UN Calls For Trillion Dollar Debt Jubilee For Poorest Countries

UN Calls For Trillion Dollar Debt Jubilee For Poorest Countries

by Tyler Durden  Thu, 04/23/2020 - 21:25

For weeks, the United Nations, International Monetary Fund, and World Bank have stated the only solution for emerging market economies severely damaged by the coronavirus outbreak is a "debt jubilee."

The United Nations Conference on Trade and Development (UNCTAD) published a note on Thursday morning that said about $1 trillion in debt owed by developing countries should be canceled to avoid an emerging market debt crisis.

"This is a world where defaults by developing nations on their debt is inevitable," warned Richard Kozul-Wright, director of UNCTAD's Division on Globalization and Development Strategies.

 UNCTAD's report calls for a global debt relief deal for emerging market economies. It indicates "the vital need for decisive action to provide substantive debt relief to developing countries to free up sorely needed resources to respond to the raging pandemic."

Last month, UNCTAD called for an international effort to create an economic relief package for emerging market economies that would amount to at least $2.5 trillion. It said even before the virus pandemic, many of these developing countries had insurmountable dollar debts.

"The international community should urgently take more steps to relieve the mounting financial pressure that debt payments are exerting on developing countries as they get to grips with the economic shock of COVID-19," said UNCTAD Secretary-General Mukhisa Kituyi.

Here are some of the countries that have unsustainable debt burdens:

UNCTAD said developing countries "now face a wall of debt service repayments throughout the 2020s. In 2020 and 2021 alone, repayments on their public external debt are estimated at nearly $3.4 trillion – between $2 trillion and $2.3 trillion in high-income developing countries and between $666 billion and $1.06 trillion in the middle- and low-income countries."

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