Don961: The world is awaiting a debt deal to prevent an economic disaster … $ 3.4 trillion in payments by developing countries to their debt
Yassin Iraq: Baghdad
The issue of “life or debt”, this is what the United Nations arm for trade and development said in its own way when he put in place “urgent and necessary measures” to ward off the debt disaster looming on the horizon of developing countries suffering the economic repercussions of the Corona virus.
Developing countries now face a wall of debt service payment throughout the decade of the decade. In 2020 and 2021 alone, the amounts paid out of public external debt were estimated at $ 3.4 trillion – ranging from $ 2 trillion to $ 2.3 trillion in high-income developing countries and between $ 666 billion and $ 1.06 trillion in middle-income and low-income countries.
The United Nations Trade and Development Organization (UNCTAD) has identified 20 countries in the world in which the ratio of external public debt service has risen to higher rates, compared to government revenues. Four Arab and three European countries have emerged from these twenty countries.
Yesterday, the United Nations Organization for Trade and Development (UNCTAD) issued a 16-page summary report calling for “concluding a global debt deal for the developing world”, stressing “the vital need to take decisive measures to provide significant debt relief to developing countries and free much-needed resources.” To address the epidemic. ”
The organization valued the G20 leaders ’declaration on April 15th of this year to suspend debt service payments to 73 of the poorest countries in the period from May to the end of this year. However, she said, “There is an urgent need to write off the debts of developing countries in all areas.” She noted that “the cancellation of a trillion dollars will be closer to the number necessary to prevent an economic catastrophe throughout the developing world.”
The organization says that in 2020 and 2021 alone, payments by developing countries to their public external debt will rise to between $ 2.6 and $ 3.4 trillion, and that calls for international solidarity have so far provided little or no tangible support. “There is a need to establish an international body to oversee the programs of developing countries to reduce the debt burden,” she said.
Three weeks before March, UNCTAD called for the creation of what it called a “Corona Virus Crisis Package” worth $ 2.5 trillion for developing countries, saying that even before the Corona crisis, many developing countries faced high and rising shares of their government revenues that went To pay off debts, which puts pressure on their health and social expenses.
“The international community must urgently take further steps to relieve the increasing financial pressures of debt payments imposed on developing countries as it grapples with the economic shock caused by the Corona virus pandemic,” UN Secretary-General told UNCTAD.
The Corona virus afflicts developing economies at a time when they have already been suffering for many years from unsustainable debt burdens, as well as high health and economic needs.
Among the Arab countries, Djibouti ranked first in the world in the ratio of servicing its public external debt – guaranteed by the government – to government revenues. The proportion rose from a mere 9 percent in 2012 to 62 percent in 2018 (the latest available statistic), outperforming second-placed Venezuela. In other words, for every $ 100 that enters as government revenue to Djibouti, $ 62 goes to external debt service.
Then comes Lebanon, which ranked second in the Arab world and the third in the world, where the proportion of its public external debt service was characterized by constant stability, or from 39.5% in 2012 to 41% in 2018.
Mauritania ranked third in the Arab world – 12 globally – with its debt service ratio doubling between 2012 and 2018, or from 9.5% to 21%.
However, Tunisia – the fourth in the Arab world and the eighteenth in the world – managed to reduce the proportion of its external debt service by 1.5 percentage points between 2012 and 2018, or from about 19.5 per cent to 18 per cent.
Globally, Venezuela, which suffers from international sanctions, especially from the extreme pressure exerted by the United States, ranked second with 45 percent of its external debt service in 2018, compared to just 7 percent in 2018.
Three European countries appeared on the list: Montenegro is in sixth place, with debt service amounting to 30.5% in 2018, Belarus in 15th with debt servicing 19%, and Albania in 19th with about 18%.
Sri Lanka came fourth with debt servicing of 38.5% in 2018, then Angola – fifth with about 31% in 2018 – Ghana in seventh place with 26%, then Costa Rica with 25.5%, Laos with 23%, Gabon with 22% 9%, Mongolia ranked 11th globally, at 22.5%.
Jamaica reduced its rank 13th in the world in the service of its debt service from about 29% in 2012 to 21% in 2018. Then came the Maldives by 20.1%, then Ethiopia in the 16th place by about 19%, then El Salvador with 18.5%. , And the Dominican, in 20th, with 17 percent.
Richard Kuzul Wright, Director of the UNCTAD Globalization division who released the report, said that the financial turmoil caused by the Corona crisis has led to record inflows of portfolio capital from emerging economies and a sharp decline in the value of the currency in developing countries, which has made debt servicing More hard.
He added, “The recent calls for international solidarity point to a point in the right direction, but so far it has provided little concrete support to developing countries and it addresses the direct effects of the epidemic and its economic repercussions.”
UNCTAD identified three main steps to translate calls into action, the first of which is the “automatic temporary freeze” that will provide a total economic outlet for all developing countries stricken by crises that require a tolerance to free resources, usually devoted to servicing foreign sovereign debt.
The move says that the freezes, if they are long and comprehensive enough, will facilitate an effective response to the Corona Virus shock by increasing health and social spending in the near future, and allow post-crisis economic recovery along the paths of sustainable growth, finance, and balance. Commercial.
The second step was “debt relief and restructuring programs”. These programs would ensure that a “breathing space” gained from the framework of the first step is re-evaluated for the long-term debt sustainability of developing countries, on a case-by-case basis.
On April 13th, the International Monetary Fund canceled the debt owed by the 25 poorest developing economies for the next six months. The debt cancellation is estimated at $ 215 million. On April 15th, G20 leaders announced the suspension of debt service payments to 73 of the poorest countries in the period from May to the end of this year.
The report says, however, that there is an urgent need to take more systematic, transparent and coordinated measures to write off the debts of developing countries in all areas, and pointed out that writing off a trillion dollars will be closer to the number needed to prevent an economic catastrophe across the developing world.
And the third step, “An International Debt Commission in Developing Countries”. To move forward with steps 1 and 2 forward, UNCTAD proposes the creation of an “International Debt Commission for Developing Countries (International Devolopank Country Depth Affirmative)” to oversee the developing countries ’debt implementation and lay the institutional and regulatory foundations for a more permanent international framework to guide future sovereign debt restructuring.
According to UNCTAD’s vision, the establishment of the body can be followed by the establishment of an independent international organization through an international treaty between the countries concerned. It is essential for any such international agreement to expedite the establishment of an expert advisory body that is completely independent of any creditor or debtor interests. LINK
Don961: Forbes reveals the countries with the most increase in the number of billionaires
Economy News _ Baghdad
“Forbes” magazine revealed that China, the United States and Russia led the world in terms of the increase in the number of billionaires during the past ten years
She stated that China ranked first on the list with 325 new billionaires appearing, bringing the total number to 389
She pointed out that in Hong Kong, the number of billionaires increased from 41 to 66, with this Chinese province ranked fifth in the ranking
In second place was the United States, where 210 billionaires appeared, bringing them to a total of 614
In third place, Germany came with 55 new billionaires, bringing their total to 107, while India ranked fourth with 53 new billionaires, bringing their total to 102
In Russia, 38 new billionaires appeared, bringing the total in the country to 99
Among the newly wealthy of Russia, the magazine focused on Tatyana Paklchuk, founder and director of the Wildberries online store, and the head of the “Russia Business” association Alexey Ribek LINK