Politics

UN: Debt relief must be extended to all developing, mid-income countries

United Nations, May 28 (efe-epa).- The United Nations’ secretary-general on Thursday said debt relief must be extended to all developing or middle-income countries that require it as a result of the coronavirus crisis.

Antonio Guterres made his remarks at the outset of a virtual summit involving several dozen heads of state and government, an event in which the participants focused on the new development policy financing needs in light of the pandemic.

The UN said collective action is needed to urgently respond to the crisis in six areas, including addressing the problem of sovereign debt.

The Portuguese diplomat warned that the economic consequences of the Covid-19-triggered lockdowns threaten to trigger a wave of debt crises that could complicate the response to the pandemic and halt development progress for years.

Guterres said the G20’s decision to temporarily suspend debt service payments for the poorest countries that request forbearance is a “first step,” but that these types of measures must be extended to any developing or middle-income country that asks for this relief due to difficulty in accessing financial markets.

The UN also stressed the need to find creative ways to ensure that private-sector creditors – holders of much of the developing countries’ sovereign debt – also participate the financial relief programs.

Guterres furthermore called for measures to boost liquidity in emerging economies affected by pandemic-triggered capital flight and said a clear signal of confidence is needed to spur a rebound in sustainable development investment, which has plunged amid the crisis.

Combating illegal financial flows and tax evasion also should be a priority, said the UN secretary-general, who urged the international community to strive to ensure that the recovery effort serves in a broader sense to bring about a better world.

Covid-19 has exposed and is exacerbating profound inequalities and injustices that must be corrected, including gender inequality, Guterres said, adding that the effort to defeat Covid-19 must be accompanied by measures to combat climate change and eradicate poverty and hunger.

He stressed that an adequate recovery from the pandemic will cost money but that a failure to respond with “unity and solidarity” will be even more costly.

The prime minister of Canada, which organized the gathering along with Jamaica and the UN, echoed Guterres’ remarks.

“This is our chance to begin a conversation on how we can emerge from this truly global crisis as a stronger and more cohesive world – one that creates growth for everyone, addresses inequality and cares for the most vulnerable,” Justin Trudeau said.

The Canadian leader stressed the world’s interconnectedness and said wealthier countries like his must assume their responsibility and participate in a global and coordinated recovery plan. EFE-EPA

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