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Business & Finance

PM Khan urges global bodies to provide 'fiscal space' to developing countries

  • “The COVID-19 pandemic is not over we must ensure the people are secure and ensure earliest possible access to vaccines being produced but on an affordable and equitable basis,” said PM Khan.
  • “The rich countries have injected $20 trillion to stimulate their economies. Our economy has been equally affected but we do not have the capacity to create such liquidity,” he said
Updated 04 Mar 2021

Prime Minister Imran Khan on Thursday has urged the world to provide developing countries a fiscal space to recover from the economic impact of the coronavirus pandemic.

Addressing the virtual 14th Summit of the Economic Cooperation Organization (ECO) on the focus of the present Summit i.e. regional economic cooperation in the aftermath of COVID-19 PM Khan shared Pakistan's perspective on COVID-19 challenges, he shared that $1 trillion leaves poor countries to rich countries every year in illicit flows.

“I have proposed a five-point plan to provide developing countries the fiscal space to recover from COVID-19 crisis and this includes debt relief, SDR creation, and redistribution, concessional financing, mobilization of climate finance as this is another crisis looming ahead and then ending illicit financial flows and the return of stolen assets back to the developing countries,” said PM Khan.

PM Khan congratulated the President of Azerbaijan on the successful liberation of Azerbaijan occupied territories.

“Like the rest of the world, the member states of the ECO have been severely affected by the unprecedented health and economic crisis unleashed by the COVID-19 pandemic. The world is grappling with the pandemic’s multiple dimensions. The full extent of its health, social, financial, and economic impact on countries has yet to be fully determined,” said PM Khan in his address

“It is evident that developing countries including ECO members have been disproportionately affected. Our economies have contracted, trade has declined, poverty and inequality has increased,” he said.

Talking about the measures taken by his government in Pakistan, PM Khan said, “We in Pakistan realize that we must prevent our people from dying from the virus and from hunger. We face the twin challenges like a lot of the developing world.”

He said that the government pursued a people and poor-centric approach and doing this very difficult balancing act of saving lives, securing livelihoods, and at the same time stimulating the economy. “An extremely difficult balancing act,” said PM Khan

Prime minister said that despite the financial constraints his government allocated an unprecedented $8 billion to support the poor and the most vulnerable households and then small businesses with direct cash handouts and then subsidies to the poor under the government’s Ehsaas program.

“The COVID-19 pandemic is not over we must ensure the people are secure and ensure earliest possible access to vaccines being produced but on an affordable and equitable basis,” said PM Khan.

PM was of the view that the vaccine must be declared as a ‘global public good’ because “no one will be safe from the virus unless everyone is safe.”

He informed that Pakistan has begun its vaccination drive but so far it has remained concentrated on the frontline health workers

Talking on the need to address the economic impact of the pandemic. He said that the world economy has contracted by 5 percent.

“The rich countries have injected $20 trillion to stimulate their economies. Our economy has been equally affected but we do not have the capacity to create such liquidity,” he said

He also pointed out that discriminations such as xenophobia and Islamophobia have exacerbated in various parts of the world amid the pandemic. "I have witnessed this in our immediate neighbourhood. The COVID-19 lockdown has enabled the suppression of people in occupied territories struggling for the right to self-determination."

PM Khan urged that it is essential to reject any attempt to link Islam and terrorism, calling it the 'biggest injustice' being committed towards the Muslims across the world.

"Similarly we must oppose attempts made in the name of freedom of expression, which is used to cause pain to Muslim by derogating Holy Prophet Muhammad (Peace Be Upon Him)."

Addressing the member countries Prime Minister Imran Khan proposed a six-point agenda. "First, we need to recover robustly from the health and economic crisis induced by the pen demic. We must mobilize the national and international resources required for this purpose."

"Second, we must adapt to develop a resilient healthcare system to respond to such crisis in the future we must possess the capacity to produce the medical equipment and medicines essential to respond to chronic and infectious diseases."

"Thirdly, we must develop an integrated transport system to facilitate both intra-SCO trade and also serve as a pathway for trade between the major economies to the east and west and north to south."

"Fourth, we must implement the cross border projects already agreed under the ECO members including TAPI gas pipeline and the CASA- 1000. Establishing an investment agency and organising an annual investment fair where investment-ready projects could be presented to ECO and global investors are ideas that can be explored."

"Five, studies indicate that our mutual trade which is just 8pc of our total trade, this could be expanded 10 fold, enhancing transport links will help but we should promote conscious measures for trade promotion."

"Sixth, to remain competitive we must promote knowledge-based economies and it needs that we enhance expenditures on research and development and focus on digitization especially extension of broadband to rural parts of our countries."

It is pertinent to mention that Pakistan is one of the founding members of ECO, in addition to Iran and Turkey.

The Organization was formed in 1985 from the erstwhile Regional Cooperation for Development. Afghanistan, Azerbaijan, Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan later joined as members of ECO.

As a founding member, Pakistan actively contributes towards the advancement of the goals and objectives of ECO and remains strongly committed to its aims of promotion of effective regional cooperation, with a focus on communications, trade, culture and connectivity.