Guterres urges ‘decisive action’ to avoid debt crisis in developing world
Skip to main content
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Splash
  • Features
  • Videos
  • Long Read
  • Games
  • Epaper
  • More
    • COVID-19
    • Bangladesh
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Subscribe
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
The Business Standard
SATURDAY, MAY 21, 2022
SATURDAY, MAY 21, 2022
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Splash
  • Features
  • Videos
  • Long Read
  • Games
  • Epaper
  • More
    • COVID-19
    • Bangladesh
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Subscribe
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
Guterres urges ‘decisive action’ to avoid debt crisis in developing world

World+Biz

UNB
30 March, 2021, 12:10 pm
Last modified: 30 March, 2021, 12:16 pm

Related News

  • G7 backs debt relief efforts for Sri Lanka - draft communique
  • Ukraine war could cause global food crisis: UN
  • N Korea Covid outbreak could have 'devastating' impact on human rights, UN says
  • US calls out Russia, China opposition to UN action on N Korea
  • 'If the govt can control 25% of the market, the influence of big importers will be reduced' 

Guterres urges ‘decisive action’ to avoid debt crisis in developing world

Sovereign downgrades cause borrowing costs to rise, especially for developing countries, which can, in turn, increase the risk of more nations taking on unsustainable debt – especially if the Covid-19 pandemic is more protracted and deeper than expected

UNB
30 March, 2021, 12:10 pm
Last modified: 30 March, 2021, 12:16 pm
United Nations Secretary-General Antonio Guterres speaks during an interview with Reuters at UN headquarters in New York City, New York, US, September 14, 2020.  Photo: Reuters
United Nations Secretary-General Antonio Guterres speaks during an interview with Reuters at UN headquarters in New York City, New York, US, September 14, 2020. Photo: Reuters

Though significant steps have been taken to prevent debt crises across the world sparked by the Covid-19 crisis, they have not been sufficient to restore economic stability in many developing countries, according to a policy brief issued by the UN Secretary-General on Monday.

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, to invest in recovery and the Sustainable Development Goals (SDGs), including urgently needed climate action, Secretary-General António Guterres said.

According to the policy brief, 42 economies borrowing from capital markets have experienced sovereign downgrades since the start of the pandemic, including 6 developed countries, 27 emerging market economies, and 9 least developed countries.

Sovereign downgrades cause borrowing costs to rise, especially for developing countries, which can, in turn, increase the risk of more nations taking on unsustainable debt – especially if the Covid-19 pandemic 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," Guterres 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.

Need for debt relief

The brief highlights the need for debt relief to create space for investments in recovery and for achieving the SDGs.

Even in the cases of elevated debt, new borrowing can lead to improved creditworthiness if it finances productive investments, it noted, adding that debt relief can also free up resources, create conditions under which countries can return to voluntary market access, and may lower a country's overall borrowing costs, with positive impacts across the whole economy.

Assistance for small island states

The Secretary-General also urged governments to provide fresh concessional financing for developing countries, especially least developed countries and small island developing States, recapitalise multilateral development banks and accelerate the timetable for replenishing the funds, meet official development assistance (ODA) commitments and provide long-term financing to developing countries for investment in long-term growth.

In support of recent endorsements from the G7, the document also called for a new general allocation of special drawing rights reiterating the need to combine a voluntary reallocation of the rights from developed to developing countries.

The brief also urged the G20 to extend the World Bank's Debt Suspension Initiative (DSSI) until the end of June 2022 and include middle-income countries, notably small island developing States that have been gravely affected by the crisis.

It also urged the bloc to extend the eligibility for debt relief under its Common Framework for Debt Treatment Beyond the DSSI to other vulnerable countries on a case-by-case basis, as well as consider other mechanisms that would allow countries to access the framework, without compromising the credit rating.

Financing the 2030 Agenda

The policy brief was released to coincide with the high-level meeting of Heads of State and Government on 'Financing for Development in the era of Covid-19 and Beyond'.

The virtual meeting on Tuesday, followed up on a series of meetings and last year to mobilise action to assist the economic recovery from the pandemic.

The high-level meeting is convened jointly by the Secretary-General Prime Minister Andrew Holness of Jamaica, and Prime Minister Justin Trudeau of Canada.

'Liquidity is vital'

Addressing the high-level meeting, Guterres called for urgent assistance for developing countries so they have the financial liquidity they need to respond to the pandemic as well as invest in recovery, or risk a "lost decade" in development terms.

"I'm encouraged to see that our insistence on the necessity for a new allocation of Special Drawing Rights by the International Monetary Fund (IMF), and the reallocation of unused SDRs to support vulnerable countries, including middle income ones, is now winning widespread acceptance … let us make sure it happens – and is properly managed to the benefit of the developing world", he said.

The Secretary-General urged a "three-phase" approach to debt, including a moratorium on debt payments, targeted debt relief, and reforms to the international debt architecture.

