UNITED NATIONS-Highlighting Prime Minister Imran Khan’s debt relief initiative at the U.N., Pakistani Ambassador Munir Akram said Wednesday that, it was one of the quickest ways to create fiscal space for developing countries to recover from the grave crisis set off by the coronavirus pandemic. “With adequate financial and technological support, developing countries can build sustainable economic models without sacrificing growth,” the Pakistani ambassador told the General Assembly’s Second Committee, which deals with economic and financial matters. Participating in a debate on the global economic situation, he said that COVID-19 has triggered the deepest recession since the Great Depression of the 1930s, disrupting trade, supply chains, businesses and jobs. The Pakistani envoy said, the poorest countries have been hit the hardest by the pandemic. He hoped that a coronavirus vaccine would be available soon for everyone, everywhere, with equitable and affordable access to it.Despite Pakistan’s financial constraints, he said Prime Minister Imran Khan injected over $8 billion – 3 per cent of our Gross Domestic Product (GDP) – to protect the poor and keep the economy afloat amid the pandemic. Over 15 million families, covering the poor and the vulnerable 100 million of our 200 million people, were given cash assistance. 

“Our financial plan was coupled with a strategy of ‘smart lockdowns’, which has fortunately controlled the spread of the virus,” Ambassador Akram said, while pointing out that domestic efforts were not enough. While the International Monetary Fund (IMF) and the United Nations Conference on Trade and Development (UNCTAD) estimate that the developing countries need over $2.5 trillion to recover from the COVID crisis, the developed countries have negotiated a stimulus of $13 trillion to revive their economies, the Pakistani envoy pointed out. The developing countries, he said, were struggling to find even a fraction of the financing they require. 

Among the options for urgent action on an agreement for debt relief, he said, was extension of the Debt Service Suspension Initiative (DSSI) for at least another year, and coverage of the distressed Small Island Developing Countries (SIDS); net inflows from Multilateral development banks (MDBs) equal to or more than a debt suspension; and cancellation or major restructuring of the Least Developed Countries debt. Most importantly, Ambassador Akram said, the creation of at least $500 billion in new Special Drawing Rights (SDRs), and repurposing of unutilised SDR quotas, for allocation to the developing countries.

“I hope that our Organization for Economic Co-operation and Development (OECD) and G-20 (industrialized countries) partners will demonstrate the political will to adopt and execute these emerging measures,” Ambassador Akram said. In the ECOSOC’s Financing for Development (FfD) process, he said, the actions taken on these options are reviewed. In this regard, the Pakistani envoy also underlined the need for the critical policy actions to build the ‘economy of the future”, including restructuring the financial architecture to ensure greater equity and efficiency; a fair international tax regime, especially to prevent tax evasion; creation of a fair and development-oriented trading system within the framework of the World Trade Organization (WTO); and investment-led growth, to ensure a resilient recovery and realization of the Sustainable Development Goals (SDGs), and digitalization of developing countries’ economies. “The challenges the world faces today are daunting, but failure is not an option,” Ambassador Akram added.