EDITORIAL: On the sidelines of the ongoing spring meetings of the International Monetary Fund/World Bank in Washington DC a working group of the Borrower’s Platform initiative was launched, currently in its interim phase to be implemented during the Autumn meeting (October) of the IMF/World Bank, with the objective of strengthening debt sustainability, transparency and peer learning among borrowing countries.
United Nations Trade and Development (UNCTAD) is to serve as its secretariat – an entity that uploaded on its website the following: while creditor coordination mechanisms have long been established borrowing countries have lacked a dedicated platform to exchange experiences, share information and build technical capacity. It (the Platform) would contribute to more sustainable financing outcomes and over time it may send a positive signal to markets by enhancing debt sustainability, and reducing uncertainty for investors – helping ensure that rising debt burdens do not derail development prospects.
Egypt is to be the chair of the Platform and Pakistan the Vice Chair. Many regard the selection of chair and vice chair as particularly appropriate: Egypt is the largest annual recipient of US military assistance (after Israel), 1.3 billion dollars, with more than 30 billion dollars injected into the economy since 2010, and yet it is on its 15 Extended Fund Facility (EFF) IMF programme at present, with a previous programme loan supervised by Reza Baqir, the then head of IMF mission in Egypt, who was then appointed as the Governor of State Bank of Pakistan in 2013.
Pakistan is on its twenty-fourth IMF programme loan, an EFF, and over time has been increasingly relying on rollovers by three friendly countries to strengthen its reserves, which are now two after 3.45 billion-dollar loan recall by the United Arab Emirates and a pledge of an additional 3 billion dollars by Saudi Arabia.
The UN Trade and Development website notes that total external debt has reached 11.7 trillion dollars in 2024, the cost of servicing that debt has exploded to comprise of almost 10 percent of government revenue with 54 countries spending more on debt that on health or education. And that it is not a crisis coordination mechanism, nor a forum for collective debt restructuring negotiations nor a standard setting for collective bargaining but a forum for borrowing countries to engage in peer learning, share experiences and advance collective advocacy, albeit in a voluntary and non-binding manner.
Pakistan’s Finance Minister Muhammad Aurangzeb while speaking at the launch of the Borrowers Platform stated that the “general sentiment is that the existing lending mechanisms remain largely creditor driven and insufficiently responsive to borrowers’ unique requirements,” adding that “together let us amplify borrower voices, invite other eligible countries share expertise through the steering committee platform and build stronger foundations for a sustainable future.” This statement appears to not understand the basic thrust of the Platform which is to mitigate the need for more loans through formulating and implementing policies that can take a debtor country out of its debt trap, a trap sprung by flawed policies reflected by not curtailing current expenditure, thereby mitigating the need for foreign borrowing or enforcing the severely contractionary monetary and fiscal policies that are the IMF conditions imposed on both Egypt and Pakistan with severe repercussions on the growth rate that, in turn, has fuelled poverty.
To conclude, it must be understood that the Forum is designed to provide a common platform for countries subjected to natural disasters (Pakistan’s ongoing Resilience and Sustainability Facility by the IMF falls in this category) as well as man-made disasters associated with wars or, in other words, external factors while any flaws in domestic policies must be dealt with by the political leadership rather than relying on standard multilateral conditions that have not alleviated debt or poverty in the debtor countries.
Copyright Business Recorder, 2026
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