54 poor countries in dire need of debt relief: UN
According to the United Nations, 54 poor countries, which are home to more than half of the world’s poorest population, are in urgent need of debt relief as a result of cascading global crises.
The United Nations Development Programme issued a new study on Tuesday warning that “the implications of inaction are catastrophic” as dozens of developing countries face a debt crisis that is only getting worse.
Without prompt assistance, the poverty rate in at least 54 countries would increase, according to UNDP, and “desperately needed investments in climate adaptation and mitigation will not happen.”
Given that the impacted countries were “among the most climate-vulnerable in the world,” this was concerning.
The agency’s assessment, which was released ahead of meetings of the World Bank, the International Monetary Fund, and the G20 finance ministers in Washington, emphasized the need for immediate action.
But UNDP chief Achim Steiner told reporters in Geneva that despite repeated warnings, “nothing has happened so far, and the risks have been mounting That problem is worsening and posing a risk of escalating into a global development disaster affecting dozens of nations.”
Converging economic strains are being felt by the impoverished, debt-ridden nations, and many of them are unable to repay their debts or obtain new financing.
“Market conditions are shifting rapidly as a synchronized fiscal and monetary contraction and low growth are fueling volatility around the globe,” UNDP said.
According to the UN organisation, many of the impacted countries had debt problems brewing even before the Covid-19 outbreak struck.
“The rapid build-up in debt over the past decade has been consistently underestimated,” it said.
According to UNDP, “market circumstances are fast changing as synchronised fiscal and monetary contraction and low growth are fostering volatility around the world.”
It stated that “the rapid growth in debt over the previous decade has constantly been underestimated.”
Negotiations under the G20 Common Framework, which was established during the pandemic to aid heavily indebted countries find a way to restructure their commitments, have been proceeding slowly. The freeze on debt repayment during the Covid crisis to lessen their load has expired.
The research stated that 46 of the 54 countries have accumulated public debt of $782 billion in 2020. More than a third of the sum is made up only of loans from Argentina, Ukraine, and Venezuela.
54 poor countries in dire need of debt relief: UN
The situation is gradually becoming worse; currently, 19 developing countries —10 more than at the beginning of the year—are effectively shut out of the credit market.
According to UNDP’s senior economist George Gray Molina, a third of all emerging economies have debt that has been classified as having “high risk, severely speculative, or default.”
According to him, Sri Lanka, Pakistan, Tunisia, Chad, and Zambia are the countries most immediately at danger.
