Finance & economics | No relief in sight

China is paralysing global debt-forgiveness efforts

Restructurings have all but disappeared

Beijing, CHINA: People pass under Pakistani and Chinese flags at Tiananmen Gate on view for Pakistan President Pervez Musharraf's visit to the Chinese capital Beijing, 20 February 2006. Musharraf arrived in China late 19 February on a five-day visit that analysts said would focus on anti-terrorism cooperation, trade and technological assistance. AFP PHOTO/Peter PARKS (Photo credit should read PETER PARKS/AFP via Getty Images) — Image: Getty Images

Feb 2nd 2023

Given that his country is on the brink, Mohammad Ishaq Dar, Pakistan’s economy minister, is strangely serene. In the week to January 20th, his government burned through a quarter of its dollar reserves, leaving $3.5bn to cover loan repayments and imports that will probably come to more than twice that in the first quarter of the year. Two days later ministers turned off the electricity grid to preserve fuel. Policymakers then abandoned a currency peg. The rupee plummeted, but Mr Ishaq Dar remained cool. Pakistan’s prosperity, he said, is in God’s hands.

This article appeared in the Finance & economics section of the print edition under the headline “No relief in sight”