ISLAMABAD: A consortium of civil society organisations (CSOs) has launched a campaign urging international financial institutions (IFIs) to cancel the debts of Pakistan and put people’s rights and needs ahead of debt services.

According to a statement, the consortium led by Fair Finance Pakistan (FF Pakistan) has launched a new campaign ‘Cancel the debt for people of Pakistan,’ which calls on IFIs to cancel Pakistan’s debt after the devastating floods that washed away one-third of land and according to government of Pakistan’s estimates caused $30 billion in economic losses, adding to the country’s debt burden.

The campaign was launched just as COP27 ended, where Prime Minister Shahbaz Sharif categorically stated that Pakistan was a victim of catastrophic climate-induced floods that it did not cause. The campaign stresses the urgency of suspending Pakistan’s debt repayments and urging the international community to support Pakistan focus on recovering from the floods, and become more resilient to the effects of climate change.

Due to its heavy debt burden, Pakistan is unable to fully address the impact of climate change on its citizens, public infrastructure and environment. According to the State of Global Air, every year 128,000 people die in Pakistan due to air pollution-related illnesses caused by climate change.

Pakistan Post Disaster Needs Assessments (PDNA) reported that the catastrophic floods had killed over 1,700 people and one million livestock, damaged four million rich agricultural land and crops and destroyed over 11,000 kms of roads and rail tracks in the country.

Asim Jaffry, Country Programme Lead, FF Pakistan, in a Twitter message wrote: “IFIs must keep people of Pakistan’s rights ahead of debt service. Debt cancellation is critical for Pakistan to build climate-resilient infrastructure, provide clean air and social safety net for its people.”

He noted that floods in Pakistan had severely impacted lives and bread and butter for millions of people.

“Human suffering cannot be ignored. While debt cancellation may affect Pakistan’s credit rating and bring other economic challenges, the civil society stands with the 33 million voiceless people most impacted by floods and urge the creditors to waive off our debt,” he said.

In its latest climate change development report, the World Bank has estimated climate disasters and air pollution are projected to shrink Pakistan’s GDP by 20pc by 2050. The report says Pakistan needs $348bn or 800pc more than the current annual budget to stop climate-induced disasters. Just $48bn is available through public and private financing and the projected gap of $300bn in the current annual budget is likely to plunge Pakistan deeper into a debt crisis to compensate for the damage created by floods.

Speaking at the campaign launch, Hussain Jarwar, CEO Indus Consortium, said: “Pakistan’s unsustainable debt levels means less fiscal space and opportunities to address adaptation and mitigation and recovering from loss and damage after a climate disaster. Without debt cancellation, Pakistan will be forced to continue taking on more debt to meet the huge economic costs of damage created by floods. This must stop.”

The campaign urges its partners and the global civil society to join voices demanding to cancel Pakistan’s debt and divert it to build climate resilience and invest in essential public services.

Meanwhile, under the aim that preference shall be given to women entrepreneurs, persons with disabilities, minorities and transgender persons to re-establish their businesses, Pakistan Microfinance Investment Company (PMIC) has set up a business revival fund for flood affected farmers and entrepreneurs by putting up Rs25 million grant from its resources.

According to a statement, the support will rehabilitate and revitalise livelihoods of 1,000 flood affected families by providing grants to replenish livestock, materials and inventories for small farmers and enterprises.

Commenting on the initiative, Yasir Ashfaq, CEO of PMIC, iterated the commitment to financial inclusion and creating social impact in the country.

“The devastation caused by floods is unprecedented and we are also witness to the courage and the resilience of the communities in the face of adversities. We saw this during floods of 2010, droughts in 2018, Covid-19 of 2020 and now with floods of 2022,” he said.

It is worth mentioning that Pakistan is amongst the top five countries affected by climate change making it vulnerable to natural disasters. These natural disasters have badly impacted Pakistan’s economic wellbeing. However, the prevalent situation due to the floods in 2022 has been unprecedented with huge losses in lives and businesses. The communities at the bottom of the economic pyramid are most vulnerable and face the brunt of the disasters.

Published in Dawn, November 27th, 2022

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