EfydRhfZhc
— Imran Khan (@ImranKhanPTI) April 12, 2020
The prime minister highlighted the problems and challenges being faced by the developing countries, mostly those burdened by heavy debt.
The biggest challenge for those countries in the developing world was to save their people from dying.
And save them from starvation due to prolonged pandemic lockdowns.
UNSG spokesperson Stephane Dujarric at a virtual press briefing in New York said,
“Imran Khan’s initiative is in the same spirit as the Secretary-General’s position,”
In a response to a question in a press briefing, he said,
“Guterres believes that debt relief must be an important part of the response to COVID-19.
Also including immediate waivers on interest payments for 2020”
The spokesperson added It’s important that the world’s poorest countries used limited resources to fight against COVID-19 virus.”
Pakistan is included in the group of countries eligible for debt relief
Finance minister of the G20 announced to include all developing countries grouped under the World Bank’s International Development Association (IDA) to be eligible for a debt relief plan.
Pakistan is included in a group of 72 other countries adequate for debt relief.
On all major and interest payments to official bilateral creditors.
The World Bank (WB) and International Monetary Fund (IMF) to decide on the terms and conditions of the debt relief.
In the meantime, the G20 countries will request the IMF and WB on whether the suspension period should be extended to June 2021 or not.
I totally depend on the situation of how the virus related problems are shaping up by then.
Earlier today in a news conference in Islamabad Foreign Minister Shah Mehmood Qureshi said that the decision by G-20 countries to give debt relief is remarkable and would give major relief to the developing nations.
He said the impact of debt relief for Pakistan would be significant.
The suspension period for debt relief will start from May 1 and last till Dec 1, 2020.
All debt packages falling payable in this period will be packaged into a new loan on which the payments will not start until June 2022.
Then it will be paid over the next three years.
A standardized term sheet has been made for all the payments clubbed under the relief plan.
Dr.Abdul Hafeez Shaikh Adviser to the Prime Minister on Finance and Revenue said
“we need to wait in order to measure the effectiveness of the debt relief.