CADTM-Pakistan calls for Debt Audit Commission to dig out illegitimate loans http://www.cadtm.org/CADTM-Pakistan-calls-for-Debt

Speaking on the occasion, Focal person of CADTM-Pakistan, Syed Abdul Khaliq said most of the foreign loans were contracted by corrupt leadership of dictatorial regimes of Gen Ayub, Gen Yehya, Gen Zia and Gen Musharraf, who used those loans for projects which are of little benefit to ordinary people and which, in fact, served to increase corruption and improper patronage. As a result of its inability to repay the original debt, Pakistan was forced to obtain more loans and/or restructure its economy often at the expense of its own development. He demanded of the government to freeze debt servicing and divert the amount for the treatment of Dengue patients and restoration of flood affectees.

Sara Sohail, a leader of World March of Women (WMW) Pakistan said State of Necessity which is a principle enunciated by the International Human Rights Commission, suggests that indebted countries placed in a situation that makes it impossible for them to fulfil the very basic needs of their populations (health, education, food, water, housing, etc) have a right to repudiate debts and structural adjustment programmes. A similar position has also been taken by the UN Commission on International Law.

Pakistan’s 2011 austerity budget combines drastic cuts to power and food subsidies with a massive increase in military spending and the so-called “reforms” demanded by the International Monetary Fund. The amount used to service foreign debt annually is estimated at three times the amount the government spends annually on healthcare. This in a country in which 38% of children under five are underweight, child mortality rates are among the highest in South Asia and only 54% of the population is literate.

CADTM-Pakistan member Rabbiya Bajwa said, Illegitimate Debts exist where loans have been granted to repressive regimes and/or where the money was used to fund projects which did nothing to benefit ordinary people but rather served to increase corruption and improper patronage. Debt relief has always focused on the borrower; the concept of ‘moral hazard’ is used to argue that non-payment of illegitimate debt is necessary to discipline lenders and prevent future lending to oppressive dictators.

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