GENEVA, 11/21 (IPS) – In a time of profound challenges for international relations, it is the end of the G20 meeting that gives leaders a sense of relief that the meeting has gone so smoothly. easy to understand. The leaders are also justifiably proud of the significant strides they have made, including the launch of a new pandemic fund.
But G20 leaders have failed to address the financial crisis that threatens many low- and middle-income countries and threatens to undermine global health security as it is causing countries to suffer. reduce investment in essential health services.
As the world nears the end of 2022, neither the IMF nor the G20 have established a suitable resolution mechanism for the debt crisis. In 24 months, the “G20 common framework” put in place a debt relief agreement for just one country, Chad.
UNAIDS report”Pandemic trio“shows that the growing debt burden in developing countries is undermining their ability to fight and end AIDS and COVID and their readiness for future pandemics. Half of the low-income countries in Africa are already heavily indebted or at high risk of becoming indebted.
Around the world, the 73 countries eligible for the Debt Service Suspension Initiative have been recorded as spending an average of four times more on debt repayments than they can invest in their health. citizen. Only 43 of those countries even had a temporary suspension – less than 10% of what they went on to pay in total.
Two-thirds of people living with HIV live in countries that receive absolutely no support from the Debt Service Suspension Initiative during the critical period 2020-2021. The seven Debt Service Suspension Initiative eligible countries with the largest numbers of people living with HIV – Kenya, Malawi, Mozambique, Uganda, Tanzania and Zambia – saw their public debt levels rise from 29% 2011 to 74% by 2020.
According to the World Bank, “interest payments will limit the ability of low-income countries to spend on health by 7 percent on average and 10 percent in lower-middle-income countries. % in 2027.”
110 out of 177 countries will see a drop or stagnation in health spending and may not reach pre-COVID levels by 2027.
During the COVID-19 pandemic, deficits widened worldwide and debt accumulated much faster than in the early years of other recessions including the Great Recession and the Global Financial Crisis. The scale can only be compared with the two world wars of the twentieth century.
Government spending cuts are expected across 139 countries in the coming years. In the case of 73 countries that qualify for the Debt Service Suspension Initiative, core spending is expected to fall by an average of 2.8% of GDP between 2020 and 2026.
This comes at a time when economic forecasts have been downgraded by IMF fourth time in a year. Austerity would mean dangerously reducing health spending. Even limiting the damage will require a systematic realignment of public resources towards health systems.
There is a direct correlation between deepening financial problems and deteriorating health.
The COVID-19 crisis is protracted. The effects of the war in Ukraine on the global economy are making things worse. The HIV response is in jeopardy, with the promise of ending AIDS by 2030 under threat.
Today, the world is not prepared for the upcoming pandemics. The international response to the health financing crisis is not yet close enough. Even as developing countries grapple with debt crises, the Ukraine war has prompted some donors to cut aid.
But there is a way out. With bold action, the health and development financial crisis can be overcome. Barbados Prime Minister Mia Mottley Bridgetown Agenda For debt action, multilateral financing and effective SDR reallocation set the order of magnitude of response required.
There is an urgent need for debt forgiveness for countries experiencing fiscal difficulties, and an efficient and rapid mechanism to deal with large-scale debt restructuring. Health and education should be key considerations in debt negotiations.
It is also important to expand the use of existing Special Drawing Rights (SDRs) from high-income countries to invest in low-income countries at least twice the amount of 100 billion pledged. conclude.
The work of the G20 leaders is not over in Bali. The consequences of an unresolved debt crisis and lack of additional resources would be catastrophic for lives, livelihoods and health security. We don’t have time. No one is safe until everyone is safe.
Jaime Atienza is the Director of Equity Finance at UNAIDS. Charles Birungi is a Senior Advisor on HIV Economics, Finance and Policy.
IPS UN Office
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