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((PLAYBOOK SLUG: G20 Developing Nations Debt
HEADLINE: Poorer Nations Face ‘Lost Decade’ Over COVID-19 Debt Crisis, UN Warns
TEASER: Total global debt reaches highest level in 50 years as cost of borrowing soars
PUBLISHED AT: 2/16/2022 at
BYLINE: Henry Ridgwell
CONTRIBUTOR:
DATELINE: London
VIDEOGRAPHER: Henry Ridgwell
VIDEO EDITOR:
SCRIPT EDITORS: Reifenrath, Page
VIDEO SOURCE (S): AFP, Reuters, APTN, Teams
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TYPE: VPKGF
EDITOR NOTES ((EDITORS PLEASE NOTE – Henry will file this piece Thursday))
((INTRO))
[[Finance ministers from the Group of 20 industrialized nations begin a two-day meeting in Jakarta, Indonesia, Thursday, amid a growing debt crisis. The coronavirus pandemic has seen many poorer countries build up large debts — and campaigners say it is undermining their ability to provide basic services like health care and education. In an interview with VOA, the secretary-general of the United Nations’ Conference on Trade and Development warned that creditor nations must take urgent action to avoid a "lost decade" in the developing world.]]
((VIDEO: AGENCY FOOTAGE OF SRI LANKA))
Sri Lanka’s golden beaches normally attract millions of tourists. But that source of income was cut off by the pandemic. Its economy is suffering. Bond ratings have been downgraded — and economists fear it could soon default.
((VIDEO: AGENCY FOOTAGE OF LEBANON, ARGENTINA BANKS))
It’s not alone. The coronavirus pandemic has driven total global debt to its highest level in more than half a century, according to the World Bank.
Debt levels were already high, but the pandemic has hit developing nations hard, according to Rebeca Grynspan, secretary-general of the United Nations Conference on Trade and Development, in an interview with VOA.
((Rebeca Grynspan, UNCTAD Secretary-General))
“You have them building up their debt and their export earnings not being enough to pay for their debt load. So, this situation is really dramatic already for many of these countries.”
((VIDEO: AGENCY FOOTAGE OF ETHIOPIA, TUNISIA STREET SCENES))
Figures from the International Monetary Fund show Ethiopia, Tunisia, Argentina, El Salvador, Ghana, Republic of Congo, Tajikistan and Mozambique are also at high risk of default.
((VIDEO: AGENCY FOOTAGE OF VENEZUELA, ZAMBIA))
Lebanon, Suriname, Venezuela and Zambia have already defaulted on their sovereign debt.
Many developing nations took out loans during the pandemic. They now face big repayments, estimated by the World Bank at 35 billion dollars in 2022 — an increase of 45 percent on the previous year — with almost half owed to China. Meanwhile, economic growth forecasts have been cut.
((Rebeca Grynspan, UNCTAD Secretary-General))
“For the first time, the rate of growth of the developing countries is less than the rate of growth of the developed countries, so in terms of the sustainability of this debt burden, we have where we are in a very high-risk space.”
((VIDEO: AGENCY FOOTAGE OF G20 MEETING))
The Group of 20 leading rich and developing nations froze some debt repayments during the pandemic.
((Rebeca Grynspan, UNCTAD Secretary-General))
“It is in the right direction, but it has two problems. One is that it's a suspension, so the countries will have to start pay in June this year while the crisis is not over. And secondly that the impact in terms of debt servicing with respect to the total debt servicing of the developing countries is very, very small.”
((VIDEO: AGENCY FOOTAGE OF ZAMBIA CENTRAL BANK))
The G-20 has also proposed a debt reduction program — but so far only three countries have come forward for help.
((Rebeca Grynspan, UNCTAD Secretary-General))
“Many countries don't want to come in because they will be punished by the markets, and if they are punished by the markets, their access to a private bond and the possibility of going to the markets to finance themselves will be really hindered.”
((VIDEO: AGENCY FOOTAGE OF U.S. FEDERAL RESERVE, THEN EU CENTRAL BANK))
The warnings of a debt crisis come as borrowing costs rise sharply — with central banks ramping up interest rates to tackle inflation. Grynspan says creditor nations must take urgent action on debt relief and financial aid. The alternative, she warns, is a "lost decade" for developing countries.
((Henry Ridgwell, for VOA News, London.)
NewsML Media TopicsArts, Culture, Entertainment and Media
NetworkVOA
Embargo DateFebruary 17, 2022 11:42 EST
BylineHenry Ridgwell
Brand / Language ServiceVoice of America - English
