Guterres’ four point action plan for the debt crisis – NationNews Barbados –

Guterres’ four point action plan for the debt crisis – NationNews Barbados –

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United Nations Secretary-General António Guterres (Photo by Sandy Pitt)

United Nations Secretary-General António Guterres on Monday proposed an urgent four-point action plan for the debt crisis, aimed at addressing the multiple challenges facing world leaders today.

Addressing the opening ceremony and plenary session of the 15th session of the United Nations Conference on Trade and Development which is being held in Barbados through October 7, he said there was “ four glaring challenges which, if not taken up, make any notion of prosperity for all a dream ”and they needed to be addressed.

They are: “over-indebtedness, strapped investment systems, unfair trade and a climate emergency that leaves small island developing states like Barbados dangerously vulnerable.”

The first challenge, Guterras told the audience, was to tackle the debt overhang, because if it was “left unchecked” it was a “dagger at the heart of the global recovery”.

“Countries cannot rebuild if they are held back. The international community has taken some positive steps, but it is time to take a giant leap in support, ”he said.

“For starters, we know that national budgets are strained by COVID-19, so we need to push for an immediate increase in cash flow for the countries that need it most. I welcome the recent $ 650 billion Special Drawing Rights (SDR) issue by the International Monetary Fund. But much of this support goes to the countries that need it least, because it is distributed according to the quotas.

“Today, I call for a substantial reallocation of unused SDRs, not token, a substantial reallocation to vulnerable countries in need – including middle-income countries,” he said.

“Second, we know that countries are being crushed by the costs of servicing debt, so we need an extension and expansion of the G20’s debt-service suspension initiative until the end of the decade. next year. The Initiative and the Common Framework for Addressing Debt Beyond DSSI have great potential to alleviate the debt crisis, but their eligibility and timing are too limited.

“The suspension of debt service should be extended until next year and also made available to all countries in need, including middle-income countries,” said the secretary-general of the UN.

The third point of the plan is to suspend debt payments, which, according to Guterras, “will not be enough in many countries” which “will need effective debt relief, involving both public creditors. and private.

“I renew my call for a comprehensive strategy to reform the international debt architecture – including debt restructuring or reduction, especially for middle-income countries – to help them avoid cycles murderers of waves of debt. We should look at innovative debt instruments such as debt swaps, buybacks and swaps.

“Fourth and finally, we need private funding to help fill the void. It is deeply unfair that rich countries can borrow cheaply and spend their way to recovery, while low and middle income countries struggle to keep their economies afloat.

“We need to bring the public and private sectors together to develop innovative financing tools to accelerate the return of private investment to pre-pandemic levels, which in turn will accelerate the recovery. And we must increase support from multilateral development banks to reduce risk and attract capital to bankable, job-creating projects in communities that need it.

“Overall, this debt crisis action plan can help ensure that no government is forced to choose between servicing its debt and that of its people,” Guterres said. (GBM)

Robert P. Matthews