OTTAWA (CU)_The United Nations, together with Canada and Jamaica, has called for bolder action to prevent the emerging debt crisis, following the COVID-19 pandemic.
UN Secretary-General Antonio Guterres joined several world leaders, including Canadian Prime Minister Justin Trudeau and his Jamaican counterpart PM Andrew Holness, in a virtual meeting on Monday (29 March).
Following the high-level virtual meeting, the UN chief said that although a debt crisis would have the greatest impact on poorer nations, however, the matter is not confined to any region on country, as there are “credible forecasts” of losses amounting to trillions of dollars in global output.
“Unfortunately, not enough has been done to support those countries — many dozens of countries — that are at highest risk,” he told reporters.
Therefore, Guterres called for “far bolder steps” to prevent a debt crisis, including an extension of the moratorium on debt repayments, as well as the provision of urgent cash liquidity for developing nations to invest in the post-pandemic economic recovery.
Earlier this month, the Group of Seven leading industrial nations agreed to support the expansion of the International Monetary Fund’s (IMF) reserves for the first time since the 2009 financial crisis, in order to help developing nations cope with the COVID-19 pandemic. The move was welcomed by the UN Secretary-General who has been pushing for increased liquidity to respond to the pandemic over the past year.
Meanwhile, the Jamaican PM urged the Group of 20 major economies to further extend the debt service suspension “to at least the end of this year, and ideally, to the end of 2022″.
Emphasising that the debt crisis is already “emerging”, PM Holness called the G20 to expand the debt service suspension so as to include vulnerable middle-income countries as well.
Following the high-level discussion, the Canadian Prime Minister said that the G7 and the G20 are working together to respond to the matter.
“We need to make sure at the same time as we are focused on the health, we are also focused on the health of the global economy,” PM Trudeau said. “And that means taking real action by leading countries around the world to recognize that it is not just in the global interest but in their own interest to ensure a more equitable global recovery.”
