U.N. chief: Unchecked debt ‘dagger by way of coronary heart’ for international restoration

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NEW YORK, Oct 4 (Reuters) – U.N. Secretary-General Antonio Guterres warned on Monday that if left unchecked debt misery on this planet’s most weak international locations could be “a dagger through the heart of global recovery” from the coronavirus pandemic.

“The international community has taken a few positive steps, but it is time for a quantum leap in support,” Guterres stated, talking on the opening of the U.N. Conference on Trade and Development in Barbados.

As of mid-2021, over half of the world’s poorest international locations “are in external debt distress, or at risk of it,” World Bank President David Malpass stated final week. learn extra

The International Monetary Fund in August accepted a $650 billion allocation of Special Drawing Rights (SDRs) – the fund’s unit of change backed by {dollars}, euros, yen, sterling and yuan. Guterres pushed for a considerable re-allocation of unused SDRs – “not a symbolic one” – to weak international locations.

He additionally referred to as for G20’s Debt Service Suspension Initiative to be prolonged into subsequent 12 months and made out there to all international locations that want it, together with middle-income international locations, for a complete technique round reforming the worldwide debt structure and for personal finance to assist fill the hole.

“We know suspending debt payments will not be enough in many countries. They will need effective debt relief, involving both public and private creditors,” Guterres stated.

“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,” he stated.

Reporting by Michelle Nichols; Editing by Aurora Ellis

United Nations Secretary-General Antonio Guterres addresses the 76th Session of the U.N. General Assembly in New York City, U.S., September 21, 2021.  REUTERS/Eduardo Munoz/Pool//File Photo