Trudeau co-hosts meeting of world leaders as UN warns of looming global debt crisis

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Trudeau co-hosts meeting of world leaders as UN warns of looming global debt crisis


Prime Minister Justin Trudeau is meeting virtually with world leaders this morning to discuss what the United Nations is calling a looming debt crisis that threatens to stifle economic recovery in less developed countries.
The UN says the world must take action to help governments in low-income countries access liquidity and ease their debt burdens – or risk an uneven global recovery.

“As the world reaches the first anniversary of the COVID-19 pandemic, insufficient global solidarity among countries now threatens to leave entire regions behind,” the UN said in a press release.

“While some countries have been able to accumulate new debt to build a bridge to recovery and reserve vaccines, others have been forced to allocate their limited fiscal space to service their debts, rather than supporting their populations. ”

The UN says six developing countries have already defaulted on their debt since the start of the pandemic, while 42 others have seen their credit scores downgraded during that time. At least 120 million people have fallen into extreme poverty, according to the agency.

Trudeau summoned the virtual alongside UN Secretary General António Guterres and Jamaican Prime Minister Andrew Holness. Representatives of several countries participate, as well as heads of institutions such as the International Monetary Fund, the World Bank, the World Trade Organization and the Organization for Economic Co-operation and Development.

The meeting began at 10 a.m.ET and is being posted on the United Nations website.

The three hosts will hold a press conference after the meeting. CBC News will broadcast it live.

UN chief warns of “a lost decade for development”

In his opening remarks, Guiterres said that US $ 16 trillion in spending by rich countries on emergency support programs had helped them avoid a downward economic spiral. But the least developed countries spent 580 times less per capita on measures to support their populations, he said.

Guiterres also warned that an impending budget crisis in many countries threatened progress on the UN’s sustainable development goals and on the Paris agreement on climate change.

“We face the specter of a divided world and a lost decade for development,” Guiterres said.

Guterres called for a moratorium on debt payments, targeted debt relief and reforms to the international debt architecture to provide increased support to countries in need.

He said a G20 initiative that provides for a temporary suspension of debt service payments owed by poorer countries to richer countries is expected to be extended from June 2021 to 2022. He also called for its extension to that heavily indebted middle-income countries are also eligible.

United Nations Secretary-General António Guterres calls on the global community to support low- and middle-income countries with high public debt. (Salvatore Di Nolfi / Keystone / The Associated Press)

Jamaican Prime Minister Holness has warned that an inequitable global COVID-19 vaccination program will lead to an uneven global recovery and deepening poverty.

“Unless we are ready to enter into deeper cooperation with a fairer, smarter and broader vision of our world and our common interests, we should temper our expectations that the crisis is coming to an end,” Holness said.

Trudeau said the meeting comes at a “watershed moment” and that the top priority of the global community should be to vaccinate as many people as possible as quickly as possible.

At the same time, Trudeau said, countries should focus on reforming economic systems to better address global challenges such as poverty, inequality and climate change.

“This pandemic has exposed gaps and inequalities in our economies and in our societies,” Trudeau said.

“We need to translate the commitment to build back better into real action that makes a real difference in the lives of people, no matter where they live.

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