The United Nations Development Program (UNDP) warned Tuesday of a severe debt crisis that could have devastating effects on the world’s poorest people.
new report Under the title Avoiding ‘Too Little or Too Late’ on International Debt Relief, UNDP said that 50% of the world’s poorest need debt relief to avoid a major systemic development crisis. I assumed it was in urgent need.
“There is a severe debt crisis going on across the developing world, and the outlook is likely to deteriorate,” the UNDP said in its report. It is the result of a chain of global crises. ”
UNDP noted that the global COVID-19 pandemic has exacerbated economic conditions in many developing countries, and the situation is likely to worsen further.
“Despite the adoption of several debt relief initiatives since the start of the pandemic, the response so far has been inadequate. We must step up our efforts urgently,” he added.
The report set out a number of policy measures aimed at preventing a debt crisis. This includes shifting the focus from debt rescheduling to restructuring and debt write-offs to help countries return to growth more quickly.
Also, providing broader relief to more countries, adding special clauses to bond contracts to provide leeway in a time of unprecedented crisis, and increasing debt settlement capacity to cover all heavily indebted countries. He also proposed expanding the eligibility of the common framework for
The report said creditors should be legally obliged to cooperate “in good faith” in restructuring the Common Framework if their debts were found to be unsustainable, and that countries should encourage creditors to can offer to implement measures related to climate, nature and the environment. to write off their debts.
The international community must ‘act swiftly’
“The international community should not act until interest rates fall or a global recession sets in. The time to avoid a protracted development crisis is now,” UNDP said. “Creditors, debtors and guarantors must act quickly and decisively to avoid past mistakes of providing debt relief ‘too late’.”
“More than half of the world’s poorest live in the 54 countries with the most severe debt problems, yet they make up just over 3% of the global economy,” said the UNDP administrator. Achim Steiner said: statement I am attaching the report. “Debt relief is little medicine for rich countries, but the price of inaction is brutal for the world’s poorest countries. We can’t afford to repeat the mistake of being too late.”
The report comes after the United Nations warned last week that a global recession and prolonged stagnation awaited, and UN officials said some of the developed countries, including the U.S. Federal Reserve, said it was due to the monetary and fiscal policies of
On Monday, the International Monetary Fund (IMF) and the World Bank, along with G20 finance ministers, began meeting in Washington. At that meeting, World Bank President David Malpass and his IMF Managing Director Kristalina Georgieva said there was a risk of a global recession in what they described as “unsettling times.” I warned you.
They cite slowing economic growth in advanced economies, rising debt levels, and depreciating currencies in many developing countries, with Georgieva predicting that about a third of the global economy will be in recession for at least two consecutive quarters by the end of 2023. I pointed out that it will be negative growth in the future.
Reuters contributed to this report.