It’s for a reason that the prime minister has been calling for poor country debt write off ever since the coronavirus pandemic changed everything. Pakistan has to pay back approximately $28 billion dollars in public debt by mid-2023. There is clearly no way to make such payments in the present circumstances. The lockdown has brought the economy to the halt with predictions of a sharp jump in the fiscal deficit, doubling of poverty, contraction of growth and a sharp recession by the next fiscal. What, then, to do about all the debt which stands at more than 90 per cent of GDP and must be paid back in bigger bulks with time? According to news reports, Pakistan plans to seek rollover of half the amount due, to the tune of $14 billion; although it would be lucky to get even half of that. That much is not a surprise, mostly because this is just about the only option Pakistan really has. Whatever good was coming from the IMF program is now lost to the coronavirus response. And not only will countries like Pakistan not be able to make debt payments for quite a while, they will also need increasing amounts of foreign loans to avoid large scale social unrest as well as hunger and starvation. Of the amount due, $19 billion has to be paid to only four major creditors – International Monetary Fund (IMF), World Bank, Asian Development Bank (ADB) and China. So the straight forward next step is to hold necessary discussions with them. It’s not like they don’t understand the situation so an answer, either way, should come quickly. It would be wrong to expect a simple yes. Pakistan is not the only country fighting with the very real prospect of outright economic collapse. And international financial institutions (IFIs) that always come to our rescue are already stretched because practically every country, rich and poor alike, is in desperate need for any money that can be found. Also, it’s not just the immediate term that needs some thought. Pakistan’s debt will grow manifold as it fights off the coronavirus pandemic. And it will get more and more difficult to meet repayment deadlines. Unless our friend agree to roll over some of our debt, if not write some off altogether, a recession might just be the beginning of far deeper problems. *