UN Secretary-General Ant\u00f3nio Guterres says innovative measures to address debt are required to help the world\u2019s more than 100 middle-income countries expand their economies and exit the COVID-19 pandemic.<\/p>\n\n\n
Guterres told the General Assembly on Thursday at UN headquarters in New York while addressing a high-level meeting on these countries.<\/p>\n\n\n
According to him, middle-income countries account for more than half of the UN\u2019s 193 Member States, underlining the need for financing to help them recover in the wake of the global crisis.<\/p>\n\n\n
He said that middle-income countries should have their debts suspended into 2022 to cope with the social and economic impact of the virus.<\/p>\n\n\n
Many were already dealing with mounting debt before the pandemic, which has only further aggravated the situation.<\/p>\n\n\n
\u201cIn small island states, for example, the collapse of tourism has greatly hindered their capacity to repay debts.<\/p>\n\n\n
\u201cAnd while the global response to the debt crisis is rightly attempting to support low-income countries, middle-income countries must not be left behind,\u201d he said.<\/p>\n\n\n
According to him, diversity defines the world\u2019s middle-income countries, which were already home to some 62 per cent of the world\u2019s poor prior to the pandemic.<\/p>\n\n\n
\u201cThe list includes India, which has a population of more than one billion, and Palau, an archipelago in the Pacific island with less than 20,000 people.<\/p>\n\n\n
\u201cBesides population size, these countries also vary in economic activity, geography and income levels per capita, which ranges from 1,000 dollars to 12,000 dollars annually, meaning they often exceed per capita income thresholds for debt relief.\u2019\u2019<\/p>\n\n\n
Guterres emphasised the need for better mechanisms and international cooperation to address what he characterised as their mounting and unsustainable debt levels.<\/p>\n\n\n
\u201cEven if these countries manage to avoid default, they will see long-lasting limitations on critical government spending on a variety of development and climate objectives in the years to come,\u201d he warned.<\/p>\n\n\n
He underlined the need for \u201ca new debt mechanism\u201d that would include debt swaps, buy-backs and cancellations.<\/p>\n\n\n
\u201cThis is the moment to tackle long-standing weaknesses in the international debt architecture, from lack of agreed principles, to restructurings that provide too little relief, too late.<\/p>\n\n\n
\u201cInnovative instruments to allow debt restructuring and meaningful debt reduction can help middle-income countries expand their fiscal space to boost investment and steer a resilient and sustainable recovery from the crisis.\u201d<\/p>\n\n\n
In March, the secretary-general convened world leaders for a meeting to bolster support for action to stave off the debt crisis in developing countries.<\/p>\n\n\n
The UN chief was encouraged to see growing recognition around the need for new Special Drawing Rights (SDRs), a type of foreign reserve asset developed by the International Monetary Fund (IMF).<\/p>\n\n\n
However, he said unused SDRs must be re-allocated to support vulnerable nations, including middle-income countries.<\/p>\n\n\n
Last year, the G20 leading economies announced a debt service suspension initiative which allows the world\u2019s poorest countries to temporarily halt bilateral credit payments.<\/p>\n\n\n
The secretary-general said the measure should be extended into 2022 and \u201cmade available to highly indebted, vulnerable middle-income countries that request it.\u201d<\/p>\n\n
UN Secretary-General Ant\u00f3nio Guterres says innovative measures to address debt are required to help the world\u2019s more than 100 middle-income countries expand their economies and exit the COVID-19 pandemic. Guterres told the General Assembly on Thursday at UN headquarters in New York while addressing a high-level meeting on these countries. According to him, middle-income countries […]<\/p>\n","protected":false},"author":1,"featured_media":1399,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[206],"class_list":["post-31311","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-foreign","tag-debt","has-post-title","has-post-date","has-post-category","has-post-tag","has-post-comment","has-post-author",""],"yoast_head":"\n