UNITED NATIONS : UN chief urges 'decisive action' on debt relief amid Covid. And says steps taken to restore economic stability of developing countries are insufficient.

UN Secretary-General Antonio Guterres has called for 'decisive action' to provide debt relief to developing countries that have been hit hard by the coronavirus pandemic as he said the steps taken so far to prevent debt crises across the world have not been sufficient to restore economic stability.

More than a year into the pandemic, the fiscal impacts of the crisis are triggering debt distress in a growing number of countries and is severely limiting the ability of many countries to invest recovery and Sustainable Development Goals [SDGs], including urgently needed climate action, according to a policy brief issued by the UN secretary-general on Monday.

The policy brief said that 42 economies borrowing from capital markets have experienced sovereign downgrades since the start of the pandemic, including six developed countries, 27 emerging market economies, and nine least developed countries.

Sovereign downgrades cause borrowing costs to rise, especially for developing countries, which can, in turn, increase the risk of more countries tipping over into unsustainable debt- especially if the Covid-19 is more protracted and deeper than expected.

''Unless we take decisive action on debt and liquidity challenges, we risk another 'lost decade' for many developing countries, putting the achievement of the SDGs by the 2030 deadline definitively out of reach'', Gueterres said.

The policy brief, entitled  Liquidity and Debt Solutions to Invest in the SDGs, takes stock of the global policy response since April last year, assess remaining gaps and challenges   for their implementation, as well as propose updates to the recommendations, presented last year, in light of developments over the past 12 months.

The policy brief highlighted the need for debt relief to create space for investments in recovery and for achieving the SDGs. [AFP]


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