Debt relief call

Prime Minister Imran Khan has made another appeal to wealthy nations to provide more debt relief to poor countries. Speaking at a UN conference, he cited the continuing — and arguable worsening — Covid-19 pandemic and the debt impact on the attainability of the sustainable development goals by 2030. Last year, PM Imran and other world leaders made similar appeals, which garnered significant media attention and could be credited for helping convince rich countries and international financial institutions to offer a variety of debt relief options to poorer countries.

While we hope this appeal will also bear fruit, we are not confident it will be significant. This is because most rich countries have spent heavily on their domestic economic support programmes and healthcare. The few that are still giving substantial aid have turned their focus to assistance in the form of vaccines, which, while necessary and commendable, will not heal the running and long-term problems associated with heavy debt.

But on that vaccine note, Imran also called for the expansion of the Covax vaccine programme, joining a chorus of world leaders demanding the same. Unfortunately, while several other poor countries, fearing the worst, have been trying for months to cobble together vaccine programmes for themselves, we had ‘forgotten’ to acquire any does in advance and will be even more reliant on Covax.

Imran also made calls for financial assistance for countries with balance of payments issues, which is unlikely to gain much support. This is because, as data published by the UN this week shows, much of Europe saw incoming foreign investment crash to negative levels. Several other rich and middle-income countries saw similarly bad numbers in 2020. Wealthy or not, these countries will be strapped for cash and unwilling to pay into an emergency fund for others at the expense of their own citizens.

But Imran did close his UN speech on a strong point, namely reminding wealthy nations of a counter-climate change commitment to mobilise $100 billion a year for climate action in developing countries. This commitment, unlike emergency Covid-19 relief, has been planned for over a decade. It would be disappointing if wealthy governments put off one form of imminent disaster relief for another.

Published in The Express Tribune, January 27^th, 2021.

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