Many middle-income countries are grappling with an unsustainable debt burden as a result of the pandemic. However, there is still no global answer to their crisis situation. Now the UN chief is also calling for extensive measures.
As the World Bank found, upwards of 150 million people worldwide will be pushed into extreme poverty as a result of the crisis by the end of 2020 – with 8 of 10 of those people in middle-income countries. However, the vast majority of countries in the middle-income sector ist still neither eligible for the G20’s “Debt Service Suspension Initiative” (DSSI) urged by the World Bank and the IMF nor the “Common Framework for Debt Treatments beyond the DSSI”. To make debt relief available for middle-income countries at risk is a key demand of the DRGR project.
A demand that is now shared by the UN chief, as his remarks to the General Assembly show. In particular, António Guterres calls for a suspension of their debt into 2022 to cope with the social and economic impact of the virus. Next to that, he highlighted the importance of more international cooperation and better mechanisms, including debt swaps, buy-backs, and cancellation. Unused Special Drawing Rights (SDRs), supplementary foreign exchange reserve assets defined and maintained by the IMF, must be re-allocated to support vulnerable middle-income countries, Mr. Guterres added.
Read more about his statements here.
For a new proposal how to implement debt relief while advancing the implementation of Agenda 2030 and the Paris Agreement, read further here.