The UN report “World of Debt” shows it clearly: public debt worldwide rose to a new record in 2022. Many countries are stuck in the debt trap.
According to the United Nations, 52 poorer countries are stuck in a debt trap that they can hardly overcome without help. UN Secretary-General António Guterres warned in New York on Wednesday (local time): “Half the world is sinking into a development disaster, driven by a devastating debt crisis.”
Guterres presented the UN report “World of Debt”. It shows that global public debt rose to a record $92 trillion in 2022. That is five times as much as in 2000. Poor countries account for a disproportionately high share. A good 40 percent of the world’s population, 3.3 billion people, live in countries where interest payments on loans exceed spending on health or education, it says.
Serve debt – or serve the people?
Borrowing is in itself a means to develop economies, for example to invest in health, education and jobs. However, when the sums are enormous and interest rates rise, governments can be in dire straits. “Some of the poorest countries in the world are being forced to choose between servicing the debt and serving their people,” Guterres said.
African countries paid four times as much interest as the US and eight times as much as rich European countries, Guterres said. In addition, many countries have borrowed more and more money from private lenders in recent years. The complicated procedure to restructure or possibly partially forgive debt.
There must be a functioning global security system to protect poorer countries from falling. They needed more ways to borrow money from public entities like development banks. Specifically, Guterres called for a mechanism to temporarily suspend interest payments, stretch debt and lower interest rates. It would also help if rich countries increased development aid and paid the promised money for climate adaptation.
The report comes from a working group dealing with the consequences of the global crises in food prices, energy and debt (UN Global Crisis Response Group on Food, Energy, and Finance – GCRG). Guterres launched it in March 2022.
Source: Stern
I have been working in the news industry for over 6 years, first as a reporter and now as an editor. I have covered politics extensively, and my work has appeared in major newspapers and online news outlets around the world. In addition to my writing, I also contribute regularly to 24 Hours World.
