UN Policy Memorandum: Flood-Hit Pakistan Should Suspend Debt Repayments

A UN Policy Memorandum says Pakistan should suspend international debt repayments and restructure loans with creditors after recent floods added to the country’s financial crisis.

The Financial Times in its report has citing the memo, which the UN development programme will share with the government this week.

According to the times, the Memo states that the country’s creditors should consider debt relief so that policymakers can prioritise financing its disaster response over loan repayment.

Pakistan has earlier estimated the damage at 30 billion U.S. dollars, and both the government and UN Secretary General Antonio Guterres have blamed the flooding on climate change.

The newspaper said the memo further proposed debt restructuring or swaps, where creditors would let go of repayments in exchange for Pakistan agreeing to invest in climate change-resilient infrastructure.