The United Nations Development Program (UNDP) warns in a new report released on Tuesday, echoed by the UN news site in a statement, that debt restructuring cannot wait for interest rates fall or a global recession sets in.
According to the UN body, dozens of developing countries need urgent debt relief. A total of 54 developing economies representing more than half of the world’s poorest populations need this relief due to the cascading global crises. These economies “represent little more than 3% of the world economy”, he specifies.
“Debt relief would be a small pill for rich countries to swallow, and the cost of inaction is terrible for the world’s poorest people. We cannot afford to repeat the mistake of providing too little relief, too late, in managing the debt burden of developing economies,” said UNDP Administrator Achim Steiner.
The UN body insists that rich countries have the resources to end the debt crisis, which has rapidly deteriorated in part because of their own domestic policies. These policies have sent interest rates skyrocketing in developing economies and scared away investors.
For UNDP, remaining inactive carries considerable risks, especially since the countries affected are among the most vulnerable to climate change in the world. The UN program states that if these countries do not have access to effective debt restructuring, poverty will increase and the investments desperately needed for climate adaptation and mitigation will not occur.
As the World Bank and International Monetary Fund (IMF) Annual Meetings take place this week (October 10-16) in Washington, UNDP believes that with the presence of G20 finance ministers who met just before the Meetings, the conditions are in place for creditors and debtors to kick-start debt restructuring talks under the G20 Common Framework, and avert a developing country debt crisis that could otherwise lead to a long-term development crisis.
By OMA Newsletter N° 893 of 12/10/2022
Article published under the direction of Dr. Najib Kettani
The OMA, NGO with an Intercontinental vocation
For the development of cultural exchanges
Valuing human potential
The promotion and consolidation of Africa’s development, and
Inter-African integration
