Economy one hour ago (Sep 23, 2022 01: 56AM ET)
Reuters. FILE PHOTO: A guy, displaced due to the floods, wades through flood water to fill the canisters, following rains and floods through the monsoon season in Sehwan, Pakistan September 20, 2022. REUTERS/Stringer/File Photo
(Reuters) -Pakistan should suspend international debt repayments and restructure loans with creditors after recent floods put into the country’s financial meltdown, the Financial Times reported on Friday, citing a UN policy memo.
The memorandum, that your UN Development Programme will tell Pakistan’s government this week, states that the country’s creditors should think about debt relief in order that policymakers can prioritise financing its disaster response over loan repayment, the newspaper said.
The country’s foreign office in Islamabad didn’t react to a Reuters obtain touch upon the memorandum. Pakistan’s finance minister and information minister cannot be immediately reached for comment.
Pakistan has earlier estimated the damage at $30 billion, and both government and U.N. Secretary-General Antonio Guterres have blamed the flooding on climate change.
The memo further proposed debt restructuring or swaps, where creditors would forget about repayments in trade for Pakistan agreeing to purchase climate change-resilient infrastructure, FT said.
Floods have affected 33 million Pakistanis, inflicted vast amounts of dollars in damage, and killed over 1,500 people – creating concern that Pakistan won’t meet debts.