United Nations Secretary General António Guterres has urged for decisive action to stave off debt crisis in developing world. A policy brief issued by the UN Chief on Monday said that the steps taken to prevent debt crises across the world sparked by the COVID-19 crisis have not been sufficient to restore economic stability in many developing countries. 

Our Correspondent reports, according to the policy brief, 42 economies borrowing from capital markets have experienced sovereign downgrades since the start of the pandemic. Sovereign downgrades cause borrowing costs to rise, especially for developing countries, which can, in turn, increase the risk of more countries tipping over into unsustainable debt – especially if the COVID-19 pandemic is more protracted and deeper than expected. 

The policy brief highlighted the need for debt relief to create space for investments in recovery and for achieving the  Sustainable Development Goals. The Secretary-General also urged governments to provide fresh concessional financing for developing countries, especially least developed countries and small island developing States, recapitalize multilateral development banks and accelerate the timetable for replenishing the funds, meet official development assistance (ODA) commitments and provide long-term financing to developing countries for investment in long-term growth.