UNCTAD Current Affairs - 2020
The United Nations Conference on Trade and Development (UNCTAD) has announced that it is to cancel over 1 trillion USD of debt owed by developing countries.
According to the UNCTAD, over 64 low-income countries spend more on debts than their health systems. They are now struggling with growing debt burden to plummet prices of oil, weakening of local currencies and exports. On the other hand, they have COVID-19 crisis to address health issues.
According to UNCTAD, the high-income countries have debt obligations between 2 trillion USD and 2.3 trillion USD in 2020. The middle- and low-income countries have debt obligations between 700 billion USD and 1.1 trillion USD.
Similar steps were taken by the G20 countries as well. The G20 groupings agreed to suspend bilateral debt payments by the poorest countries of the world till the end of the year. The G20 grouping has called for “Global Debt Deal” that will grant one-year debt standstill. After one year, the developing world shall pay back the debt with interest.
Tags: COVID-19 • Debt • Economic Growth • G20 • Gobal Debt Deal
The United Nations Conference on Trade and Development (UNCTAD) made a new analysis under the title “The COVID-19 Shock to Developing Countries”.
The analysis says that leading exporting countries are to face drop in investments between 2 trillion USD and 3 trillion USD in the next two years. The world economy is to go into recession in 2020-21 in spite of the G20 countries infusing 5 trillion USD. The predicted loss of global economy this year is expected to be in trillion USD. In just two months since the spread of the virus, developing countries have taken a huge hit in terms of currency depreciation, capital outflows, falling commodity prices, losing export earnings, declining tourist revenues.
India and China
The report also says that India and china are to stay out of these global recessions. However, the report did not give proper explanation for the countries being out of the recession. Recently, the ICRA, Moody’s and other leading market observers have predicted that the growth rate of India is to decline. However, they did not bring out factors that might put India in recession mode. This says that though India is to get affected economically by the virus, the impacts are to be minimal as compared to other developing countries.