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Pakistan Spends Double Paying Off Debt Than It Gets in Flood Aid

Oxfam calls on Friends of Democratic Pakistan to drop the debt

WASHINGTON - The international aid agency Oxfam today called for
Pakistan’s $55bn debt to be dropped. Oxfam said that the debt must be
cancelled because of the level of destruction caused by the recent
unprecedented flooding and the massive costs of immediate relief and
longer term reconstruction. The call comes in advance of the
Friends of Democratic Pakistan meeting today (Friday 15 October) in
Brussels, when Foreign Ministers will address the country’s short and
long term needs.

Pakistan will pay $2.9bn this year on servicing foreign debts.
So far, governments have committed $1.5bn to the relief effort.
Rebuilding is way behind schedule and millions are homeless. Some two
and a half months since the floods struck the UN Appeal is only
one-third funded. Rebuilding the country will require a huge injection
of funds. The Pakistan government has estimated that reconstruction may
cost as much as $45bn.

Some countries, including France, Japan, South Korea and
China – all members of the Friends of Democratic Pakistan – have
received more money from Pakistan than they have given in response to
the flooding. France received $62m in debt payments in the
first nine months of the last financial year, more than 15 times its
direct contribution to the flood response.  Japan received $111m, more
than five times its contribution to the response. South Korea received
four times as much, and China three times as much.

Consuelo Lopez-Zuriaga, Oxfam Head of Humanitarian Campaigns, said,

“Any rational person will see this as madness and maddening. It is a
moral and economic absurdity that while poverty-struck people in
Pakistan are struggling to put their lives back together much richer
countries like France and Japan are receiving vast sums of money in debt

“The debt burden cannot be allowed to impede the
relief and reconstruction efforts. Pakistan needs aid and its debts
dropped so that families can get back to their land and rebuild their
homes and their lives.

“Pakistan’s debt has doubled in the past
four years alone and the government is currently spending more than four
times as much per person on servicing external debt as it is on

“Even before the floods, poverty in parts of Pakistan
was dire. Almost one in ten children die before their fifth birthday.
Teenage girls in the Federally Administered Tribal Provinces are more
likely to die in childbirth than learn to read. And now more than 10,000
schools and 500 hospitals need to be rebuilt.

“If funds that are
desperately needed for emergency aid and reconstruction are swallowed
up in debt repayments, then Pakistan could face a poverty boom. The
choice is clear – either we roll back debt or development suffers.”


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Oxfam International is a confederation of 13 like-minded organizations working together and with partners and allies around the world to bring about lasting change. Oxfam works directly with communities and that seeks to influence the powerful to ensure that poor people can improve their lives and livelihoods and have a say in decisions that affect them.

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