He also called for more responsible borrowing and lending, accepted by debtor and creditor countries, investors, market participants, credit rating agencies and international organisations, highlighting the need for a time-bound, open dialogue to build trust and transparency in a systematic, inclusive way.

"Together, with collective resolve, we can help all countries invest in response, recovery, and a more sustainable, resilient future."

Top News

Antonio Guterres / UN / UN Secretary General / debt / crisis / developing countries

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • A vendor wearing plastic overalls and surgical mask, waiting at his stall for buyers at Karwan Bazar. The ever-bustling marketplace has very few buyers now as many people have either left the city or are purchasing online to avoid going out. Photo: Mumit M/TBS
    Grocers’ plight as sales on credit increase
  • Policies on cards to pave way for private heliports, helipads
    Policies on cards to pave way for private heliports, helipads
  • Concerns over india's wheat export ban
    Tough conditions get in way of Indian wheat import

MOST VIEWED

  • Workers walk as oil pumps are seen in the background in the Uzen oil and gas field in the Mangistau Region of Kazakhstan 13 November, 2021. REUTERS/Pavel Mikheyev
    Oil settles up as supply risks outweigh economic worries
  • U.S. President Joe Biden attends a bilateral meeting with South Korean President Yoon Seok-youl at the People's House in Seoul, South Korea, May 21, 2022. REUTERS/Jonathan Ernst
    S Korea, US vow new measures to deter N Korea, expand economic partnership
  • A hotel complex destroyed by a Russian missile during Russia's invasion of Ukraine is pictured in Odesa, Ukraine, on 8 May, 2022. REUTERS/Igor Tkachenko
    US, others walk out of APEC talks over Russia's Ukraine invasion
  • The Buffalo shooter targeted Black people, linking mass migration with environmental degradation and other eco-fascist ideas. Photo: Reuters
    Eco-fascism: The greenwashing of the far right
  • Former US President Donald Trump speaks at the Conservative Political Action Conference (CPAC) in Orlando, Florida, US 28 February, 2021. PHOTO: REUTERS/Octavio Jones/File Phoo
    Trump pays $110,000 fine for blocking New York state tax probe
  • Photo: Collected
    Palestinian teen shot in Israeli raid in occupied West Bank

Related News

  • G7 backs debt relief efforts for Sri Lanka - draft communique
  • Ukraine war could cause global food crisis: UN
  • N Korea Covid outbreak could have 'devastating' impact on human rights, UN says
  • US calls out Russia, China opposition to UN action on N Korea
  • 'If the govt can control 25% of the market, the influence of big importers will be reduced' 

Features

The Buffalo shooter targeted Black people, linking mass migration with environmental degradation and other eco-fascist ideas. Photo: Reuters

Eco-fascism: The greenwashing of the far right

22m | Panorama
Green-backed Heron on a tilting stalk. Photo: Enam Ul Haque

Green-backed Heron: Nothing but a prayer to catch a fish  

2h | Panorama
Illustration: TBS

‘High logistics cost weakens Bangladesh’s competitiveness’

4h | Panorama
Every morning is a new beginning for all

Seashore

5h | In Focus

More Videos from TBS

Photo: TBS

US Congress to hold first public UFO panel

52m | Videos
Pollution killing 9 million people a year

Pollution killing 9 million people a year

52m | Videos
Photo: TBS

Steps necessary to ensure economic stability

1h | Videos
Photo: TBS

The right way to apply for jobs at int'l orgs

1h | Videos

Most Read

1
Tk100 for bike, Tk2,400 for bus to cross Padma Bridge
Bangladesh

Tk100 for bike, Tk2,400 for bus to cross Padma Bridge

2
A packet of US five-dollar bills is inspected at the Bureau of Engraving and Printing in Washington March 26, 2015. REUTERS/Gary Cameron
Banking

Dollar hits Tk100 mark in open market

3
The story of Bangladesh becoming a major bicycle exporter
Industry

The story of Bangladesh becoming a major bicycle exporter

4
PK Halder: How a scamster rose from humble beginnings to a Tk11,000cr empire
Crime

PK Halder: How a scamster rose from humble beginnings to a Tk11,000cr empire

5
Representative Photo: Pixabay.
Bangladesh

Microplastics found in 5 local sugar brands

6
Mushfiq Mobarak. Photo: Noor-A-Alam
Panorama

Meet the Yale professor who anchors his research in Bangladesh and scales up interventions globally

The Business Standard
Top
  • Home
  • Entertainment
  • Sports
  • About Us
  • Bangladesh
  • International
  • Privacy Policy
  • Comment Policy
  • Contact Us
  • Economy
  • Sitemap
  • RSS

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net

Copyright © 2022 THE BUSINESS STANDARD All rights reserved. Technical Partner: RSI Lab