UNITED NATIONS, Feb 15 (APP): Pakistan has called for reforming the international debt architecture to make it more equitable, sustainable, and responsive to the needs of developing countries.
“In the absence of a predictable global system for restructuring debt, most countries facing debt-distress are opting to continue servicing their debts, at the cost of diverting resources from areas critical for long-term growth and development, such as health and education,” Senator Syed Faisal Ali Sabzwari told the Annual Parliamentary Hearing, a joint initiative of the President of UN General Assembly (UNGA) and the Inter-Parliamentary Union (IPU).
Pakistan, he said, has suffered more not only because of pandemic but also of environmental disasters that hit the country. “And most of them are not of our doing.”
Senator Sabzwari said that given the increasing role of public debt in many countries’ economies, parliaments can play an essential role in scrutinizing government debt to safeguard fiscal health and protect future generations from excessive debt burdens.
“This can encompass passing legislation that requires clear limits on government borrowing,” he said, adding, “We have a legislation but again, we are debt distressed country and we have to compromise a bit on GDP (Gross Domestic Product).”
Senator Sabzwari underscored the need for a reform of the international debt architecture, which he said, should encompass a debt sustainability analysis; mainstreaming of state-contingent clauses in all lending instruments; suspending IMF surcharges; setting a multilaterally agreed ceiling for debt servicing; scaling up debt swaps for SDGs; and establishing a new multilateral debt workout mechanism, under the UN auspices.