December 04, 2020: Prime Minister Imran Khan has proposed a ten-point agenda to world leaders to avert economic collapse due to the Covid-19 pandemic and called for debt suspension, drawing rights of USD $500 billion and return of stolen assets stashed in rich countries.
He was virtually addressing the U.N. General Assembly’s two-day special session on the response to the deadly coronavirus pandemic and forge a united path forward to better recovery, including access to a vaccine.
He said developing countries are facing a dilemma of how to stimulate the economy and yet at the same time reduce the budget deficit.
Imran Khan said the only way we can have the fiscal space to maintain and revive growth is through access to additional liquidity.
Underlining the need for reforming the international financial architecture, he called for building an inclusive and equitable debt management mechanism, constructing a democratic and SDG-focused trading system, and installing a fair international tax regime.
Besides, the Prime Minister also proposed concessional financing to lower-income countries through multilateral development banks; provision of loans at lower costs, mobilizing 100 billion US dollars per year for climate action in developing countries, and halting of illicit financial outflows from developing to rich countries.
Alluding to the effects of the pandemic, the Prime Minister said the Covid-19 pandemic has infected nearly 65 million people and killed sadly close to 1.5 million.
He expressed hope that whenever the vaccine is available, it must be offered to everyone.
He said we provided a relief package of around 8 billion dollars to support the poor and to keep the economy afloat during the Pandemic.
He proposed a ten-point agenda for urgent action, which called for;
- Debt suspension till the end of the pandemic for low income and most stressed countries.
- Cancellation of debt 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.
The Prime Minister said the pandemic caused immense human suffering and created the deepest global economic contraction since the great depression of the 1930s.
Prime Minister Imran Khan pointed that nearly 100 million people in developing countries would fall back into extreme poverty while on the other hand, the rich countries had injected $13 trillion as fiscal stimulus to revive their economies.
He said Developing countries just do not have the resources to afford such a massive economic stimulus. They are struggling to find even a fraction of the $ 2-3 trillion they require to recover from the pandemic.
Prime Minister Imran Khan in his address mentioned Pakistan’s successful policy of “smart lockdowns” and said these efforts were aimed at ensuring that not they save people from the virus, but also prevent them from dying from hunger.
The Prime Minister said that so far, their strategy has worked, but now the country was confronted with a far more aggressive second wave of the virus.
He said we are facing now the challenge of maintaining and reviving our economic growth as well as dealing with an increasing number of cases which are occupying our hospital beds,”.
The Prime Minister referred to the advice made by Managing Director International Monetary Fund (IMF) to the countries to spend as much as it was required, to stimulate growth, and said that like many developing countries, Pakistan was committed under their IMF program to reduce the budget deficit.