(Reuters) – Pakistan should suspend international debt repayments and restructure loans to creditors after recent floods exacerbated the country’s financial crisis, the Financial Times reported on Friday, citing a UN policy memo.
A memorandum by the United Nations Development Programme to be shared with the Pakistani government this week states that the country’s creditors should consider debt relief so that policymakers can prioritize funding for their disaster relief, the newspaper said. Not repaying the loan.
Pakistan had earlier estimated damages at 30 $1 billion, with both the government and UN Secretary-General António Guterres blaming the floods on climate change.
The memorandum further proposes a debt restructuring or swap where creditors will forgo repayments in exchange for Pakistan agreeing to invest in climate-resilient infrastructure.
Floods have affected 33 millions of Pakistanis, caused billions of dollars in damages rs suffered, and killed 1,500 people – sparking fears that Pakistan will not be able to pay its debts.
