IMF, China, Paris Club urged to aid Pakistan's economic woes - Financial Times report

February 06, 2023 (MLN): Pakistan is facing a dire economic situation, with a risk of default and a shortage of basic necessities like food and medicine.

The country's political and military leaders have been criticized for decades of corruption, dysfunction, and poor governance, and it's feared that the upcoming elections will only lead to further toxic wrangling instead of progress.

To turn things around, politicians must put the public first and prioritize their needs.

Foreign creditors and multinational institutions must come to the rescue and provide financial assistance to prevent default.

The country's foreign exchange reserves are alarmingly low, with a massive devaluation of the rupee due to the government's removal of the dollar cap.

Public debt is also a major concern, standing at $270bn, or 79% of the GDP.

According to the Financial Times, “China is the largest bilateral creditor to Pakistan, holding around $30bn of the country's debt.”

However, Beijing denies any claims that its lending creates a "debt trap" for emerging markets.

In order to bring Pakistan out of this economic crisis, the International Monetary Fund, China, and the Paris Club of creditor nations must come together for debt-restructuring negotiations.

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