‘Cancel my debt, I’m flooded’

“THERE is a tide in the affairs of men/ Which, taken at the flood, leads on to fortune.” So said Shakespeare, little knowing that in Pakistani English his words might be twisted to squeeze a fortune out of a flood.
How else to explain the rising tide of calls by our leaders to have debts incurred by them cancelled because of the deluge. Their ingenuity is to be expected but what should one make of the response of many in whose names the debts have been incurred? They too have occupied the moral high ground in lending vociferous support for reparations and debt cancellation.
Consider a hypothetical scenario for perspective. Imagine a territory ruled by a murderous mafia that extorts protection money and stuffs all resisters in sacks. It borrows from abroad to control the territory and is obliged by a lender fully aware of the reality but keen to promote its own interests. The lender also guarantees asylum to the mafiosi if they ever get into trouble.
Read: Flood-hit Pakistan should suspend debt repayments, says UN paper
Imagine these good times interrupted by a great flood that buries the territory. The mafiosi blame the lender’s country for the disaster and clamour for reparations in the form of debt cancellation. Could such a stance be taken at face value?
This is a hypothetical scenario but how far-fetched is it? Hasn’t it been asserted that Karachi was once ruled by a mafia? Has the Supreme Court not described the country’s government as one? Do political leaders not call each other thieves and robbers propped up by foreign powers?
Even if conceded, why should reparations take the form of debt cancellation?
In the fourth century, St Augustine asked: “What are robber gangs, except little kingdoms? If their wickedness prospers, so that they set up fixed abodes, occupy cities and subjugate whole populations, they then can take the name of kingdom with impunity.” This notion that “the state and the criminal gang are but larger and smaller versions of the same thing”, was a recurrent strand in mediaeval thinking. Is it possible that some parts of the world haven’t advanced much since then?
Once it is conceded that the bona fides of rulers clamouring for reparations as debt cancellation can be suspect, we can address issues of logic. Even if the case for reparations is conceded, why should they take the form of debt cancellation? Isn’t there a moral hazard in proceeding down that route? What does it do to the incentive for prudent behaviour if an agent is protected against the consequences of impropriety? How would an organisation declared ‘too-big-to-fail’ treat its fiduciary responsibilities? Who is to be held accountable for misuse of the debts incurred over the years in the name of those now suffering in the flood? Wouldn’t every disaster be turned into an occasion to celebrate if it wipes the slate clean and absolves past misgovernance?
Flip the scenario to consider victims of the flood blaming the state for not mitigating their exposure and vulnerability despite knowing the heightened possibility of disaster. Are they entitled to ask that their debts to banks and moneylenders be waived? How would the state react to such claims?
Having argued that debt cancellation is a hazardous vehicle for reparations, even if the latter are justified, we can consider the case for reparations in its own right. Reparations, broadly understood, are compensation for consciously inflicted abuse or injury; they apply in particular to severe violations of human rights. For example, a compelling case has been made for reparations to compensate for slavery in the US. A similar one can be made for the forcible dispossession of Native Americans.
But does climate change fall in this category? Climate change is indeed the outcome of consumption patterns in Western countries over two centuries. But the consequences of such practices were not known till very recently; nor were they adopted as a deliberate attempt to inflict damage on non-Western countries.
Read: World leaders join Pakistan for SOS on flood and debt
Even otherwise, if the issue of reparations is to be raised now, why should it be confined to climate change and only the Global South be entitled to them? What should be our stance on reparations for human rights violations within the Global South? Does Pakistan owe reparations to Bangladesh, India to Kashmir, Japan to China, China to Xinjiang? How credible are selective claims to reparations stressing just the ones where we are owed and slighting the ones we owe? Are we hoping they will escape scrutiny forever? It took over 100 years but Canada finally had to accede to reparations for separating indigenous children from their families and prohibiting the use of their native languages and cultural practices.
Closer to home, can victims of floods and earthquakes claim reparations from those who have left them living in fragile dwellings? Isn’t that a violation of their right to adequate housing? And what of reparations for the millions left illiterate despite a constitutional right to education or for those barred from learning in their own languages?
There is no moral case for cancellation of debts without accountability nor justification for reparations that are one-sided. There is, however, an urgent need to address climate change. In the absence of a sustainable and fair solution, it will trigger huge human migrations — from rural to urban areas in peripheral countries and across international borders from peripheral to core countries. This will lead to stresses that political systems would find difficult to handle without social conflict. For that reason alone, the case for earmarked assistance is strong and in the interest of all countries. A loss-and-damage assessment, with incentives to ensure adequate mitigation, should form the basis for support from rich countries to those suffering most from the impacts of climate change.
Having started with Shakespeare, it is fitting to conclude with Ghalib, another literary giant. In very few words he illustrates the problem with our leaders’ plea for cancelling their debts:

