UN Secretary-General Antonio Guterres announced that the global public debt reached a record USD 92 trillion in 2022, of which developing countries shoulder 30 percent - a "disproportionate amount." In a speech during the presentation of the global debt report in 2022, entitled 'A World of Debt prepared by the UN Global Crisis Response Group,' Guterres said that half of humanity lives in countries that are forced to spend more on servicing their debt than on health and education which is nothing less than a development disaster.
He warned that 3.3 billion people suffer from their governments' need to prioritize debt interest payments over "essential investments" in the Sustainable Development Goals or the energy transition.
A total of 52 countries - almost 40 percent of the developing world - are in "serious debt trouble", Guterres said, backing calls for them to receive urgent fiscal relief.
He insisted that the catastrophic levels of public debt in developing countries are a "systemic failure" that resulted from colonial-era inequality built into "our outdated financial system." "That system has not fulfilled its mandate as a safety net to help all countries manage todays cascade of unforeseen shocks - the pandemic; the devastating impact of the climate crisis; and the Russian invasion of Ukraine," Guterres added.
UN Secretary-General stressed that on average, borrowing costs are four times higher for African countries than for the US and eight times higher than for the wealthiest European economies.
Poorer nations rely increasingly on private creditors who charge "sky-high" rates and find themselves forced to borrow more "for their economic survival", he said.
The new UN report proposes a number of urgent remedies, including an "effective debt workout mechanism" that supports payment suspensions, longer lending terms and lower rates, the Guterres noted.
The report also calls for a "massive" scale-up of affordable long-term financing, by transforming the way that Multilateral Development Banks function, re-engineering them to support sustainable development and leveraging private resources.
Guterres recalled that the Bridgetown Agenda, led by Prime Minister of Barbados and the recent Summit for a New Global Financial Pact in Paris, had generated "other important proposals" regarding international debt relief, and expressed hopes that the upcoming G20 meeting in September will take some of these ideas forward.
Source: Qatar News Agency