Pakistan: Drop the Debt
Pakistan needs grants rather than loans from the international community - and it also needs debt relief to fight poverty.
The terrible flooding which has gripped Pakistan is having an impact on tens of millions of people, in a country where 60% of the population is already living below the poverty line.
Donations to help the situation are vital. But Pakistan will need more than aid if it is to emerge from this crisis, and to fight the long-term poverty that has blighted that country for so long.
(Photo: Qasim Berech/Oxfam)
Western countries like our own have a responsibility to lift Pakistan's debt burden which is unjust and totally unpayable.
For many years Pakistan was run by undemocratic regimes, who were kept in power with Western support, including through large loans which did little for ordinary people. Today this history of reckless lending means Pakistan repays its loans at a rate of $3 billion every year.
Indeed, part of the recently announced assistance to Pakistan includes nearly $3 billion of new loans from the World Bank and Asian Development Bank. This will only add to Pakistan's enormous and unsustainable $49 billion debt.
Pakistan should not have to mortgage its future by being forced to borrow for relief.
Western countries and institutions must take responsibility for their role in Pakistan's troubled history. Join us in calling on the British Government to ensure that Pakistan receives justice as well as charity.
Only such an approach will ensure that Pakistan is able to withstand similar natural disasters when they happen in the future.
TAKE ACTION: TELL ANDREW MITCHELL AND GEORGE OSBORNE TO DROP THE DEBT.
We are asking the Government to:
- Call on all bilateral and multilateral creditors to institute a two year moratorium with no interest accrual on all of Pakistan's debt payments to free up $3 billion per year for recovery. This should be a first step towards permanent debt cancellation.
- Use their World Bank seat to ensure that Pakistan is given aid in the form of grants not loans. We think this accords with the Government's pre-election policy paper on International Development, ‘One World Conservatism', to give grants rather than loans wherever possible and encourage the World Bank to do the same.
- Support the auditing of Pakistan's debt to examine the legitimacy of these debts, and cancel those found to be unjust