United Nations (TDI): In the face of a deepening global development crisis marked by widespread famine, poverty, and inequality, Pakistan has called for a significant expansion in the lending capacity of Multilateral Development Banks (MDBs) as part of a broader strategy to tackle the situation.
Addressing the UN General Assembly’s Second Committee on Economic and Financial Affairs, Pakistan’s Permanent Representative to the UN, Ambassador Munir Akram, emphasized that geopolitical tensions and rising protectionism were fragmenting trade networks and destabilizing the global economy.
“Sixty countries are currently in debt distress, climate change impacts are escalating, and the digital divide threatens to become a new form of development divide,” Ambassador Akram said during the general debate session that commenced on Monday.
In light of these challenges, he urged the international community to build the political will necessary to achieve consensus on a comprehensive plan of action to be adopted at the upcoming Fourth International Conference on Financing for Development (FfD-IV), scheduled to take place in Spain next July.
The ambassador stressed that the plan must be implemented in “good faith.”
Ambassador Akram also highlighted the need to revive foreign direct investment (FDI), which saw a sharp decline of 26% in 2023, to support developing nations in creating viable and bankable projects.
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Pakistan, he said, would advocate for the establishment of a UN mechanism to facilitate public and private investment in sustainable infrastructure for developing countries.
Moreover, Akram urged FfD-IV participants to agree on a concrete, time-bound roadmap to fulfill the developed countries’ commitment of allocating 0.7% of their Gross National Income (GNI) as Official Development Assistance (ODA).
He further stressed the importance of clearly defining ODA, ensuring that climate finance, humanitarian aid, refugee costs, student expenses, and COVID-19 vaccines are not categorized as ODA.
New Sovereign Debt Architecture
The Pakistani envoy also pressed for the creation of a new sovereign debt architecture, noting that 58 nations were caught in what Prime Minister Shehbaz Sharif described as a “debt trap.”
He underscored that debt relief and restructuring efforts must be “fair, fast, and comprehensive.”
Developing countries, he lamented, face disproportionately high borrowing costs—between six to 12 times higher than those of European nations—largely due to unfavorable credit ratings.
“We must fix this unequal system through dialogue with credit rating agencies or by establishing a public credit rating agency,” he suggested.
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Touching on climate justice, Ambassador Akram called for an increase in adaptation finance and urged the swift capitalization and operationalization of the Loss and Damage Fund.
He also opposed emerging ‘environmental’ protectionist measures, such as border carbon taxes, while advocating for expanded preferential treatment for developing countries.
Regarding technology, the ambassador argued that it should be regarded as a “global public good” and pushed for the adoption of new intellectual property flexibilities, as well as the implementation of the Global Digital Compact agreements on artificial intelligence (AI).
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He also floated the idea of establishing an AI capacity-building fund.
The Pakistani envoy reaffirmed the country’s commitment to working with the African Group on securing an international tax treaty under UN auspices.
In closing, Akram urged the re-channeling of 50% of the 2021 Special Drawing Rights (SDR) allocation to development before FfD-IV, particularly through MDBs, and called for a unified effort to overcome opposition from key central banks that continue to block this essential avenue for development finance.
