Pakistan: Campaign launched to cancel debt

September 4, 2010
Committee for the Abolition of Third World Debt rally, Pakistan 2009. A new campaign has been launched in the post flood scenar

A multi-party conference in Lahore on August 29 has launched a campaign to cancel Pakistan's crippling foreign debt and to organise mass rallies in Lahore, Karachi and Islamabad. The first rally took place on September 2 in Islamabad.

The Labour Relief Campaign, in association with Oxfam Pakistan, called the conference to discuss the issue of debt repayment in the post-flood scenario. It was chaired by Aman Kariaper and Ammar Ali Jan.

Senator Hasil Bezinjo vowed to take the issue to Pakistan’s Senate and present a resolution to demand that government refuse to pay the foreign debt.

Twenty-eight political parties, trade unions, social movements and professional associations were invited to present their views.

The conference began with Khaliq Shah, from the Campaign for the Abolition of Third World Debt, who argued that there are strong legal, ethical and political arguments for the immediate suspension of debt servicing and the refusal of further loans. He also presented historical precedents from Latin America and Africa to support his argument.

Debt, in his view, is not merely a financial but also a political issue. He pointed out that debt incurred by dictators is considered to be illegitimate debt under international law and its burden should not be borne by future generations.

According to some estimates, he claimed, Pakistan’s debt has already been paid back at least eight times over. Hence, debt is an integral part of the system of re-colonisation common in the Third World.

Aasim Sajjad Akhtar, academic, writer and activist of the Workers Party Pakistan, said the debt rescheduling touted by dictator Pervez Musharraf as his big success in 2008 will take debt to more than 70% of Pakistan's GDP, approaching the 80% limit recognised by the World Bank as being unsustainable.

Akhtar said his group’s research showed that up to 80% of Pakistan’s debt was incurred during dictatorial regimes. Elaborating on the political aspects of the campaign, Akhtar questioned the rationale of the large military budget, which, even in this time of acute crisis, is not being reviewed.

In the open discussion that followed, all the delegates present debated the debt issue and its political ramifications.

Jamil Omar, president of the Awami Jamhoori Forum, suggested setting up a monitoring mechanism staffed and run by the network of activists represented in the conference to ensure transparency and accountability in the spending of funds freed up by the cancellation of debt.

Advocate Abid Hassan Minto, president of the Workers Party Pakistan, presented a detailed analysis of the current socioeconomic situation and suggested forming a committee of like-minded political and social organisations that would build a political movement based on the demands of the conference.
Instead of accepting new loan offers, Pakistan must stand for the total and unconditional cancellation of its foreign debt.

Time and again, countries facing tragedies, like Pakistan’s catastrophic flooding, are forced by international financial institutions and donor countries to mortgage their future as they borrow for relief and recovery efforts. Thus, the tragedy is magnified for years to come.

Speakers said that the recent floods are the worst disaster in Pakistan’s history. The country has been devastated from the northern areas to its southern tip. The state, stripped of its capacity to meet peoples’ needs by neoliberalism and militarism alike, has been found wanting — both in its long-standing failure to maintain existing infrastructure, and in its response to the calamity.

The conference also discussed the negative impact of global climate change in Pakistan. Evidence is emerging that links these floods to rising atmospheric temperatures, and thus to climate change.

Three-quarters of all carbon emissions have been produced by only 20% of the world’s population, and it is the poor in the developing world who are bearing the brunt of the resulting environmental degradation.

Rich countries should offer urgent reparations to Pakistan to compensate for suffering the cost of others’ industrialisation.

The following points were included in the conference resolution:

• Immediate suspension of repayment of external debt.

• Countries and donor institutions wishing to help Pakistan may do so in the form of grants, not loans. No more new loans.

• Pakistan's military budget needs to be reviewed.

• Setting up of an audit commission to conduct a public inquiry into Pakistan’s external debt. The commission should have constitutional cover.

• Climate change reparations to be paid to Pakistan by industrialised countries.

• A federal flood relief commission to be set up to oversee all relief, rehabilitation and reconstruction work in the wake of the floods.

• The South Asian Association for Regional Cooperation secretariat should be contacted for assistance and the acceptance of Indian support without any conditions.

[Farooq Tariq is a spokesperson for the Labour Party Pakistan (LPP). Readers can donate to help flood victims through the Labour Relief Campaign via the Australian trade unions' aid agency APHEDA.]

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