LAHORE                     -               The business community has supported Prime Minister Imran Khan’s call on the international community to write off the debts of vulnerable countries, such as Pakistan, as the coronavirus may shatter the economies of developing countries.

Pakistan Industrial and Traders Associations Front (PIAF) chairman Mian Nauman Kabir, in a joint statement along with senior vice chairman Nasir Hameed Khan and vice chairman Javed Iqbal, said that the world community should think of some sort of a debt write-off for countries like Pakistan, which are very vulnerable, at least that will help it in coping with the coronavirus.

He called for the anti-debt campaign on a vast level aimed at cancelation of debt of Pakistan. He urged the donor countries and the international financial institutions (IFIs) to cancel Pakistan’s foreign debt.

Mian Nauman Kabir asked them to extend grants to Pakistan instead of loans. It was nothing short of a crime that a poor country like Pakistan was being deprived of such a heavy amount every year in the repayment of its foreign loans, he said. He urged that an immediate debt write-off was required to ensure that the emergency aid does not get consumed in debt repayments.

PIAF chairman feared that if Pakistan sees a serious outbreak than the government’s efforts to revive the economy may go down the drain.

He also urged the government to stand up and say no to international financial institutions. He called upon the political forces and civil society organisations to get together for an anti-debt campaign and support the PM in this regard.

Nauman Kabir said that in the past 18 months, Pakistan’s external debt and liabilities have increased by over Rs2,440 billion. The government’s domestic debt which was around Rs16.4 trillion in June 2019 spiraled to Rs21.6 trillion in Dec 2019, a jump of over 25 percent in just a year and a half.

PIAF senior vice chairman Nasir Hameed Khan added that he feared that such consequences would be faced by every developing nation. If it spreads, we will all have problems with our health facilities. We just don’t have that capability. We just don’t have the resources.

Nasir Hameed said that the most alarming part is that the country’s debt-to-GDP ratio climbed to 94 percent in Dec 2019, whereas the IMF had recommended 78.5 percent debt-to-GDP ratio at the outset of the programme. All these funds going into debt servicing when millions of people are in dire need of getting their basic needs fulfilled, he said. Most poor countries were stuck with foreign loans from their inception. He said in some cases these countries had repaid many times the original amount.

PIAF vice chairman Javed Iqbal said that almost 80 percent of Pakistan’s foreign debt was obtained during dictatorial regimes and people did not benefit from these loans as they were used to implement other agendas. He said that the debts were illegitimate and were not binding on the people of Pakistan.

Javed Iqbal said that a democratically elected government had the right to refuse to repay these loans.

Pakistan had paid around $7 billion in shape of both principal and interest payment during July-Dec period of 2019-20. The country had paid $1.65 billion as interest payment and $5.335 billion as principal amount making the total payment at $6.985 billion in that period. The breakup showed that country had paid $5.86 billion in shape of principal and interest payments against the public debt in first six months. The country’s loan repayment and interest payment is continuously increasing due to massive borrowing.