Pakistan’s Finance Minister, Muhammad Aurangzeb, has called for urgent reforms in international financial institutions to tackle the ongoing debt crisis faced by emerging economies, including Pakistan. Speaking at the prestigious Boao Forum for Asia Annual Conference 2025 in Hainan, China, Aurangzeb emphasized the need for debt relief and financial justice to address the mounting debt burdens that are hampering the economic growth of many developing countries.
During his address at the high-level session titled “Inclusive Globalization That Benefits All – Pathways and Actions”, Aurangzeb pointed out that global debt has surged past $100 trillion, with more than 60% of low-income countries now at risk of experiencing debt distress. He stressed that sovereign debt restructuring mechanisms need to be overhauled to prevent recurring debt crises that stifle economic progress in emerging markets.
“A robust and comprehensive restructuring of sovereign debt systems is necessary to ensure that emerging economies like Pakistan can avoid the cyclical debt traps that have long hindered their growth,” stated the finance minister. He called on international financial institutions to grant developing nations greater financial flexibility and sustainable debt relief mechanisms that would allow them to invest in long-term development without the looming threat of default.
In addition to addressing the debt crisis, Aurangzeb also underscored the urgent need for reforms in the global financial architecture. This includes enhancing the Special Drawing Rights (SDRs) allocations, which would allow developing economies more access to financial resources. He also advocated for the promotion of green bonds and blended finance models, which could attract much-needed private sector investment into emerging markets, particularly in sectors that promote sustainable development.
Aurangzeb’s remarks were not limited to financial issues alone; he also highlighted the growing economic inequalities within the global system. He pointed out that while globalization has lifted millions out of poverty, it has also disproportionately benefited developed nations while leaving the Global South marginalized. As a result, countries like Pakistan continue to face barriers in accessing global markets, especially in sectors such as agriculture and textiles, where protectionist policies in developed countries impose significant challenges.
“Developing nations, including Pakistan, advocate for a more equitable model of globalization—one that promotes fair trade, sustainable growth, and inclusive financial systems,” said Aurangzeb. He emphasized that the model of globalization must be multilateral, innovation-driven, and inclusive to enable shared prosperity across all regions.
The minister also drew attention to the growing wealth and opportunity gap that has hindered the development of emerging economies. Developed countries continue to benefit from high-tech industries, digital trade, and widespread financial access, while developing nations face hurdles such as high tariffs, restrictive investment policies, and limited infrastructure.
In response to these challenges, Aurangzeb reiterated Pakistan’s efforts to foster greater regional connectivity, fairer market access, and stronger multilateral cooperation. He specifically highlighted initiatives like the China-Pakistan Economic Corridor (CPEC) and the Special Investment Facilitation Council (SIFC) as examples of Pakistan’s ongoing efforts to boost its economic engagement and regional cooperation.
Turning to the issue of climate change, Aurangzeb stressed the disproportionate impact that developing nations face despite contributing less than 10% of global carbon emissions. Pakistan, which accounts for less than 1% of global emissions, remains one of the most climate-vulnerable countries in the world. “Pakistan continues to advocate for urgent climate financing, green technology transfers, and fair global climate policies to support climate resilience in developing economies,” he stated.
The finance minister called on developed nations to fulfill their longstanding commitment to provide $100 billion annually in climate finance and to prioritize renewable energy cooperation with developing economies. He stressed that such support is critical for enabling emerging markets to transition to low-carbon economies and mitigate the risks posed by climate disasters.
In conclusion, Finance Minister Aurangzeb’s speech at the Boao Forum highlighted the pressing issues of debt relief, fair trade, and climate justice, all of which are critical to the sustainable development of emerging economies like Pakistan. His call for international reforms and greater cooperation among developing nations underscores the need for a more balanced and inclusive global economic system that can support the long-term growth and stability of all countries.