Developing economies could save hundreds of billions of dollars if the world commits to restructuring their existing debt and expanding access to future affordable finance, according to a new guidance note released Wednesday by the Program of the United Nations for Development (UNDP) and which the press service of the United Nations echoed.
The note, titled “Building Blocks Out of The Crisis,” was released the day before the G20 Finance Ministers and Central Bank Governors meeting being held in Bangalore, India, February 23-25, 2023.
“The building blocks of the transformation of the global financial system are already being discussed within the G20 (reform of multilateral development banks, debt restructuring and liquidity injection), but the divide between developed and developing countries rapidly worsening, we need to walk the talk,” said UNDP Administrator Achim Steiner.
The UN body’s document identifies 52 low- and middle-income developing economies in debt distress or at high risk of debt distress, representing more than 40% of the world’s poorest people.
He explains that a 30% reduction in their stock of external public debt in 2021 could save up to $148 billion in debt service payments over eight years.
Also according to the UNDP, 25 governments in developing economies now have external debt service payments above 20% of their total revenues, the highest number of countries in more than 20 years.
Steiner points out that “the countries most burdened by debt and lack of access to finance are also battered by multiple other crises – they are among the most affected by the economic impact of Covid-19, poverty and l accelerating climate emergency.
For him, “the time has come to tackle the widening chasm between rich and poor countries, to change the multilateral landscape and to create a debt architecture adapted to our complex, interconnected and post-Covid world. “.
The policy brief highlights the urgent policy measures needed to reverse the current debt crisis and shows the potentially transformative impact of addressing debt and expanding access to lower-cost, long-term finance .
By OMA Newsletter N° 1061 of 23/02/2023
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
