UNITED NATIONS, Mar 29 (APP):The President of UN Economic and Social Council (ECOSOC), Pakistan’s Ambassador Munir Akram, has called for the extension of Group of 20’s (industrialized countries) Debt Suspension Initiative ( DSSI) beyond June to enable developing countries recover from the devastation left behind by the deadly coronavirus pandemic.
Speaking at a virtual High-Level Meeting on International Debt Architecture and Liquidity, he also recommended expansion of the G20’s move to cover the most vulnerable countries, including some of the small island developing countries.
The meeting has been convened jointly by UN Secretary-General Antonio Guterres, Jamaican Prime Minister Andrew Holness, and Canadian Prime Minister Justin Trudeau.
The virtual meeting followed-up on a series of meetings since last year to mobilize action to assist the economic recovery from the pandemic.
In April 2020, Pakistan Prime Minister Imran Khan was the first leader to call for urgent debt relief, and the suspension of debt by G20 brought some “breathing space” to the developing countries.
In his remarks Ambassador Akram emphasized that several possible mechanisms for debt relief and restructuring including debt deferral, debt buyout, and debt swaps — which have been identified — should be implemented, with the participation of private creditors, who hold the vast majority of developing country.
“To ensure sustainable management of developing country debt, it is also essential to review and update the global debt architecture, and various proposals have been put forward including the possibility of creation of a public global rating agency,” the ECOSOC chief said.
He also welcomed an indication by the International Monetary Fund chief to present a formal proposal by June for a new SDR (Special Drawing Rights) allocation of $650 billion and also to examine the options to reallocate SDRs to support vulnerable and low income countries
“The IMF now has ample ‘firepower’ to expand its emergency and recovery support to the developing countries,” the ECOSOC chief said, adding that the Multilateral Development Banks, especially the World Bank, were also in a position to expand their emergency lending.
The creation of a Liquidity and Sustainability Facility to lower interest rates on loans to developing countries, as proposed by the Economic Commission for Africa, would be an important instrument to expand developing countries’ access to market capital, Ambassador Akram said.
To ensure transition to a sustainable growth model, he called on the developed countries to fulfill their promise to mobilize $100 billion annually in climate finance.
“It is also vital to find ways to access the $378 trillion held in private capital to mobilize at least $1 trillion annually -in sustainable infrastructure investment. Without sustainable infrastructure, we will not be able to achieve either the SDGs or the climate goals.”
Pointing out that an estimated $178 billion flowed out of the developing countries last year to the developed countries, Ambassador Akram called for specific steps to halt and reverse this bleeding of resources from developing countries.