Statement by UNDP Administrator Achim Steiner on the United Nations Secretary-General’s Report on Debt and COVID-19
Today, as the Spring Meetings of the International Monetary Fund (IMF) and the World Bank come to a close, UNDP welcomes decisions by the IMF, the World Bank Group and the G20 to immediately suspend service payments debt of 76 countries for one year, including 40 countries in sub-Saharan Africa.
This debt relief will play a critical role in helping countries prepare for, respond to and recover from the COVID-19 pandemic, including dealing with its devastating social and economic impacts.
However, as the UN Secretary-General points out in his new report, Debt and COVID 19: a united global response, the agreed debt suspension is not enough. Focusing only on the poorest countries will not be enough to cope with the scale of this emergency.
Debt relief should not be based on income level but on vulnerability. A hurricane can wipe out an economy within 8 hours. A pandemic will freeze a continent for months. These have nothing to do with income, wealth or GDP. They have everything to do with vulnerability.
The UN encourages all parties to put in place a debt moratorium for the next two years for the all vulnerable countries. If the virus doesn’t discriminate between countries based on their income level, neither should the international community.
As stated in the UN Secretary-General’s report, we call on all creditors – public and private, bilateral and multilateral – to take three steps towards debt sustainability in these extraordinary times.
First, establish an immediate debt moratorium for all developing countries to provide “breathing space” for all who need it to focus on crisis response.
Second, provide targeted debt relief to countries with unsustainable debt levels and provide the policy space needed to achieve the SDGs.
Third, as the immediate crisis recedes, review the long-standing challenges of the international debt architecture, to prevent defaults that could lead to protracted financial and economic crises.
In line with the Addis Ababa Action Agenda, all actions taken must be in line with country strategies to finance progress towards the Sustainable Development Goals (SDGs).
Shutting down economies to prevent the spread of this virus saves lives, but without simultaneous action decades of hard-won development progress could be lost. More than half a billion more people could slide into poverty, recent research shows.
This crisis has shown in the most brutal way possible how interconnected our world is. We must act in solidarity without borders to overcome it.