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UN Calls for Urgent Action to Aid Countries Near 'Debt Distress' From COVID-19

UN Calls for Urgent Action to Aid Countries Near 'Debt Distress' From COVID-19

Wednesday, 3 June, 2020 - 05:30
A general view of a display with the latest information on the spread of the novel coronavirus worldwide during a government crisis meeting in Berlin, Germany, February 28, 2020. REUTERS/Annegret Hilse
Asharq Al-Awsat

Head the UN Economic and Social Council stressed the need for a quick action Tuesday to help the growing number of countries already facing or at risk of “debt distress” because of the economic impact of the coronavirus pandemic.

Norway’s UN ambassador, Mona Juul, head of the 54-nation UN body, said while addressing a meeting on financing and recovery for the crisis that the decision by the world’s 20 major economic powers to freeze debt service payments for the world’s poorest countries through the end of the year isn’t enough.

Juul stressed that the Group of 20’s freeze will free about $11 billion until the end of the year, but it’s estimated that eligible countries have an additional $20 billion in multilateral and commercial debt combined coming due in 2020.

According to Juul, even if the moratorium is extended to 2021, “many countries will have to make difficult choices between servicing their debt, fighting the pandemic and investing in recovery.”

For his part, Eric LeCompte, executive director of Jubilee USA Network, an alliance of more than 75 US organizations and 700 faith communities working for debt relief, was sharply critical of the resistance of private creditors, commercial lenders and banks to participate in debt relief calls — despite calls by the G-20, International Monetary Fund, World Bank and United States, the Associated Press reported.

“Because of the enormity of this crisis and the long-term challenges the markets could face, the fact that some private and commercial creditor blocks are not participating ... baffles the mind,” he told the virtual meeting.

LeCompte said the UN Security Council must act “given that this crisis could devastate all of us, poor countries and the markets.”

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