“We have requested (United Nations) secretary-general and European leaders to give us relief. How can the world expect us to stand on our own feet? It is simply impossible.”
By Staff Reporter
KARACHI: Prime Minister Shehbaz Sharif said on Friday “all hell will break loose” if the flood devastated Pakistan is not provided with debt relief by rich countries.
Sharif sought a moratorium on Pakistan’s debt repayment from the Paris Club (a group of rich creditor countries) and others, saying there is a “yawning gap” between what is being asked for and what is available.
“We have requested (United Nations) secretary-general and European leaders to give us relief. How can the world expect us to stand on our own feet? It is simply impossible,” Sharif said in an interview with Bloomberg TV. “We are among the top 10 most vulnerable countries to climate change.”
Sharif thanked world leaders for speaking about Pakistan and its plight at the United Nations General Assembly.
“Many world leaders have discussed and openly said that Pakistan needs support more than ever and this shows the sincerity of these leaders. But time is running out and we are racing against time,” he said. “What the world has done is commendable but it is far from meeting our needs. We can’t do it alone.”
Later in the day, Sharif told the UN General Assembly’s annual high-level debate that no words can describe the shock the country is living through or how the face of the country lies transformed.
“For 40 days and 40 nights a biblical flood poured down on us, smashing centuries of weather records, challenging everything we knew about the disaster, and how to manage it.”
The Prime Minister noted that some 33 million people are now at risk of health hazards; more than 13,000 kilometers of roads have been damaged; one million homes have been destroyed and another million damaged, and four million acres of crops have been washed away.
“Pakistan has never seen a starker and more devastating example of the impact of global warming,” he stressed. “Life in Pakistan has changed forever.”
Sharif said nature has unleashed her fury on Pakistan without looking at its carbon footprint, which is next to nothing. “Our actions did not contribute to this.”
BOND YIELD PLUNGES
Meanwhile, Pakistan’s bonds slumped to just half their face value on Friday after the Financial Times said the United Nations was urging the cash-strapped country to restructure its debt.
A memorandum the United Nations Development Programme (UNDP) is set to hand Pakistan’s government this week says its creditors should consider debt relief in the wake of the floods, according to the Financial Times.
The memorandum further proposed debt restructuring or swaps, in which creditors would forego some repayments in exchange for Pakistan’s agreement to invest in climate change-resilient infrastructure, the paper said.
The bond market reaction on Friday strengthened fears of another default by Pakistan, hammering its international market government debt.
One of the main sovereign bonds due for repayment in 2024 slumped more than 10 cents to about 50 cents on the dollar, while another due in 2027 fell to about 45 cents.
However, finance minister Miftah Ismail said the country would not seek any relief from commercial banks or Eurobond creditors.
“Given the climate-induced disaster in Pakistan, we are seeking debt relief from bilateral Paris Club creditors. We are neither seeking nor do we need, any relief from commercial banks or Eurobond creditors,” Ismail said in a tweet.
“We have a $1bn bond due in December which we will pay on time and in full. We have been servicing all our commercial debt and will continue to do so. Our Eurobond debt is only $8 bn due between now & 2051. That’s not a large burden. A significant portion of our debt is from friendly countries who have said they will re-roll their deposits.”
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