GENEVA: The heavy debt weighing on developing countries can be alleviated through readily available measures, the UN’s trade and development chief said, pleading for bold international action.
Rebeca Grynspan compared the debt burden facing poorer countries to “a reverse blood transfusion”, with money flowing “from the ones that need it to the ones that don’t”. In 2022 — the last year for which there are clear statistics — developing countries “paid almost $50 billion more to their external creditors than they received in fresh disbursements”, UNCTAD said in a recent report.
“What we need to be aware is that the markets are not in distress, people are,” Grynspan told AFP in an interview this week. “We are in a debt crisis.” The former Costa Rican vice president and government minister pointed out that it was “the small and medium-sized countries that don’t move the markets, that are the ones that are in the distress”.
They are “in a situation where they are spending more on their debt than on human development, on their own health or education” systems.
UNCTAD, she said, estimated that currently “there are 52 countries that are either in debt distress or on the brink of debt distress”.
Grynspan said she planned to address the issue during this week’s meetings of the International Monetary Fund and World Bank in Washington.
Grynspan, who in 2021 became the first woman to lead the agency, has raised its profile by participating in G20 meetings, and also by representing the UN on difficult briefs.
She has among other things played a vital role in negotiations towards ensuring the continued export of fertilisers from Russia — vital for global food security. There have been numerous efforts over the decades to resolve debt problems weighing on poor countries, but Grynspan said they have been so slow and complicated that they often act as a “deterrent”.
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