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UNCTAD’s Rebeca Grynspan compared the debt burden facing poorer countries to “a reverse blood transfusion” – Copyright AFP Sam Yeh<\/small><\/em><\/p>\nChristophe VOGT<\/em><\/p>\nThe heavy debt weighing on developing countries can be alleviated through readily available measures, the UN\u2019s trade and development chief said, pleading for bold international action.<\/p>\n
Rebeca Grynspan compared the debt burden facing poorer countries to \u201ca reverse blood transfusion\u201d, with money flowing \u201cfrom the ones that need it to the ones that don\u2019t\u201d. \u00a0<\/p>\n
In 2022 \u2014 the last year for which there are clear statistics \u2014 developing countries \u201cpaid almost $50 billion more to their external creditors than they received in fresh disbursements\u201d, UNCTAD said in a recent report.<\/p>\n
\u201cWhat we need to be aware is that the markets are not in distress, people are,\u201d Grynspan told AFP in an interview this week. \u201cWe are in a debt crisis.\u201d<\/p>\n
The former Costa Rican vice president and government minister pointed out that it was \u201cthe small and medium-sized countries that don\u2019t move the markets, that are the ones that are in the distress\u201d.<\/p>\n
They are \u201cin a situation where they are spending more on their debt than on human development, on their own health or education\u201d systems.<\/p>\n
\u2013 \u2018Too slow\u2019 \u2013<\/p>\n
UNCTAD, she said, estimated that currently \u201cthere are 52 countries that are either in debt distress or on the brink of debt distress\u201d.<\/p>\n
Grynspan said she planned to address the issue during this week\u2019s meetings of the International Monetary Fund and World Bank in Washington.<\/p>\n
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.<\/p>\n
She has among other things played a vital role in negotiations towards ensuring the continued export of fertilisers from Russia \u2014 vital for global food security.<\/p>\n
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 \u201cdeterrent\u201d.<\/p>\n
\u201cCountries think twice before they go into a restructuring process that takes so long,\u201d she said, so \u201cthey prefer to pay, although the cost and pain is so big\u201d.<\/p>\n
\u201cIt\u2019s a huge cost for the population.\u201d<\/p>\n
Grynspan hailed efforts underway to lessen the burden on countries appealing for aid, including an IMF call to speed up the treatment of debt relief applications.<\/p>\n
She stressed though that \u201cthese are ad hoc mechanisms\u201d.\u00a0<\/p>\n
In the long term, \u201cwe need an internationally-agreed, stable mechanism for debt restructure.\u201d<\/p>\n
\u2013 \u2018Great relief\u2019 \u00a0\u2013<\/p>\n
Some countries do not have the luxury of waiting for the creation of such a mechanism, and need immediate relief, she said.<\/p>\n
Grynspan highlighted that the dire situations many countries face stem more from cascading crises suffered during the Covid-19 pandemic than from government mismanagement.\u00a0<\/p>\n
\u201cSo there is a reason and a rationale for the international community to come with much more help and support for these countries,\u201d she said.\u00a0<\/p>\n
\u201cA low-hanging fruit,\u201d she said, would be to remove the surcharges that 17 countries currently pay to the IMF.<\/p>\n
Exempting them from those charges, which are aimed at encouraging countries to quickly exit IMF assistance, would swiftly free up $2 billion, according to Grynspan.<\/p>\n
That money, she said, could provide \u201cgreat relief\u201d if used towards \u201cthe needs of the people of these countries\u201d.<\/p>\n
She also hailed an idea put forward by the World Bank, the Inter-American Development Bank and its African counterpart to provide guarantees to \u201creally lower the premium of the interest rates in the developing countries\u201d to attract private investment.\u00a0<\/p>\n
And she suggested accelerating the IMF\u2019s Resilience and Sustainability Trust (RST), aimed at helping vulnerable countries build resilience to shocks, including from climate change.<\/p>\n
Other interesting proposals, she said, included to swap debt for nature, and to automatically suspend interest payments for countries hit by natural disasters.<\/p>\n
\u201cThose are things that can be decided today,\u201d Grynspan said.<\/p>\n
\u201cWe don\u2019t have to wait a decade to have results.\u201d<\/p>\n<\/p><\/div>\n
UN says solutions exist to rapidly ease debt burden of poor nations
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#solutions #exist #rapidly #ease #debt #burden #poor #nations<\/p>\n","protected":false},"excerpt":{"rendered":"
UNCTAD’s Rebeca Grynspan compared the debt burden facing poorer countries to “a reverse blood transfusion”…<\/p>\n","protected":false},"author":1,"featured_media":4175,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[7],"tags":[106,107,2182,2543,2544,183,252,2542],"yoast_head":"\n
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