The Daily Herald – CARICOM SG: Debt reduction must be part of the post-COVID-19 response

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CARICOM Secretary General Carla Barnett addresses UNCTAD XV.

GEORGETOWN, Guyana – An effective response to the post-COVID-19 economic situation must include significant and broad debt reduction for all developing countries, including vulnerable middle- to high-income states. This was one of the prescriptions put forward by CARICOM Secretary General of the Caribbean Community (SG) Carla Barnett as she participated in a panel discussion at the World Leaders Summit Dialogue on Inequalities at the XVth Conference. United Nations Trade and Development Conference (UNCTAD) in Barbados on Tuesday, October 5.

Speaking on the topic of the discussion “Is the COVID-19 crisis really a game changer?” Dr Barnett further said debt reduction should specifically focus on debt accumulated due to COVID-19-related spending and climate change adaptation.

The CARICOM SG said the meeting provided an opportunity to highlight to the global community the issues and concerns of small island states and lowland coastal states (SIDS) as well as identify some of the measures that could be taken by the international community to support efforts to build resilience and promote sustainable development among SIDS. She pointed out that SIDS experienced a contraction in gross domestic product (GDP) in 2020 to about three times the global rate.

“We have used funds budgeted for other purposes to meet the needs of the health sector for [personal protective equipment – Ed.] PPE, medical equipment, test supplies and vaccines. We transferred funds to cover basic social safety nets. We have reallocated loans and borrowed additional funds. The already high debt burden has increased even further, ”said Dr Barnett.

Mr Barnett said that while the G-20 Debt Service Suspension Initiative (DSSI), which allowed developing countries to temporarily suspend debt service payments to their official bilateral creditors, had potential , it did not cover all middle- to high-income developing countries. , many of which are SIDS.

“The new debt resulting from the need to deal with the COVID-19 crisis as well as the stock of existing debt will continue to appropriate a significant proportion of public resources in the repayment of the debt, while strangling investments. public infrastructure needed for economic rehabilitation, ”said the SG in advocating for debt reduction.

The situation was even more difficult for many SIDS as they cannot access financing from multilateral and bilateral concessional aid due to their relatively high per capita income status.

“With the reality of our vulnerabilities exposed by the COVID and climate crises, the call for a more appropriate basis to determine access to concessional finance takes on great urgency. We must continue to push for the continued development and acceptance of the Multidimensional Vulnerability Index (MVI). The issue of access to concessional resources for development finance and resilience building remains an important priority for CARICOM States, and indeed for all SIDS, ”said Dr Barnett.

She called on the United Nations system to intensify collaboration with relevant regional institutions, particularly in the Caribbean, the Pacific and the Indian Ocean, in order to make this index a reality. She also called on the International Monetary Fund (IMF), the World Bank and bilateral and multilateral development partners to move away from the “blinders of GDP per capita”. GDP per capita cannot be a measure of development, let alone sustainable development, she added.

Mr Barnett said new policy options to help developing countries had to be crafted as the traditional political menu of international financial institutions did not sufficiently take into account the inherent vulnerabilities and weaknesses of these countries. “This policy menu will certainly be inadequate as a foundation for designing stimulus models that can build transformative and resilient economies in the face of global climate change,” she said.

Ahead of COP 26, the United Nations Climate Change Conference scheduled for next month in Glasgow, Scotland, the CARICOM SG said that for SIDS like CARICOM, “1.5 to stay in life “was more than a catchy slogan,” it is an existential reality. “

“We must therefore focus on pushing the COP26 to be decisive in order to maintain the paths towards achieving the objectives of the Paris Agreement and translating the commitments into concrete actions on the ground”, underlined Dr Barnett. .

She spoke in particular of the pledges made to the Green Climate and Adaptation Funds, which she insisted must be honored and scaled up to ensure that the most vulnerable can adapt and survive the effects of climate change. .

The four days of UNCTAD XV end today, Thursday.


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