'A WORLD OF DEBT' REPORT - REPORT & INDICES

'A WORLD OF DEBT' REPORT - REPORT & INDICES

News: A world of debt | UNCTAD

 

What's in the news?

●       Recently, the United Nations Conference on Trade and Development released 'A World of Debt' report.

 

Key takeaways from the report:

  1. Global public debt (USD 92 trillion in 2022) increased by more than 5 fold since 2000.
  2. Debt increased faster in developing countries compared to developed countries over the last decade.

○       Almost 30% of global public debt is owed by developing countries.

  1. Half of developing countries devote more than 1.5% of its GDP and 6.9% of its government revenues for interest payments rather than on education or health.
  2. A growing number of countries are facing high levels of debt. Nearly 70 developing countries are there with public debt exceeding 60% of GDP.
  3. Developing countries face additional major challenges due to high levels of external public debt, which make them more vulnerable to external shocks.
  4. Developing countries are more exposed to external shocks due to borrowing in foreign currencies.
  5. Developing countries rely more on private creditors now, making credit more expensive and debt restructuring more complex.

 

Suggestions:

●       The United Nations has a road map of multilateral actions to address the global debt burden and achieve sustainable development.

●       The roadmap is laid out in Our Common Agenda Policy Brief on Reforms to the International Financial Architecture and the SDG Stimulus, which focuses on three areas of action:

○       Tackling the high cost of debt and rising risks of debt distress.

○       Massively scaling up affordable long-term financing for development.

○       Expanding contingency financing to countries in need.

●       The implementation of these actions is crucial to unleash the resources needed to build a more prosperous, inclusive, and sustainable world.