Flood-hit Pakistan should suspend debt repayments

Pakistan should suspend international debt repayments and restructure loans with creditors after recent floods added to the country’s financial crisis, the Financial Times reported on Friday, citing a UN policy memo.
The memorandum, which the UN Development Programme will share with the government this week, states that the country’s creditors should consider debt relief so that policymakers can prioritise financing its disaster response over loan repayment, the newspaper said.
Pakistan has earlier estimated the damage at $30 billion, and both the government and UN Secretary General Antonio Guterres have blamed the flooding on climate change.
The memo further proposed debt restructuring or swaps, where creditors would let go of repayments in exchange for Pakistan agreeing to invest in climate change-resilient infrastructure, FT said.
Floods have affected 33 million Pakistanis, inflicted billions of dollars in damage, and killed over 1,500 people — creating concern that Pakistan will not meet debts.
Earlier this week, the UN secretary general, who also visited Pakistan recently, made a forceful address to world leaders gathered for the opening day of the General Assembly’s high-level debate.
Guterres repeated the appeal he first made during his visit where he urged lenders to consider debt reduction to help those nations that were facing a possible economic collapse.
“Creditors should consider debt reduction mechanisms such as debt-climate adaptation swaps,” he said again at the UNGA. “These could have saved lives and livelihoods in Pakistan, which is drowning not only in floodwater, but in debt.”

World leaders join Pakistan for SOS on flood and debt

• Paris offers to host rehabilitation conference
• Shehbaz to present Pakistan’s case on Friday
• UN chief opens UNGA with ‘debt-climate adaptation swaps’ suggestion
UNITED NATIONS: “Pakistan is drowning, not only in floodwater but in debt” too, said UN Secretary General Antonio Guterres as Prime Minister Shahbaz Sharif urged the international community on Tuesday to stay engaged with the country as it deals with this huge humanitarian crisis.
Pakistan and France, meanwhile, agreed to identify ways and means to support efforts to tackle the challenge caused by the floods and Paris offered to host an international conference before the end of the year to help Islamabad rebuild in a climate-resilient manner.
“I recently saw it with my own eyes in Pakistan — where one-third of the country is submerged by a ‘monsoon on steroids’,” said the UN chief during a forceful address to world leaders gathered for the opening day of the General Assembly’s high-level debate.
Mr Guterres repeated the appeal he first made during his recent visit to Pakistan where he urged lenders to consider debt reduction to help those nations that were facing a possible economic collapse. “Creditors should consider debt reduction mechanisms such as debt-climate adaptation swaps,” he said again at the UNGA. “These could have saved lives and livelihoods in Pakistan, which is drowning not only in floodwater, but in debt.”
The UN chief urged the lenders to set up “an effective mechanism of debt relief for developing countries, including middle-income countries, in debt distress”.
This is the first UNGA session attended physically by world leaders after the Covid-19 pandemic.
Also at the welcome reception hosted by Mr Guterres, Prime Minister Sharif interacted with New Zealand Prime Minister Jacinda Ardern, held bilateral meetings with French President Emmanuel Macron, President of Spain Pedro Sanchez Perez-Castejon, Chancellor of Austria Karl Nehammer and President of the Islamic Republic of Iran Sayyid Ebrahim Raisi.
Besides, Mr Sharif expressed gratitude to Palestine’s President Mahmoud Abbas for sending the response and rescue team for the flood-affected people of Pakistan.
He also highlighted the need for helping out developing economies in a series of tweets. He was scheduled to address the Global Food Security Summit, but could not due to other engagements. In his tweets, he said he had come to the UNGA to “tell Pakistan’s story to the world, a story of deep anguish and pain arising out of a massive human tragedy caused by floods”.
French help
According to a joint statement, issued after PM Sharif’s meeting with French President Emmanuel Macron on the sidelines of the UNGA, the premier apprised President Macron of the devastation caused by the climate-induced floods across Pakistan, expressed gratitude to France for sending timely assistance of tents, water pumps and a team of doctors and nurses, and hoped that the country would continue to contribute in the rehabilitation and reconstruction phase.
The premier also thanked France for its support for GSP+ scheme, noting that it served to enhance trade and economic ties with EU as well as France.

Published in apnimag, Octuber 13th, 2022

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