Doha, Qatar:
A top UN official has warned that “urgent” measures are needed to help 52 countries facing debt service problems that put some at risk of default.
Achim Steiner, head of the United Nations Development Programme, told AFP that 25 of the 52 were spending more than a fifth of government revenue to service external debt.
“The situation for developing countries is really dire when it comes to national debt,” Steiner said in an interview on the sidelines of the Least Developed Countries (LDCs) summit in Doha on Saturday.
The UN agency estimates that “52 countries are either in debt crisis or one step away from debt crisis and possible default,” he said.
Steiner did not name the countries involved, but the UNDP released a report last week calling for a 30 percent write-off of external debt for 52 countries at 2021 values.
The 52 includes Argentina, Lebanon and Ukraine along with 23 countries from sub-Saharan Africa, 10 from Latin America and the Caribbean, and eight from East Asia and the Pacific.
Steiner said “financial markets are not paying enough attention” because the 52 hold only three percent of global foreign debt, but a sixth of the world’s population.
development shocks
Twenty-five countries have spent a fifth of government revenue on debt repayment, which is “not sustainable”, he said.
“Therefore, we have called very clearly for urgent ways to inject liquidity while restructuring and rescheduling debt, because otherwise we may see country after country falling into debt crisis territory.”
On Saturday, UN Secretary-General Antonio Guterres criticized the world’s rich countries and energy giants for burdening LDCs with “ludicrous” interest rates.
Poor countries’ debt has multiplied over the past decade due to the coronavirus pandemic, high food and fuel bills and financial woes.
Many have lapsed in the last two years.
Steiner said African countries such as Nigeria, Mali and Burkina Faso have lost up to 20 years of development progress amid a rise in political violence and government failure to provide basic services, security, health and education.
He said the total debt was difficult to establish as more than 60 per cent is owed to private creditors.
“Now you have the war in Ukraine, you have the effect on global food and energy prices and the inflationary effect is driving up interest rates, especially when it comes to debt,” he said.
Rising fuel costs have created “a short-term shock” for countries struggling to maintain basic financial stability, according to Steiner.
The UN official said they are facing increasing pressure to invest in renewable energy and combat climate change.
“Inevitably, the ability of poor countries and middle-income countries to significantly expand clean energy infrastructure … is being affected,” he said, adding that greater access to “clean and affordable electricity” for poorer countries is being affected. called for international investment.
Steiner said energy security has become such a hot international topic over the past two years that he expects “exponential growth” in investment in clean energy infrastructure over the next five years.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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