ISLAMABAD: Pakistan on Monday decided to intensify efforts to restructure debt and aid amid growing economic challenges due to the Covid-19 pandemic.
Foreign Minister Shah Mehmood Qureshi chaired a consultative session on the economic impact of transmission at the Foreign Office, which was attended by the Federal Minister for Planning and government officials at Covid-19 Asad Umar, Minister of Economic Affairs Hammad Azhar, and Counsel for PM in Finance Hafeez Sheikh .
The Covid-19 pandemic has put additional pressure on Pakistan’s struggling economy. A major setback is expected from a drop in exports due to a drop in international demand and a reduction in remittances from abroad. A contraction in large-scale industrial production, and the service and agriculture sectors is also expected, which will significantly reduce the projected economic growth rate. In addition, the government has announced a massive aid package of nearly Rp1.13 trillion.
Even though falling oil prices provide some cushion, it may not be enough to bear the overall impact.
Covid-19 has put additional pressure on the economy of a struggling country
Pakistan has considered an emerging situation proposing debt relief and restructuring for all struggling economies so that they can spend their resources to save lives and provide assistance to their masses.
Foreign Minister Qureshi undertook extensive diplomatic outreach on this issue. He said that Pakistan’s call to ease the debt burden had found significant support.
This issue was discussed at the last G-20 meeting, the main forum for international economic cooperation, which was held via video conference. The leaders expressed concern about the consequences of the Covid-19 outbreak for developing and developing countries (LDC) and agreed on the need for a global financial safety net. However, proposals for support to these countries have not yet been formalized.
Pakistan’s foreign debt is currently around $ 107 billion.
The FO meeting discussed the prospects for debt re-profiling and how the foreign ministry could help build a coalition for this purpose. Input was also given to perfect Pakistan’s proposal in this regard.
Speaking at the meeting, Mr Qureshi said debt reduction and restructuring were needed to save lives and help developing countries achieve their targets for sustainable development.
Pakistan’s permanent representative at the United Nations in New York Amb Munir Akram and in Geneva Amb Khalil Hashmi were asked to increase their efforts in this matter at international forums.
SCO: Continuing his contact with the Covid-19 pandemic, FM Qureshi spoke Monday with the Secretary General of the Shanghai Cooperation Organization (SCO) Vladimir Norov.
During the conversation, the two discussed strategies for containing the spread of the new corona virus and the challenges posed by the developing health crisis.
The foreign minister hopes that the SCO will assist in taking Pakistan’s proposal for debt reduction and restructuring going forward.
Mr Norov said the proposal was “a necessity at the moment”.
Published in Dawn, April 7, 2020
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