Pandemic: Guterres calls for debt relief for poor countries

UN Secretary General Antonio Guterres on Monday called on the international community to set up "

a new mechanism

" to relieve the debt of the poorest countries, weakened by the pandemic.

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He launched a "

call for urgent action

", in the context of "

the worst recession since the Great Depression

", at a high-level conference on financing for development held at the United Nations headquarters in New York. .

The G20 countries have spent nearly 16 trillion dollars to revive their economies, but the developing countries cannot do the same, he regretted during this event organized with Canada and Jamaica, in the presence of representatives of several dozen states.

“

Additional and targeted debt relief for vulnerable countries, including middle-income countries, will ultimately be needed,

” he said, calling for the creation of this “

new mechanism

”.

Mr. Guterres welcomed recent measures taken by the International Monetary Fund (IMF) and the G20, while calling for "

bolder and more ambitious

"

measures

.

Six countries in default of payment

The G20 debt suspension mechanism, which expires at the end of June, must be extended until 2022 and in particular offered to middle-income countries who want it, he pleaded.

The G20, a group of the 20 largest economies in the world, agreed on a common framework to restructure the debt of poor countries with a moratorium on interest payments as part of the “

Suspension of Service Initiative

”.

the debt

”.

"

We are on the verge of a debt crisis

," warned the secretary general, noting that "a

third of emerging economies are exposed to a high risk of fiscal crisis

".

In addition, six countries are in default, including Zambia and Lebanon, the latter for the first time in its history.

Earlier this month, G7 finance ministers backed new aid to underprivileged countries weakened by the pandemic, through the IMF.

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They were in favor of a new issue of special drawing rights (SDRs), the first since the financial crisis of 2009, to "

provide liquidity

" to the countries concerned.