UN Secretary General urges debt relief for developing countries such as Jamaica in response to COVID-19

UN Secretary General urges debt relief for developing countries such as Jamaica in response to COVID-19

Thursday, May 28, 2020

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KINGSTON, Jamaica— United Nations Secretary-General António Guterres has warned that unless the world acts in a unified and concentrated manner now, the COVID-19 pandemic will cause unimaginable devastation and suffering around the world.

Addressing a high level meeting of world leaders, which he co-convened with Jamaica's Prime Minister Andrew Holness and the Prime Minister of Canada, Justin Trudeau, this morning, Guterres argued that the COVID-19 pandemic could lead to hunger and famine of historic proportions.

He warned that 60 million more people could be pushed into extreme poverty, up to half the global workforce – 1.6 billion people – without livelihoods, and a loss of $8.5 trillion in global output – the sharpest contraction since the Great Depression of the 1930s.

“The pandemic has demonstrated our fragility. Despite all the technological and scientific advances of recent decades, we are in an unprecedented human crisis because of a microscopic virus,” said Guterres as he called on world leaders to respond to the pandemic with unity and solidarity.

“A key aspect of solidarity is financial support.  I welcome the swift actions that have already been taken by the International Monetary Fund, the World Bank Group, the regional development banks and other international financial institutions and the G20.

“But many developing countries lack the means to fight the pandemic, and to invest in recovery,” added Guterres.

He underscored that the meeting is asking for immediate, collective action in six critically important areas including global liquidity.

“A rush to safety has triggered an outflow of capital from some key emerging economies. Many other countries have seen their fiscal space reduced by the virtual standstill of economic activity, preventing them from being able to import essential medical supplies.

“This is where the health crisis meets the economic crisis, in a dangerous nexus that could prolong and deepen both,” said the UN Secretary General who argued that existing mechanisms are stretched to capacity, and the resources of the IMF may not be enough.

Guterres further argued that the widespread debt crises will set back the response to COVID-19 and impede sustainable development for many years to come.

“I recently had the opportunity to visit several Caribbean and Pacific islands – middle-income countries that have made steady economic progress, despite being on the frontlines of the climate crisis.  Thanks to early and decisive action, they have largely been spared the health impact of COVID-19.  But many are heavily indebted, and their economies are now in free fall.

“Small island states rely heavily on tourism and remittances. Both are now at a standstill. Households that had a secure income are at imminent risk of poverty and hunger. Many developing and even middle-income countries are highly vulnerable and already in debt distress – or will soon become so, due to the global recession,” warned Guterres  

He argued that alleviating crushing debt cannot be limited to the least developed countries and should be extended to all developing and middle-income countries that request forbearance as they lose access to financial markets.

“COVID-19 has exposed and is exacerbating deep inequalities and injustices that we must tackle – including gender inequality. The economic impacts are worse for women, who typically have fewer savings and lower incomes than men.

All our efforts must go towards building sustainable and resilient pathways that enable us not only to beat COVID-19, but to tackle the climate crisis, reduce inequality and eradicate poverty and hunger,” declared Guterres

Arthur Hall


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