Pakistan calls for measures to counterbalance shocks to global economy as UNDP warns about serious debt crisis in the poorest countries of the world

Pakistan calls for measures to counterbalance shocks to global economy as UNDP warns about serious debt crisis in the poorest countries of the world
United Nations Headquarters. Source: © Matthew TenBruggencate/Unsplash, 2020.

11-10-2022

Finia Hilmes

Pakistan & Human Rights Researcher

Global Human Rights Defence

On October 11th, 2022, the United Nations Development Programme (UNDP) in London joined institutions and charities warning that a serious debt crisis is now taking hold in the poorest countries of the world including Pakistan (Reuters, 2022).  

Particularly, in a new report, the UNDP estimated that 54 countries which account for more than half of the world’s poorest people are currently in need of immediate debt relief to prevent more extreme poverty as well as to give them a chance of dealing with climate change (Reuters, 2022).

The warning comes as the result of meetings held this week by the International Monetary Fund (IMF) and the World Bank in the midst of rising global recession worries and a crop debt crisis from Pakistan, Sri Lanka, Chad, Ethiopia and Zambia (Reuters, 2022).

The UNDP administrator, Achim Steiner, urged several measures to be taken such as writing off debt, offering wider relief to a greater number of countries and adding special clauses to bond contracts to provide leeway during crises (Reuters, 2022).

Furthermore, the UNDP’s reports called for recalibration of the G20-led Common Framework, a plan designed to help countries facing financial trouble due to the Covid-19 pandemic restructure debt, as so far only Chad, Ethiopia and Zambia have used it (Reuter, 2022).

Moreover, Pakistan, speaking as current chairman and on behalf of the “Group of 77” (developing countries and China) at the United Nations, urged for emergency measures to be taken to overcome the recent issues in the world economy such as the Covid-19 pandemic, geopolitical instability, and the spike in commodities prices which severely impacted the developing countries (Staff Report, 2022). Pakistan’s permanent representative to the UN, Ambassador Munir Akram, stated in the Committee of General Assembly, dealing with economic and financial matters, that recent issues in the world economy also created challenges to energy security and reversed any progress towards the UN’s Sustainable Development Goals (SDGs) (Staff Report, 2022).  

Ambassador Munir Akram emphasised that in order for Group 77 to overcome the current crises, restore their economies and achieve the SDGs, means of implementation need to be secured through a series of emergency measures that at the same time promote structural changes in the unequal and unjust international economic system (Staff Report, 2022).  

The measures suggested include the mobilisation of urgent humanitarian, economic and financial support to developing countries in economic distress, urgent action to moderate food prices through enlarging food production and by supporting small farmers’ access to seeds, fertiliser and finance, the insurance of access to energy for developing countries and the exploration of mechanisms to reduce the financial burden of energy imports and lastly the provision of urgent and adequate assistance to countries suffering from the impact of climate change (Staff Report, 2022).  Besides these measures, Ambassador Akram also pointed out the need for the international financial architecture to be aligned with the SDGs in order for developing countries to have access to loans at favourable rates as well as predictable and sustainable financing to support their resilience allowing them to compensate without delay in cases of natural hazards like the floods in Pakistan (Staff Report, 2022). Finally, Ambassador Akram called for the provision of access for developing countries to technologies to help them to green their economies as well as to lift restrictions that penalise them in terms of research and development (Staff Report, 2022).  

Sources and further reading: 

Reuters. (2022, October 11). Pakistan among nations staring at serious debt crisis: UNDP. Pakistan Today. Retrieved October 11, 2022, from https://www.pakistantoday.com.pk/2022/10/11/pakistan-among-nations-staring-at-serious-debt-crisis-undp/.

Staff Report. (2022, October 11). At UN, Pakistan urges measures to offset shocks to global economy. Pakistan Today. Retrieved October 11, 2022, from https://www.pakistantoday.com.pk/2022/10/11/at-un-pakistan-urges-measures-to-offset-shocks-to-global-economy/.