Home » Pakistan is not going to default on international loans, moot told – DAWN.com

Pakistan is not going to default on international loans, moot told – DAWN.com

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KARACHI: The Pakistan Institute of International Affairs (PIIA) organised a seminar on ‘Crisis in Sri Lanka: Lessons for Pakistan’ on Saturday.

Introducing the subject, PIIA chairperson Dr Masuma Hasan explained Sri Lanka is going through an economic crisis, which is said to be the worst crisis in the history of the country.

“There are food shortages, people are protesting. So there is both a humanitarian and political crisis. A couple of days ago, the Sri Lankan prime minister said that their economy has totally collapsed. They defaulted on their international loans,” she said, and added: “We decided to call this seminar because many here in Pakistan think that this country will follow the same pattern as Sri Lanka.”

Dr S. Akbar Zaidi, the executive director of the Institute of Business Administration (IBA), Karachi, said he does not think that Pakistan was going to default on its loans.

Expert says political elite of Sri Lanka failed to reach consensus on how to run their country

“It’s highly improbable that we will,” he said, and explained: “Right now the countries that have defaulted post-pandemic are Lebanon, Zambia and Sri Lanka. But here Pakistan is in an International Monetary Fund [IMF] programme, which Sri Lanka was not.”

He further elaborated that Sri Lanka was a richer country than Pakistan.

“Poorer countries are given loans at a lower rate, but Sri Lanka was given loans on a higher rate,” he said, and pointed out: “Still, default is not the end of the world, but it makes life very difficult as it gives way to unemployment and inflation and we are already there.”

Dr Farhan Hanif Siddiqi, director and associate professor at the School of Politics and International Relations, Quaid-i-Azam University, Islamabad, said that the political system in Sri Lanka combined with ethnic and cultural issues caused a vicious cycle there.

He also said that the political elite of Sri Lanka failed to reach consensus on how to do politics or how to run the country, which is also a big contributory factor in what is happening in Sri Lanka today.

“In 2015, their presidential system was changed into a parliamentary system. Then in 2020, they were back to the presidential system. Now, again they are calling for a parliamentary system. It does not go well with that nation,” he said.

“Even though the Tamil Tigers were defeated, the Tamil minority in Sri Lanka is an underlying problem. A younger generation might even mobilise themselves in the future. And when politics does not address the underlying conflicts, then they grow. We are facing a similar issue in our Balochistan,” he said.

Dr Jehan Perera, executive director of the National Peace Council of Sri Lanka, joined in through a video link to provide a better picture of what is going on in his country at the moment.

He said that just four years ago, Sri Lanka was called a middle-income country by the World Bank. Sri Lanka was also a great tourism destination. “But in the last three months, the value of Sri Lankan currency has fallen by 100 per cent. Now 70 per cent of our population eats less. Now, Sri Lanka is known as the seventh-most malnourished country in the world. It is being compared to Somalia.”

“In Colombo, we see enormous lines or queues for petrol and diesel at the pumps. People park their cars there for two days and more, and go home because there will be no fuel until there is supply. There is no gas to cook food. We do it on electric hot plates. The universities have been closed. Education has been shifted to online. There is a shortage of medicine even and we are thankful to Pakistan for sending us medicines. And the immediate blame for all that is happening in Sri Lanka has fallen on the current government. The people are angry. They feel terribly betrayed. They think that the country cannot import petrol, diesel, gas and medicine because it has run out of dollars. On May 9, there were riots where the people attacked the homes of ministers. It led to the resignation of the president, who was portraying himself as the king,” he said.

“The majority principal is entrenched in Sri Lanka, but we also have other groups such as the Sri Lankan Tamils and the Tamils who came here from India many years ago. They all speak Tamil, but the country’s language is Sinhala. When decisions are taken, the Sinhalese do not take the minorities into consideration. The Tamil language is spoken by three of the four communities in Sri Lanka, but the parliament made Sinhala our national language, which has also led to a sense of insecurity among the minorities. So many minorities in Sri Lanka also feel powerless as our army, too, is 95 per cent Sinhalese,” he explained.

Published in Dawn, June 26th, 2022

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