Pakistan, which has been grappling with the worst floods in 30 years, is expected to suspend international debt repayments and restructure loans with creditors as the unprecedented natural calamity adds to the country’s financial crisis in cash-strapped, a news outlet reported citing a United Nations policy brief. as said Friday.
The memorandum shared by the United Nations Development Program with the country’s government suggested that Pakistan’s creditors should consider debt relief so that policymakers can prioritize funding for its disaster response rather than repayment of the loan, the Dawn newspaper reported.
Pakistan’s debt and total debts have soared to 59.7 trillion rupees this year, an increase of 11.9 trillion rupees or 25% from the previous financial year, according to the State Bank of Pakistan .
The Pakistani government, which blamed the floods on climate change, said the calamity had caused an estimated loss of $30 billion as a third of the country is currently submerged under water, leading to widespread loss of infrastructure such as roads, bridges and farmland. , with the exception of cattle.
Floods in Pakistan which affected more than 33 million people across the country left more than 1,574 dead and thousands injured.
The devastation is enormous with over a million homes destroyed, four million acres of crops lost, an estimated 900,000 head of cattle swept away and thousands of miles of roads destroyed.
The note suggested debt restructuring or swaps, where creditors would waive repayments in exchange for Pakistan agreeing to invest in climate-resilient infrastructure.
The massive damage caused by the floods, which affected one in seven Pakistanis, raised fears that the cash-strapped country may not be able to repay its debts.
UN Secretary-General Antonio Guterres, who also recently visited flood-affected areas of Pakistan, spoke forcefully this week to world leaders gathered for the opening day of the session of the The United Nations General Assembly urged lenders to consider debt reduction to help those nations facing potential economic collapse.
“Creditors should consider debt reduction mechanisms such as debt-climate adaptation swaps,” he repeated at the UNGA, adding that this measure could “save lives and livelihoods in Pakistan. , which is drowning not only in floodwaters but also in debt”.
Following the deadly floods in the country, Pakistan asked the World Bank to divert $1.5 billion to $2 billion in funding under the program to reallocate slow-moving projects to areas where the deluge caused devastation, reported Geo News.
According to sources, the government may further request the International Monetary Fund (IMF) for additional financing, according to the report.
Separately, the UN Secretary General told Prime Minister Shehbaz Sharif that he planned to hold a donors’ conference either in New York or somewhere in Europe to raise funds for flood victims in Pakistan.
The Prime Minister said that while the date for the proposed donors’ conference had not yet been decided, “it will be held soon”.
On August 30, the United Nations and Pakistan appealed for $160 million in emergency funding for flood victims, but so far the country has only received a quarter of that amount. , UN officials revealed earlier this month.
The prime minister also said he would carry the voice of flood victims to the rest of the world when he addresses the 77th session of the UN General Assembly on September 23.
Meanwhile, around eight United Nations human rights experts have called on the international community to step up assistance to flood victims and ensure that international recovery efforts are guided by human rights law and standards. of man.
“It is important that international relief efforts are guided by human rights, prioritizing humanitarian assistance and relief for the most vulnerable. In relocating those left homeless by climate change-induced flooding, Pakistan must renew its focus on land rights and security of tenure,” the experts said.
The eight experts included Balakrishnan Rajagopal, special rapporteur on the right to adequate housing, Attiya Waris, independent expert on the effects of foreign debt and Obiora C. Okafor, independent expert on human rights and international solidarity.
Hundreds of thousands of flood-displaced people are living in the open, and dozens have died from disease and flooding since the start of the monsoon season.
The stagnant floodwaters, spread over hundreds of miles and likely to take two to six months to recede, have already led to widespread cases of skin and eye infections, diarrhoea, malaria, typhoid and dengue fever.
Despite the efforts of the government and local and foreign humanitarian organizations, many people are in desperate need of food, shelter, medical assistance and medicine, with many displaced families complaining of being forced to drink and cook with unsanitary water.
The government has deployed thousands of additional doctors and paramedics to the country’s worst-hit province to contain the spread of diseases that have killed more than 300 flood victims, officials said.
The death toll from the disease last week prompted the World Health Organization to sound the alarm about a “second disaster” as doctors on the ground rush to tackle outbreaks.