In essence, the continuous borrowing means that Pakistan is spending an enormous amount of its budget on servicing debt: Today more than half of government revenue goes towards paying foreign debt and this percentage will increase unless the country gets relief. Nor do they have enough to invest for the future: In health systems to get ready for unforeseen eventualities (e.g. For example, Zambia, which was reclassified recently (last year) as a low-income country, has by now spent nearly three years trying to restructure its debt, albeit with no success. As a result, Zambia has been in debt purgatory, shut out of IMF funds and unable to attract private investment while the talks continue. Finally, one feels that in order to meaningfully help countries currently drowning in debt, a Covid-era like two years pause in repayment of foreign debt should be reinstated to allow them some breathing room to not only bring their debt under control but to also make investments in a sustainable future.

Source: The Nation May 03, 2023 10:44 UTC