UN, Canada, Jamaica spearhead action to prevent debt crisis

UNITED NATIONS (AP) — The U.N. chief and the prime ministers of Canada and Jamaica urged far bolder action Monday to prevent a debt crisis, including extending the moratorium on debt repayments and providing urgent cash liquidity to developing countries to respond to the COVID-19 pandemic and invest in economic recovery.

Secretary-General Antonio Guterres said a debt crisis will have the greatest impact on the poorest people in the most vulnerable countries, but he warned that it can’t be confined to any region or country and that “there have been credible forecasts of losses of global output in the trillions of dollars.”

“Unfortunately, not enough has been done to support those countries -- many dozens of countries -- that are at highest risk,” he told reporters after a high-level virtual meeting with world leaders including prime ministers Justin Trudeau of Canada and Andrew Holness of Jamaica who joined the press conference virtually.

Guterres urged “far bolder steps” on a moratorium on debt payments, targeted debt relief and reforms to the international debt architecture.

Earlier this month, the Group of Seven leading industrial nations proposed bolstering the International Monetary Fund’s reserves for the first time since the 2009 financial crisis, so the Washington-based institution can provide more financial support to developing nations during the coronavirus crisis -- a move welcomed by Guterres, who has been pushing for increased liquidity for the past year.

Any increase in so-called special drawing rights will have to be signed off by other countries at the IMF’s spring meeting in April.

Stressing that the debt crisis is already “emerging,” Holness urged that the debt service suspension by the Group of 20 major economic powers, which has been extended through June, be further...