ISLAMABAD    -  Prime Minister Imran Khan yesterday said that rich countries should support by raising at least 500 billion dollars to create fiscal space for developing countries on the face of COVID-19 pandemic.

In his virtual address at 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 in New York, he said 500 billion dollars should be available for developing countries to control and the offset impact of Covid-19.

He also called for extension of the G-20’s Debt Service Suspension Initiative for at least another year but the request for forbearance under this initiative should not affect the country’s credit rating.

Imran Khan suggested that the Multilateral Development Banks should participate in the Debt Suspension Initiative. 

Also, other short-term measures which could cover both official and private creditors, including debt swaps for health, climate and SDGs; debt buy-backs; re-profiling debt; and regional resilience funds, should be considered, he added.

The Prime Minister asserted that investment in sustainable infrastructure will be key to a resilient economic recovery and realization of SDGs.

He stressed the need to create a UN Infrastructure Investment Facility to mobilize an additional 1.5 trillion dollars annually in the developing countries as the IMF estimates that developing countries will require an additional 2.5 trillion dollars to recover from COVID-induced contraction.

The Prime Minister said they must break the shackles of poverty and inequality.

He also said that the COVID-19 pandemic is inflicting unparalleled human suffering and controlling the virus is critical to address both the health and the economic emergency.

While highlighting Pakistan’s anti-pandemic strategy, the Prime Minister said in Pakistan, our strategy of “smart lockdowns” has fortunately controlled the spread of the virus. He said no one is safe until everyone is safe. He said debt relief is one of the quickest ways to create fiscal space for developing countries.

Imran hoped that a vaccine will be available soon and “everyone everywhere must have equitable and affordable access to the vaccine, as a global public good.” He said the Covid crisis has triggered the worst recession since the 1930s Great Depression, adding the poorest countries and the poorest people have as usual been hit the hardest.

Despite our financial constraints, he said that Pakistan had injected over $8 billion – 3% of the GDP – to protect the poor and keep the economy running. Debt relief is one of the quickest ways to create fiscal space for developing countries, he said while apprising the forum that he had called for a “Global Initiative on Debt Relief” in April.

He added that Pakistan had subsequently initiated discussions on the matter at the UN, and co-led the Discussion Group on Debt Vulnerability. He welcomed the extensive “Menu of Options” identified by each of the six Discussion Groups, saying that the countries must prioritise those actions that can have a significant impact and can be quickly implemented.

He pointed out that IMF estimates that developing countries would require an additional $2.5 trillion to recover from Covid-induced contraction, thus availability of at least 500 billion dollars is a foremost necessity, he stressed.

“Recovery from the recession, as from the pandemic, must be inclusive and equitable,” he concluded.