WASHINGTON (The Southern African Times) – U.N. officials said they will meet on Thursday with over a dozen world leaders to discuss shoring up financial support for emerging economies, hit hard by the pandemic’s economic fallout.
The online meeting comes amid surging coronavirus infections in developing countries and warnings it will cost more than the initially forecast $2.5 trillion (2 trillion pounds) for them to weather the crisis. It was convened by Canada, Jamaica and United Nations Secretary-General Antonio Guterres.
U.N. Deputy Secretary-General Amina Mohammed said many developing countries, including middle-income nations, lacked sufficient funds to fight the pandemic and invest in recovery.
“Work is going on. But it is not urgent enough,” she told reporters in an online briefing.
Mohammed said an offer by the Group of 20 major economies and Paris Club creditors to suspend payments on official bilateral debt for the poorest countries through the end of 2020 was a critical start, but further efforts would be needed.
Of 77 eligible countries, only 22 have formally requested forbearance so far. Others have expressed concern it could harm their longer-term ability to borrow money.
Thursday’s meeting will include participants from the International Monetary Fund, World Bank, African Union, Institute of International Finance and the Organization for Economic Cooperation and Development (OCED). The goal is to deliver concrete proposals in eight weeks, Mohammed said.
A draft concept paper for the meeting seen by Reuters called for the IMF to boost global liquidity by issuing a new allocation of its Special Drawing Rights currency, a move that has been opposed by Washington.
It also backs an across-the-board debt standstill for all developing countries that request forbearance – not just the ones covered by the G20 debt suspension – and calls for proactive solutions by private-sector creditors to avoid the even higher cost of a “disorderly wave of defaults.”