Pakistan is facing a dual challenge of overcoming the pandemic and saving people, particularly the most vulnerable segments of the population, from economic deprivation and hunger due to lockdown. On the other hand, the country’s total external debt stands around $105 billion, and the pandemic response will drive it further higher. Just the mark-up paid on external debt will exceed Rs. 300 billion for 2020. Pakistan will require around $15 billion in the next fiscal year to take care of the needs in the absence of the exports and remittances and shortfall that would come from the FBR revenue. Even under these challenging circumstances, the GOP has already provided an $8 billion package under the ‘Ehsaas cash distribution programme’ to support people and businesses affected by the lockdown in the country due to coronavirus.
In April 2020, Prime Minister Imran Khan appealed for a “Global Initiative on Debt Relief” for developing countries who face unprecedented health and economic challenges across the world where thousand have already lost employment, and millions are in danger of becoming unemployed. The Global Initiative on Debt Relief seeks to bring together stakeholders on a single platform to promote coordinated health and economic response and aims at laying ground for urgent debt relief to the developing countries by providing them fiscal space and financial relief through enhanced debt relief and restructuring without arduous conditionalities.