United Nations calls for debt reduction for poor countries

The United Nations Development Program (UNDP) has recommended mechanisms to reduce public debt for low and middle income countries.

In its report, “Public debt vulnerability in developing economies,” UNDP analyzes debt fragility in 120 low- and middle-income economies to determine which economies are most at risk.

By doing so, the UN agency has categorized 72 economies as “vulnerable” and forecasts debt in these countries will remain high for many years. This will prevent governments from making decisive investments to benefit people and combat climate change.

UNDP Director General Achim Steiner emphasized that service payments this year will be about $ 1,100 billion in debt and only 2.5% of that is enough to vaccinate 2 billion people under the COVAX initiative ( mechanism of global COVID-19 vaccine access).

Mr. Steiner also noted that the Debt Service Suspension Initiative (DSSI) of the World’s Leading Group of Emerging and Developed Economies (G20), which allows the most vulnerable countries to defer their debt. , is necessary but not enough.

The UNDP head also noted that the International Monetary Fund (IMF) is looking to increase its reserves and credit capacity to $ 650 billion with the new issuance of special drawing rights. Of that amount, $ 224 billion will go to low- and middle-income countries.