Debt-ridden Pakistan likened to ‘canary in a coal mine’

Pakistan is like a canary in the coal mine in a world where almost 60 countries are drowning in debt while facing significant development spending needs and monumental risks from climate change, writes Murtaza Syed, a former acting governor of the State Bank of Pakistan, in The Financial Times. It is precisely in cases like this that debt relief — and truth-telling — are needed the most, he wrote. “Risks to debt sustainability remain acute given very large gross financing needs and the persistent challenges in obtaining external financing, and that real interest rates are projected to become an adverse driver of debt dynamics in the coming years,” said Syed, a former IMF official. “In Fundspeak, this was an SOS call,” he wrote. adding that yet barely a month and a half later, the Fund and the Pakistan government seem intent on walking back this candour and kicking the can down the road.