Cities have dug into ghost towns, factories abandoned, and businesses shocked. COVID-19 has battered the global economy and some are warning the fallout could be worse than the 2008 global financial crisis or even the Great Depression. For countries like Pakistan, already billions of dollars in debt, the impact will be even greater, Pakistan’s Prime Minister Imran Khan said.
“Because of the effects of the economic slowdown. You know, my worry is poverty and hunger. That worries me much more right now. And for that, I think, you know, the world community has to think of some sort of debt right of for countries like us which are very vulnerable. At least that will help us in coping with it”.
It is not just pocketed on finance ministers from several African nations have called for the suspension of debt interest payments. Even the who is Director General tendrils Adam Gabriel says called for debt relief.
Developing Countries home to a quarter of the population will likely be hit hardest by COVID-19. At this critical moment in history, broad agreement on debt relief will be key to allowing nations with fragile health systems and economies to channel their resources into saving lives.
It is a call echoed by a group of hundred and 50 civil society organizations that are calling for developing countries’ debt repayments to be dropped this year. There is a precedent for this in 2001. Debt relief to the tune of $34 billion was given to 23 developing nations to help them tackle poverty.
In 1953 20 major powers wrote off most of Germany’s debt and risk
structure the rest to be paid in installments at a lower interest rate. But to reach an agreement on debt relief will be difficult.
On Wednesday, EU finance ministers failed to agree on a rescue package for the worst-hit economies in Europe. But by freeing up funds for poor countries to deal with the COVID-19 pandemic now, they might be more able to contribute to rebuilding the world’s economy. Later