Chairman Senate Standing Committee on Interior Senator A. Rehman Malik on Thursday submitted a resolution in the Senate Secretariat to debate in the House that the Government should utilize the Force-Majeure law to write-off our foreign debts.
The resolution submitted by Senator A. Rehman Malik in the Senate of Pakistan states “This House may discuss that the Government to invoke the Force-Majeure law for write-off the foreign debts of Pakistan from IMF, World Bank and USAID and other International financial institutions due to coronavirus outbreak. It adds “Pandemic COVID19 is adversely affecting our economy by drying out our local revenue generation, almost stopped remittances and hence Pakistan will be unable to make the repayments and retire heavy foreign loans. “Force Majeure Law” is the only option to be invoked in the given situation to sustain our economy, reads the resolution.
Senator A. Rehman Malik with his Resolution has also attached the letter he has written to Prime Minister Imran Khan in which he has proposed him to invoke the Force-Majeure Law for the write-off of debts of IMF, World Bank, USAID and other international financial institutions. He says that in his view, by establishing Force-Majeure, IMF, World Bank, USAID etc. would be lawfully obliged to grant deferment for these repayments and possibly written off our loans.
Senator Rehman Malik stated that it is essential that such a claim under Force Majeure should be framed after thorough pre-vetting and evaluating our case and we need to draft well-prepared estimates that if the pandemic continues for a longer period, economic recovery would take much longer, hence we should seek a relief of making repayments after 10 years with the request to condone the interest rate or asking for the entire loan to be written off. He further suggests that in support of our arguments, we will need immaculate, verifiable record of the measures we have taken to mitigate the COVID-19 pandemic, and the financial burdens that have been piled up due this pandemic. He explains that our sincere effort to fulfil the commitments made in the past to IMF despite increasingly adverse economic circumstances, State Bank of Pakistan’s policy decisions reflect our good intentions by not defaulting at the cost of suffering of our common man by forcing the suggested reforms of IMF and others. He adds that the balance of loan statement should be prepared and duly certified by the state bank be enclosed with the letter and we must first try to mutually agree on the Force-Majeure situation with our creditors before opting for legal battle.