Developing countries are buckling under high debt and exorbitant borrowing costs, that prevent them from reviving their economies, UN chief António Guterres said on Thursday.
Speaking at the Paris Finance Summit, Mr. Guterres said many African States were spending more on debt repayments than on desperately needed healthcare, and that over 50 countries were either in default or “dangerously” close to it.
The UN chief called for a debt relief mechanism that supports payment suspensions, longer lending terms and lower rates to make borrowing more affordable for poorer nations, as well as increased access to liquidity for developing countries via the International Monetary Fund’s Special Drawing Rights.
Mr. Guterres also repeated his urgent call to end fossil fuel subsidies and increase climate adaptation funding for vulnerable countries.
“Taken together, these steps would help to beat poverty and hunger, uplift developing and emerging economies, and support investments in health, education and climate action,” he said, stressing that the measures would enable a “giant leap” towards global justice.
Doing nothing is simply not an option and at the halfway point to reaching the 17 Sustainable Development Goals (SDGs) they are “drifting further away by the day”, he warned delegates to the Summit for a New Global Financing Pact.
He said it was clear the international financial architecture built in the aftermath of World War Two “has failed in its mission to provide a global safety net for developing countries.
“It essentially reflects, even with some changes, the political and economic power dynamics of that time”, when three quarters of today’s nations weren’t around the table at Bretton Woods.
No solution without reform
‘Urgent action’
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