WASHINGTON: The United Nations Organisation (UNO) , this week, called for the expanded debt relief to all the requesting developing countries. It also called for more equitable COVID-19 vaccinations to tackle the ongoing COVID-19 pandemic. Achim Steiner, Administrator, United Nations Development Programme (UNDP) said on the behalf of the UN that to avoid a development crisis, the world must avoid a debt crisis.
Steiner also said that 84 per cent of the COVID-19 vaccines that have been administered so far have been provided to the wealthier countries and also urged some swift measures to address the gaps in vaccine funding and boost the production of poor countries. He added that lesser developed countries have spent almost 580 times less in the per capita terms in comparison to the advanced economies.
The UN has appealed the stakeholders to offer the legal and technical advice on the options of debt and debt relief to include the vulnerable countries on case-by-cases basis. He also added to consider other mechanisms which would allow the countries to access debt relief without risking their credit ratings. A new report by UNDP suggests that only one-third of the indebted and vulnerable economies are ineligible for debt relief measures. Additionally, 60 per cent of all the developing and vulnerable countries are highly debt vulnerable.
The report estimates that the strings of default are not the most significant threat but the possibility of a prolonged debt crisis that leaves these countries with crushing debt crisis burden for years. This burden also prevents the countries from making critical investments to benefit their own people and address the climate crisis. The International Monetary Fund (IMF) and World Bank are urging the member countries to keep up the fiscal support for the poor and vulnerable citizens until the pandemic is over. The IF has also proposed for a new allocation of $650 billion in “Special Drawing Rights” which would provide funds to poor countries as international grants.