Campaign group calls on governments to cancel Pakistan?s debt

The group, whose members include the Baptist Union of Great Britain, the Evangelical Alliance and Christian Aid, fears the country’s annual $3 billion debt may dwarf the levels of emergency aid being committed to the country in the wake of devastating floods. 

Vast areas of Pakistan have been deluged by heavy monsoon rains in the last month in a disaster that has been compared to the 2004 Boxing Day tsunami and the massive earthquake that struck Haiti in January. 

The Jubilee Debt Campaign expressed concerns over the World Bank’s decision to give Pakistan nearly $3 billion in new loans to cope with the disaster, rather than provide grant-aid. 

The UN said it had so far raised 70 per cent of the $460 million funds needed to help Pakistan but the Jubilee Debt Campaign said that even this sum may be dwarfed by debt repayments “unless serious relief is instituted”. 

The group is calling on the British Government specifically to repudiate its loans to Pakistan on the grounds of a “state of necessity” and call on bilateral and multilateral creditors to institute a two year moratorium on all debt service payments from Pakistan. 

It also wants to see the British Government lead efforts towards the establishment of up-front funding for disaster preparation related to climate change. 

Nick Dearden, Director of Jubilee Debt Campaign, said it was “criminal” that Pakistan was being made to repay borrowers who had extended “unjust loans” to military governments over decades. 

“It is vital that desperately needed emergency aid is not effectively swallowed up in debt repayments and a freeze on such payments must be called immediately,” he said. 

"But the international community also needs to accept responsibility for the poverty of Pakistan. 

“If Pakistan is to build up the infrastructure to withstand such appalling disasters in future it must be freed from its debt trap.” 

He called for a debt audit on Pakistan and for the immediate cancellation of any debts found to be “unjust and unbeneficial”. 

He added: “Most certainly supposedly anti-poverty institutions like the World Bank should not be making Pakistan’s debts even worse.” 

Unicef’s directory of emergency operations, Louis-George Arsenault, today expressed his dismay at the lack of international support being shown to Pakistan despite millions experiencing hunger and homelessness. 

Arsenault said it was the worst humanitarian crisis he had seen in decades. 

“Right now, our level of needs in terms of funding is huge compared to what we’ve been receiving,” said Arsenault. 

The Disasters Emergency Committee in the UK renewed its appeal as it warned that the scale of destruction caused by the floods was on a par with Haiti and the Asian tsunami. 

The British public’s donations to the DEC’s emergency appeal have topped £29 million. 

The floods have killed at least 1,600 people and left millions homeless, prompting fears from Christians in Pakistan that Islamic extremists may win more supporters through the distribution of aid. 

One Pakistani Christian overseeing the aid efforts of Barnabas Fund said: “The Islamists are helping people in areas where even the government has failed to reach. 

“In the time of need, the government’s slow response has given them [the extremists] the opportunity to win the hearts of the affected people.”