Islamabad: Prime Minister Imran Khan proposed to the United Nations General Assembly a 10-point agenda to save poor countries from the effects of the coronavirus pandemic.
In a recorded address to the UNGA, PM Khan said the COVID-19 pandemic is the most serious global crisis since World War II. Hopefully when a vaccine is available it will be offered to everyone, he said.
The poorest countries are suffering the most due to this economic contraction, he said, adding that 100 million people in developing countries are at risk of being pushed into extreme poverty.
Rich countries have pushed $13 trillion as economic stimulus packages but developing countries don’t have the resources to afford such a massive economic stimulus, said PM Khan. “They are struggling to find even a fraction of the $2 trillion to $3 trillion they need to recover from pandemic.”
He touched on Pakistan’s policy to combat the virus and said it was aimed at ensuring that we save people from the virus but also prevent them from dying of hunger.
“We provided a relief package of $8 billion, which is 3% of our GDP,” the premier said, adding that the government balanced supporting the poor and keeping the economy afloat.
“It worked so far but now are confronted with a far more aggressive second wave of the virus. We are facing the challenge of reviving and maintaining economic growth amid increasing cases of the virus.”
The IMF managing director had advised countries to spend as much as required to stimulate growth, but like many developing countries, Pakistan has has committed under the IMF programme to reduce the budget deficit and I’m sure other developing countries in our position are facing a similar dilemma, said PM Khan.
“How do you stimulate the economy and at the same time reduce your budget deficit?” he asked. The only way, according to him, is fiscal space to maintain and revive growth via additional liquidity.
He thanked the G20 countries for their decision to provide debt relief till June and the IMF and World Bank’s rapid lending facilities. But that money is not enough for developing countries to recover from the impact of the pandemic.
He said five developing countries have already defaulted and others may follow. Several are already on the brink of economic collapse, said the Pakistani prime minister.
The World Food Programme has laid bare distressing reports of famines in parts of the world. During the financing for development discussions, the UN secretary-general and prime ministers of Canada and Jamaica identified hundreds of options to financially support developing countries, said PM Khan, expressing his hope for concrete action soon.
We need to reform global financial architecture and build an inclusive and equitable debt management mechanism, he said, calling for a democratic trading system focused on the Sustainable Development Goals and a fair global tax regime.
He also laid out a 10-point agenda to avert economic collapse.
- Debt suspension till the end of the pandemic for low income and most stressed countries
- Cancellation of the debts of least developed countries
- Restructuring of the public sector debt of other developing countries under an agreed inclusive multilateral framework
- A general allocation of special drawing rights of $500 billion.
- Expanded concessional financing to lower income countries through multilateral development banks
- Creation of a new ‘liquidity and sustainability facility’, which should provide short term loans at lower costs
- Fulfillment of the 0.7% official development assistance commitments
- Mobilizing the required $1.5 trillion annual investment in sustainable infrastructure
- Achievement of the agreed target of mobilizing $100 billion per year for climate action in developing countries
- Immediate action to stop the massive illicit financial outflows from developing countries to rich countries, to offshore tax havens and at the same time, immediate return of their assets stolen by corrupt politicians and criminals back to these countries
He said the last point will benefit poor countries more than all other measures put together. Everyone agrees that a collective response is needed to recover from the COVID crisis and achieve the SDGs, and targets set by the Paris Agreements, said PM Khan. But at the same time, collective economic security is needed or else conflicts and disputes will persist and proliferate across the world.
“Guided by principles of the UN charter, we must all work collectively for an inclusive, stable and sustainable economic social and political order.”