As the damage and loss of life continue to rise as a result of the devastating floods, the conversation surrounding relief and debt restructuring has picked up pace and has progressed beyond speeches and twitter timelines. It is being reported that the UNDP is set to hand a memorandum to the Pakistan government this week that says that its creditors should consider debt relief in the wake of the floods and the resulting devastation.
In the aftermath of this tragedy, there has been growing discourse about the alarming amount of convergence between debt vulnerability and climate-change vulnerability in the developing world. Pakistan is among the top ten countries most adversely affected by climate change, and like all debt-distressed communities, it is ill-prepared to direct resources towards climate change adaptation action and mitigation efforts. Keeping this in mind, the memorandum in question proposed debt restructuring or swaps, in which creditors would let go of repayments in exchange for the country’s agreement to invest in climate change-resilient infrastructure.
This is an encouraging development as there is a lot of new research coming up these days about how this could be an innovative solution for financing climate change adaptation and mitigation measures in countries that are most vulnerable. With the IMF also agreeing to ease up the structure of the programme in light of the current situation, we must build on this momentum and act now to secure more tangible commitments from our partners and lenders.
While the assistance that has been offered from countries around the world is commendable, there is a yawning gap between what Pakistan needs and what it has received thus far. The government is also urging European leaders to grant Pakistan a moratorium on its debt obligations, and also plans on approaching Beijing for relief—to which it owes about 30 percent of its external debt. Time is of the essence given how short the attention span of the international community is. We must continue pressing on the issue of adequate compensation because there is no other way for Pakistan to recover from this disaster, and it is the least that the international community can do if it is actually serious about climate justice.