Over 50 Developing Countries Face Threat of Bankruptcy, Says UN Official
Administrator of the United Nations Development Programme, Achim Steiner, speaks during an interview at the Development Programme Headquarters on September 2, 2022 in New York.
Although global warming is the main concern at the 2022 United Nations Climate Change Conference (COP27), the resolution of the climate crisis is connected to other issues, such as global economical development. This raises concerns over the present economic state of the world’s most vulnerable regions.The West should urgently offer financial assistance to 54 of the poorest developing countries, which otherwise are at risk of defaulting on their debt – in effect falling into bankruptcy – said Achim Steiner, the UN’s global development chief.
“There are at present 54 countries on our list [of those in danger of defaulting] and if we have more shocks – interest rates go up further, borrowing becomes more expensive, energy prices, food prices – it becomes almost inevitable that we will see a number of these economies unable to pay,” the official said at the COP27 conference.
The economic wellfare of the poorest nations is also endangered by the disastrous effects of climate change, Steiner noted. According to him, although the rich world promised financial help aimed at mitigating these effects, the troubled regions are not receiving it.He recalled that developed countries failed to keep a promise of providing $100Bln annual help for poorer states that are the least responsible for climate change but tend to suffer the most from its consequences.Steiner emphasized that developing nations already contribute to climate action, which proves that the idea it is only the West that is asked to finance a solution to the problem is a fallacy.”China, India, countries such as Kenya, South Africa, Ghana, Morocco, Egypt – they’re all investing their own resources in moving towards clean energy transitions. Never mind the extraordinary resources they have to mobilise when a climate-related extreme weather event hits,” he said.Simultaneously, developing countries at risk of defaults is a serious setback for climate action. The statements from the UN Development Program head about the causes of the growing default risks echo the words of African leaders, who earlier pointed out that their region suffers from inadequate financial policies of foreign countries and biased investment ratings that lead to higher interest rates.“The issue of debt has now become such a big problem for so many developing economies that dealing with the debt crisis becomes a precondition for actually accelerating climate action,” Steiner noted.One of the central issues at this year’s UN Climate Change conference is the so-called “loss and damage”, referring to the destructive consequences of the climate crisis that countries, many of which are in Africa, face and are unable to tackle on their own. At COP27, some of the industrialised countries have agreed to offer financial loss and damage help to those in need.Although Steiner believes that no final settlement concerning a loss and damage funding mechanism will be achieved at the conference, in his opinion some substantial progress is to be made during the Sharm el-Sheikh talks.
