Pakistan, facing a severe economic crisis, is on the verge of bankruptcy. The remaining Pakistani economy has been shattered by the Corona virus. Meanwhile, its biggest “donors,” Saudi Arabia and the United Arab Emirates, are seeking to collect their multibillion-dollar debt. At the same time, China, Pakistan’s eternal friend, is also reluctant to give loans to Pakistan. For this reason, Imran Khan has asked his debtor countries to repay the loan tranche until the end of the corona virus outbreak.
Asked to stop debt collection until the corona crisis
Imran Khan called on the international community to suspend loan repayments to low-income and worst-affected countries and to reverse the responsibility of least developed countries until the corona virus outbreak is over. Pakistan’s economic woes have been compounded by the cash flow crisis, and the Imran Khan government is organizing financial support from global bodies, including the International Monetary Fund (IMF), to overcome the crisis.
Imran Khan appealed to lending countries to the UN
Presenting the ten-point agenda for immediate action to the UN General Assembly special session on Kovid-19, Khan highlighted the steps the international community should take at such a time. The first thing on their list would be to call for a suspension for low-income and worst-hit countries until the debt repayment epidemic is over. The second priority will be the request for loan waivers for the least developed countries which cannot pay their debts.
Saudi Arabia withdraws financial support for Pakistan
Angered by Pakistan’s treatment of Kashmir, Saudi Arabia withdrew its financial support in May. In October 2018, Saudi Arabia announced a $ 6.2 billion 3-year financial package to Pakistan. This included $ 3 billion in cash assistance, while oil and gas was to be supplied to Pakistan for the rest of the money.
Debt will represent 90% of Pakistani GDP
According to a Pakistani media report, Pakistan’s public debt will increase this year to 37.5 trillion Pakistani rupees, or 90% of gross domestic product (GDP). The report says Pakistan will spend just 2.8 trillion rupees on debt repayment this year, or 72 percent of the Federal Board of Revenue’s estimated tax revenue. When the Pakistani government Tehreek-e-Insaf (PTI) came to power two years ago, the public debt was Rs 24,800 lakh crore, which is growing rapidly.