ISLAMABAD: To revamp the social protection and healthcare infrastructure to fight Covid-19 in a struggling economy where debt and liabilities are 106pc of the dwindling GDP, civil society organisations on Monday demanded that lender agencies cancel debt repayment due in the 2020-21 financial year.

The demand `Drop Debt, Not Health` was made by The Network for Consumer Protection, which said that according to last year`s calculations, the annual debt repayment sum is Rs1.8 trillion ($10.7 billion). If cancelled, it would give the Pakistani economy a muchneeded cushion to mitigate the lingering effects of Covid-19 on thelives ofthe poor,itsaid.

The Network is part of the Oxfam supported Tax Justice Coalition comprising more than 50 rights based organisations all over the country.Monday`s seminar was organised at the Riphah Institute of Public Policy at Riphah International University.

Pakistan`s economy has been hit badly due to the lockdown and global economic slowdown.

Economic growth in Pakistan is projected to be -2.2 to -1.2 in 2020, 0.3 to 0.9 in 2021 and 3.2 to 3.3 in 2022. This will affect the government`s overall performance and poverty alleviation.

The government`s reports show that at the close of the 201920 fiscal year, Pakistan`s total debt and liabilities stood at Rs44.6tr ($265bn). While the GDP was Rs41.7tr ($248.1bn), which means that debt and liabilities were 106.8pc of GDP.

The Network CEO Nadeem Iqbal said: `When the COVID crisis hit in early March, it was obvious that given its fiscal constraints Pakistan will not be able to protect the health of its citizens as well as livelihoods. Many million people were unemployed due tothe lockdown and the health system faced a chronic financing gap.

He added that all these macroeconomic challenges have consumed political energies to pointscoring and wrangling rather than providing a progressive vision with better future opportunities for its majority youth population.

`Gender-based violence, disparities and discrimination are another development challenge.

This fundamental social challenge has not gained due attention except for smokescreen.

Lower education among women, leading them to end up on low paidjobs orjustengageinhousehold chores,` he said.

Given the inadequate data and measurement issues, inequality measured through Gini coefficient remained stable, however, if measured through the share of national income among different income quintiles, the top 20pc take five times more of national incomethan the bottom quintile.

Riphah Institute of Public Policy faculty member Kashif Zaheer said Pakistan`s economy faced multiple macroeconomic and structural challenges in the last decade, including low economic growth affecting job creation, high inflation causing food price increases, the serious balance of payment problems due to rising imports and stagnant exports, weak rupee rising debt liabilities, mounting external debt, and repayment.

The Tax Justice Coalition Pakistan warned that the country cannot meet all its challenges of strengthening the health system and protecting vulnerable people and small businesses with limited fiscal space.

Due to the economic slowdown, revenue mobilisation will be reduced while spending needs have already increased. With lower revenue mobilisation, the only other option is to borrow more which will have long-term consequences on the debt profile.