Cancel Pakistan’s Debt

1 June 2013 by Jubilee Debt Campaign


Why this is important

The people of Pakistan have suffered from a crippling debt for 40 years. This debt has done little for the majority of Pakistan’s people – instead it has increased inequality and deepened impoverishment. Today, 50 million people in Pakistan live below the poverty line- BUT if we get behind them now — following the recent change of government, we can start to change this

The global financial crisis, the horrific floods of 2010 and the so-called ‘war on terror’ have all made Pakistan’s debt spiral out of control, precipitating an economic crisis within Pakistan, and furthering inequality, injustice and instability in the region. Debt payments are increasing rapidly this year as these loans come to be repaid.

In response to repeated debt crises, the International Monetary Fund IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org
(IMF) provided ‘bailout’ loans to ensure Pakistan’s creditors keep getting paid. For 29 of the past 40 years Pakistan has received loans from the IMF, which amounts to one of the most sustained periods of international lending to any country. The people of Pakistan need immediate relief from these crippling debts.

This can only be achieved through a debt audit to ascertain which debts should be cancelled, progressive taxation to create a more equal and productive economy and alternative solutions to the IMF’s structural adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

IMF : http://www.worldbank.org/
policies
. Following this year’s election, crucial decisions are being made on how to deal with Pakistan’s debt. The people of Pakistan must be free to decide upon their own economic future – a future without the crippling burden of inherited debts.

PLEASE SIGN THIS URGENT PETITION TO THE IMF TO CANCEL PAKISTAN’S DEBT!

Read our ground-breaking report which started this all!

http://www.islamic-relief.com/Indepth/downloads/Unlocking%20the%20chains%20of%20debt%20FINAL_one%20page.pdf

For more information regarding this campaign or Islamic Relief’s or Jubilee Debt Campaign’s work, please contact IRCampaigns at irworldwide.org

Thank you for helping the people of Pakistan



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