UNDP calls for a pause in the payment of the debt of countries due to the increase in poverty

ANDl United Nations Development Program (UNDP) proposed this Friday to G20 grant some countries a pause in the payment of their public debt so that they can respond to the increase in poverty that has been seen in recent years.

In a report, the UNDP warns that between 2020 and 2023 a total of 165 million more people have fallen into poverty, most of them in low- and middle-income countries.

According to the document, while some states have been able to invest in safety nets in the last three years and have protected their vulnerable citizens, those with significant levels of debt have not been able to do so.

“Debt servicing is making it increasingly difficult for countries to support their populations with investments in health, education and social protection”UNDP administrator Achim Steiner said in a statement.

According to Steiner, “There is a human cost in not restructuring the sovereign debt of developing countries” and they are needed “new mechanisms” to ensure that the financial architecture works for the most vulnerable.

The UNDP appeal, presented ahead of the next meeting of the G20 finance ministers to be held next week, joins others along the same lines recently launched by the UN Secretary General, António Guterres.

According to the organization, over the past decade debt repayments have been accounting for an increasing share of public spending for developing economies, which often have to pay much higher interest rates than rich countries.

With rising interest rates seen around the world this year, UNDP sees a need for temporary relief for struggling states, which are running out of fiscal space to invest and seeing significant increases in poverty.

This UN agency defends that the pause it proposes would cost a little more than US$ 14,000 million, around 0.009% of global GDP, and would allow millions of people to be lifted out of poverty.

Source: EFE