LONDON (The Guardian) - Head of the UN Development Program Achim Steiner has warned that more than 50 of the poorest developing countries are in danger of defaulting on their debt and becoming effectively bankrupt unless the rich world offers urgent assistance.
Inflation, the energy crisis and rising interest rates are creating conditions where an increasing number of countries are in danger of default, with potentially disastrous impacts on their people, according to the UN’s global development chief.
“There are currently 54 countries on our list of those likely to default 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,” Steiner said.
Speaking at the Cop27 UN climate summit, Steiner said any such default would create further problems for solving the climate crisis. “It certainly will not help [climate] action,” he said.
Without measures to help them with debt, he warned, poor countries could not get to grips with the climate crisis.
“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,” he said.
The climate crisis is further compounding the problem, he warned, as countries are facing increasing effects from extreme weather. Poor countries are not receiving the funding they were promised from the rich world, yet are facing a growing danger of storms, floods, droughts and heatwaves.
Steiner warned that some developing countries were in danger of giving up on the UN climate talks if developed country governments failed to fulfil a longstanding promise to poor nations of $100bn (£86bn) a year in assistance, to help them cut greenhouse gas emissions and adapt to the impacts of extreme weather.
He predicted that there would be no final settlement at Cop27 of how a funding mechanism for loss and damage could work, but said countries meeting in Egypt, where the talks are now almost at the halfway mark, should be able to make substantial progress.
On Thursday, the theme of discussions at the talks was science, and youth and future generations. Hundreds of youth activists attended to demonstrate their support for climate action, but the protests were muted as the Egyptian government has kept a tight rein on demonstrations outside the talks. Some civil society groups have reported concerns over intimidation and monitoring.
No such restrictions have been placed on lobbying within the halls, however – a coalition of NGOs revealed on Thursday that more than 600 fossil fuel lobbyists were among those attending, a far higher number than in previous years.