Daily Times

ISLAMABAD: Argentinean Ambassador to Pakistan Ivan Ivanissevich has said that the people of Argentina had suffered a lot during the debt crisis.

He expressed these views in a public lecture organised by the Institute of Strategic Studies Islamabad (ISSI) titled ‘Debt restructuring in developing countries: the case of Argentina 2001-16’ on Wednesday.

Ambassador Ivanissevich stated that a debt crisis affects everyone within a state’s domain. Whenever a country suffers from such a crisis, he added, it faces sharp decline in investment and standards of living.

The envoy said during the peak of the crisis, Argentina’s poverty increased to 56 percent of the population with more than 50,000 creditors facing approximately 1,000 legal cases.

“Argentina still faces 38 percent poverty according to private survey,” he said. Responding to a question, the envoy stressed that the loans received by developing countries should be utilisied for the benefit of the public rather than obliging the privileged class.

“Any debt crisis is quite a harrowing experience. Although Argentina has faced a number of debt crises in the past, the crisis of 2001 took 15 years to wind up after lengthy negotiations that concluded in March 2016,” he added.

He stated that the primary lesson to be learnt from Argentina’s case is that no country should put itself in a position where it has to economically restructure itself. He also forewarned that any debt crisis coupled with long and protracted negotiations have a negative impact on the economy.

He said that currently, Pakistan has managed to avoid a similar situation and should continue to do so. Moreover, he mentioned that had it not been for China and some emerging economies, the world would have already witnessed a major financial crisis during 2011. He emphasised on the fact that if additional developing countries focus on becoming emerging economies, they could reduce the need to get entangled in soaring debts.

ISSI board of directors (BoD) Chairman and former ambassador Khalid Mahmood said that rising debt causes serious threats to an economy’s growth by creating uncertainty. He reiterated that debt default should be avoided, as it puts a country’s security at risk. He further pointed out that Argentina’s experience is a remarkable case study, and that the international community should use it to set up proper guidelines for coping with the debt process.

“Debt repayment is become very important. In fact, it is part of the Sustainable Development Goals (SDGs) 2030,” he stressed, lauding the Argentinean authorities for successfully dealing with the debt crisis spanning some 15 years.

Speaking on Pakistan-Argentina relations, Mahmood said that both countries have maintained long historical ties and both of them are cooperating with each other in the United Nations (UN) and other international forums.