Report – Building blocks out of crisis: UN SDG stimulus plan – issued on the eve of the G20 Finance Ministers and Central Bank Governors Meeting in Bangalore, India, which begins on Friday.
UNDP has called for action to protect developing countries from the effects of today’s overlapping crises, while ensuring that financing is aligned to support an equitable global transition. , comprehensive and fair.
Global financial transformation
“The building blocks for transforming the global financial system were discussed at the G20 – reform of multilateral development banks, debt restructuring and liquidity injections – but with a rift between developed countries and is developing rapidly, We need to move from words to actions” speak Achim Steiner, UNDP Director.
The policy brief identified 52 low- and middle-income developing economies that are either in debt distress or at high risk of debt distress. Collectively, they make up more than 40% of the world’s poorest people.
According to the report, a 30% cut in their foreign public debt stockpile by 2021 could save up to $148 billion in debt payments over eight years.
High debt burden
UNDP says 25 developing economies now have external debt payments more than 20% of total revenue – the highest number of countries in more than two decades – impact on spending on essential services, including climate change adaptation and response measures.
“Countries with the most debt burden and lack of access to finance are also suffering from battered by many other crises; they are among the people most affected by the economic impact of COVID-19Mr. Steiner said.
“It’s time Addressing the widening gap between rich and poor countriesto change the multilateral landscape and create a debt structure that is fit for purpose in our complex, interconnected, and post-COVID world,” he added.
SDG . stimulus plan
The policy brief reveals how “substantial financial space” can be unleashed by expanding access to lower-cost and longer-term capital – two of the focus areas highlighted. enter The United Nations Secretary-General’s stimulus plan give Sustainable development goals (SDGs), launched last week.
The 17 SDGs provide a blueprint for a greener, more equitable future and have a deadline of 2030.
George Gray Molina, UNDP Chief Economist, argues that developing economies simply cannot finance progress towards the Goals or climate commitments, if they are borrowing at the rate up to 14% while also having to pay more than 20% of sales to pay off debt.
“The billions of savings identified by UNDP are only possible if we all agree that it is time to reduce risks to development and finance climate,” he said.
The summary also shows how an additional $120 billion in savings could be created by “refinancing” middle-income country bond debt at the primary creditor’s interest rate. awake.
It also highlights the potential to reduce borrowing costs for investments that are in line with the SDGs and Paris Agreement about climate change.
