This archive report was first published on 28 April 2020.
On April 28, 2020, the United Nations Conference on Trade and Development (UNCTAD) called for the writing off of nearly $1 trillion in debts owed by developing countries across the world. The move aims to cushion these countries from the devastating effects of the global COVID-19 pandemic.
According to UNCTAD, 64 low-income countries are currently spending more on debt service than their health systems. This is a concerning trend, especially during a time of record global downturn, declining oil and commodity prices, and weakening local currencies.
UNCTAD estimates that the countries' liquidity and financing requirements as a result of the pandemic amount to at least $2.5 trillion. High-income developing countries have debt service obligations of between $2 to $2.3 trillion in 2020 and 2021 alone, while middle and low-income countries have debt service obligations of $700 billion to $1.1 trillion.
The agency recommends that an independent debt authority oversee the debt write-off process, rather than the International Monetary Fund (IMF) and World Bank, which are among developing countries' leading creditors and may not be objective.
Already, officials from the G20 countries have announced plans to suspend both principal repayments and interest payments on loans for the world's poorest countries, a waiver that will last up to the end of the year.
