Lazy eyes listen
The UN Development Programme (UNDP) has issued a warning about the situation of developing countries as a major G20 ministerial conference in India stalls on debt relief. This comes on the heels of a UN report last week that detailed the threat of public debt to half of the world.
G20 members convened on Monday in Gandhinagar, Gujarat, but made little to no headway in discussions over restructuring developing-country debt, according to the Associated Press.
“I think the bottom line is, as of [July] 2023, the issue of debt restructuring is really not advancing on the scale that is called for and needed,” UNDP administrator Achim Steiner told Reuters, calling the situation a “grave concern.”
Last week, UN Secretary General Antonio Guterres warned that 52 countries were on the verge of default because they had no way of reducing their debt burden. In promoting a UNCTAD research on the growing problem of debt, Guterres stated that 3.3 billion people lived in nations that spent more on interest payments than on health or education.
“This is more than a systemic risk – it’s a systemic failure,” Guterres declared last Wednesday.
According to UNCTAD, at least 19 developing countries spent more on interest than on education, while another 45 paid more than on healthcare. According to the UN, about 40% of the world is in significant debt.
The “inherent inequality in the international financial system, burdening developing countries disproportionately,” according to UNCTAD, was particularly concerning, with African countries paying four times more in interest than the United States and eight times more than the richest nations in Europe. Restructuring this debt is tough because private creditors now hold 62% of it, up from 47% a decade earlier.
Guterres warned last week that global public debt would reach an all-time high of $92 trillion in 2022, a five-fold increase since 2000. The UNDP attributes the rise to the Covid-19 epidemic as well as the rise in inflation and interest rates. According to the UN, more than 20% of the world’s population – over 1.65 billion people – are currently struggling to put food on the table and live on less than $3.65 per day.
Because of the NATO summit in Lithuania, when the US-led military alliance offered even more support for the Ukrainian conflict, Guterres’ and UNDP’s warnings went mostly unnoticed.