A growing number of countries are or may soon be facing staggering debt crises due to the coronavirus pandemic, the head of the United Nations’s top economic body warned on Tuesday.
Mona Juul, Norway’s U.N. ambassador and president of the 54-nation U.N. Economic and Social Council, called for stronger measures to fight the devastating economic consequences of the global health crisis, according to the Associated Press.
Member nations in the Group of 20, which include the world’s 20 major economies, have frozen debt service payments for some of the world’s poorest nations through the end of 2020.
That will freeze up an estimated $11 billion in debt for eligible countries, but governments that qualify for the moratorium will still have an additional $20 billion in multilateral and commercial debt due this year. More needs to be done, Juul said during a meeting on coronavirus recovery financing.
“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 on debt payments is extended for another year.
Amina J. Mohammed, the U.N.’s second-in-command, said the financing necessary to close fiscal gaps would have to be tailored to individual countries.
As industrial sectors come to a screeching halt, supply chains have collapsed and put government officials — already scrambling to address health needs — under the additional burden of addressing rising unemployment.
“By all measures, we are in a recession of unparalleled proportions,” Mohammed said Tuesday. “Financing on an unprecedented scale is essential to an effective response.”