Pakistan will not default on international loans

KARACHI: The Pakistan Institute of International Affairs (PIIA) organized a seminar on Saturday on “The Crisis in Sri Lanka: Lessons for Pakistan”.

Introducing the subject, PIIA Chairman Dr. Masuma Hasan explained that Sri Lanka was going through an economic crisis, which would be the worst crisis in the country’s history.

“There are food shortages, people are protesting. So there is both a humanitarian and a political crisis. A few days ago, the Prime Minister of Sri Lanka said that his economy had completely collapsed. They defaulted on their international loans,” she said, and added, “We decided to convene this seminar because many here in Pakistan believe that this country will follow the same pattern as Sri Lanka.

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

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

“It is highly unlikely that we will,” he said, and explained, “At present, the countries that have defaulted after the pandemic are Lebanon, Zambia and Sri Lanka. But here Pakistan is in an International Monetary Fund [IMF] program, which Sri Lanka was not.

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

“Poorer countries receive loans at a lower rate, but Sri Lanka received loans at a higher rate,” he said, and underlined: “Yet default is not 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 circle.

He also said that the political elite in Sri Lanka had not reached a consensus on how to do politics or how to run the country, which is also a big factor in what is happening in Sri Lanka today. today.

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

“Even though the Tamil Tigers have been defeated, the Tamil minority in Sri Lanka is an underlying problem. A younger generation may even mobilize in the future. And when politics doesn’t address the underlying conflicts, they thrive. We are facing a similar problem in our Balochistan,” he said.

Dr. Jehan Perera, Executive Director of the National Peace Council of Sri Lanka, joined us via video link to give a better picture of what is happening in his country right now.

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

“In Colombo, we see huge 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 will be no refueling. There is no gas to cook food. We do it on electric hotplates. Universities have been closed. Education has been moved online. There are even a shortage of medicine and we are grateful to Pakistan for sending us medicine. And the immediate blame for everything that is happening in Sri Lanka has fallen on the current government. People are angry. They feel terribly betrayed. They think the country cannot import petrol, diesel, gas and medicine because it has run out of dollars.On May 9, there were riots where people attacked ministers’ houses. This led to the resignation of the president, who presented himself as the king,” he said.

“The main majority is well rooted in Sri Lanka, but we also have other groups like the Sri Lankan Tamils ​​and the Tamils ​​who came from India many years ago. They all speak Tamil, but the country’s language is Sinhalese. When decisions are made, the Sinhalese do not take minorities into account. The Tamil language is spoken by three of the four communities in Sri Lanka, but the parliament has made Sinhalese our national language, which has also created a feeling of insecurity among the minorities. So many minorities in Sri Lanka also feel helpless because our army is also 95% Sinhalese,” he explained.

Posted in Dawn, June 26, 2022

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