A growing number of countries are or may face a dizzying debt crisis due to the coronavirus pandemic, warned the head of the main economic agency of the United Nations on Tuesday.
Mona Juul, United Nations Ambassador to Norway and president of the Economic and Social Council of 54 nations, called for tougher measures to tackle the devastating economic consequences of the global health crisis, according to the Associated Press.
Group of 20 member countries, which include the top 20 economies in the world, froze debt service payments to some of the world’s poorest countries until the end of 2020.
This will freeze an estimated $ 11 billion in debt for eligible countries, but governments eligible for the moratorium will still have $ 20 billion in multilateral and commercial debt to pay this year. More needs to be done, said Juul at a meeting to fund coronavirus recovery.
“Many countries will have to make difficult choices between servicing their debt, fighting the pandemic and investing in recovery,” she said, the AP reported, even if the suspension of payments from the debt is extended for one year.
Amina J. Mohammed, the UN’s second in command, said that the funding needed to fill budget gaps should be country-specific.
As the industrial sectors come to an abrupt halt, supply chains have collapsed and put civil servants – already struggling to meet health needs – under the added burden of tackling rising unemployment.
“By all means, we are in a recession of unprecedented magnitude,” said Mohammed on Tuesday. “Funding on an unprecedented scale is essential to an effective response.”