UNDP estimated that more than half of the world’s poorest people live in 54 nations, thus, rapid debt relief is required in order to prevent them from falling into even deeper poverty
New Delhi: The United Nations Development Programme (UNDP) on Tuesday warned the poorest parts of the world against the debt crisis. On Tuesday, it stated that a serious debt crisis is now taking hold in the poorest parts of the world, reported Reuters.
Reuters said that in its report UNDP estimated that more than half of the world’s poorest people live in 54 nations. Hence, rapid debt relief is required in order to prevent them from falling into even deeper poverty and give them a fighting chance against climate change.
“A serious debt crisis is unfolding across developing economies, and the likelihood of a worsening outlook is high,” the report published on Tuesday said.
According to a report by Reuters, this warning from UNDP comes as the International Monetary Fund and World Bank hold meetings in Washington this week amid rising global recession worries.
Achim Steiner, UNDP Administrator, appeals for a series of measures, including writing off debt, offering wider relief to greater numbers of countries, and even adding special clauses to bond contracts to provide breathing space during crises, reported Reuters.
Also Read: Top Three Cryptocurrencies To Watch Closely: Avalanche, Litecoin, & Big Eyes Coin
“It is urgent for us to step up and find ways in which we can deal with these issues before they become at least less manageable and perhaps unmanageable,” he said while addressing reporters.
Poverty will increase in the absence of comprehensive debt restructuring, and crucial investments in climate adaptation and mitigation will not be made.
Poverty will increase in the absence of comprehensive debt restructuring, and crucial investments in climate adaptation and mitigation will not be made.
The UNDP’s report also called for a recalibration of the G20-led Common Framework. It is a plan for helping countries pushed into financial trouble by the COVID-19 pandemic restructure debt. So far only Chad, Ethiopia, and Zambia have used it, reported Reuters.
It suggested expanding the Common Framework’s eligibility so that all deeply indebted countries could use it rather than only the roughly 70 poorest countries. It suggested suspending any debt payments automatically while the procedure was taking place.
“Both will act as an incentive for creditors to participate and to maintain a reasonable timeline, and it could also remove some of the hesitancy caused by rating fears for debtor countries,” the report said.
As an independent media platform, we do not take advertisements from governments and corporate houses. It is you, our readers, who have supported us on our journey to do honest and unbiased journalism. Please contribute, so that we can continue to do the same in future.
