IMF-World Bank, suspend Pakistan debt repayments!
Scores of people gathered outside Lahore Press Club near the American consulate to demand suspension of debt repatriation to International Monetary Fund and World Bank. The protest was organized by the Pakistan Kissan Rabita Committee (PKRC) in collaboration with Asian Peoples’ Movement on Debt and Development.
The protestors carried placards with calls to “Say No to IMF and World Bank,” “Suspend Debt Repatriation,” and “Debt Repayment during calamity is crime against people of Pakistan.”
Pakistan’s devastating floods have killed 1,500 people so far, displaced more than 50 million and eroded livelihoods with the loss of an estimated one million livestock. In addition, floods washed away at least a million houses and damaged 90% of agricultural crops, signalling an impending food crisis. The unprecedented floods have resulted in a US$10 billion loss to the economy. Yet the country’s external debts and debt service payments make it almost impossible for the government to focus on relief and rehabilitation of its people affected by the floods.
Pakistan is one of the 52 countries facing a severe debt crisis. The most critical problem faced by the country’s economy is repayment and servicing of external debt. Pakistan has to pay a total of around $38 billion to the IMF, World Bank and other financial institutions, including loans from Chinese banks by the end of this year.
The country’s total debt and liabilities increased by Rs11.85 trillion in FY22, according to data released by the State Bank of Pakistan (SBP). Pakistan had to pay $15.071 billion as external debt servicing in FY22, compared to $13.424 billion in the previous fiscal year. The breakdown shows that Pakistan paid $12.093 billion in principal payments and $2.978 billion in interest. The interest accounted for about 25% of the principal.
“The multiple crises – of COVID, its economic impacts exacerbating pre pandemic hardships, and the escalating climate emergency – are already more than enough reason for the cancellation of the debts of Pakistan and all other countries of the Global South. The devastating floods in Pakistan has rendered it even more urgent. It would be utterly inhumane for lenders – public and private – to fail to respond to this demand. We also call on governments of rich countries to meet their full obligations to deliver on Climate Finance, for Pakistan and all countries of the Global South,” said Lidy Nacpil, APMDD coordinator.
“We demand a suspension of debt repayments and a cancellation of the debt since Pakistan is no longer in a position to repay its loans and these Floods have worsened the condition of the country’s economy,” said Nasir Iqbal, an organizer of Pakistan Kissan Rabita Committee.
“Pakistan needs at least four years’ time to rebuild and reconstruct its economy and to cover up the damages done by floods and heavy rains. This demand has a legitimate legal argument based on international law, which calls for suspension of debt payments on the grounds of necessity and fundamental change of circumstances,” Saima Zia from PKRC noted.
“The delivery of adequate, additional, public and non-debt creating Climate Finance for mitigation, adaptation and loss and damage is as urgent as public financing of measures to fight flood crisis economic assistance for those whose jobs, livelihoods and well-being are most affected, and programs for building more just, equitable, resilient and sustainable economies that are the foundations towards solving the multiple crises,” stated Farooq Tariq, General Secretary PKRC.