Monitoring Desk
PARIS: Two days before G20 finance ministers meet in India, The UN Development Programme proposed on Wednesday reducing the debt of 52 low and middle-income countries.
The countries either in debt distress or at high risk of debt distress account for over 40 percent of the world’s poorest people and are facing trouble in maintaining essential services in the face of debt servicing costs.
UNDP Administrator Achim Steiner said that multiple other crises are also battering the countries most burdened by debt and lack of access to financing – the nations are among the most affected by the economic consequences of the Covid-19 pandemic, poverty, and the accelerating climate emergency.
“The time has come to address the widening gap between rich and poor nations, to change the multilateral landscape, and to create a debt architecture that is best fit for purpose in our complex, interconnected, and the post-Covid pandemic world,” he added.
UN proposes 30% reduction in vulnerable nations’ external debt
The UNDP demanded a 30 percent reduction in the value of these nations’ public external debt stock in 2021, which it said could help save nearly $148 billion in debt service payments over eight years.
An additional amount of $120 billion in savings could also be generated by refinancing middle-income nations’ bond debt to official creditor rates.
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The call follows a plan presented by UN Secretary-General Antonio Guterres to increase spending by countries on sustainable development goals, with dealing with outstanding debt as one of the issues identified.
The 17 sustainable development goals (SDGs) include access to clean water, eliminating poverty and hunger, and action to mitigate climate change.
