The pandemic plunged an additional 77 million people into extreme poverty last year and many developing countries are unable to recover due to the crippling cost of debt maturities, and that’s before the added impact of the war in Ukraine, a report from United Nations on Tuesday.
According to the report, rich countries were able to support their recovery from the pandemic with a record amount of loans at ultra-low interest rates. But the poor spent billions paying off their debts and faced much higher rates, preventing them from investing in improving education and health care, protecting the environment and reducing inequalities.
According to the UN, 812 million people lived in extreme poverty — on $1.90 a day or less — in 2019, but in 2021, in the midst of the pandemic, the figure rose to 889 million.
The report addressed financing to achieve the UN’s development goals for 2030, which include ending poverty, ensuring quality education for all young people and achieving gender equality.
This effort “comes at a critical moment for humanity and adds to the crises arising from climate attacks on our natural systems and the prolonged COVID-19 pandemic,” said the entity’s deputy secretary general, Amina Mohammed, in a statement. Press conference.
Added to this, he added, is the global impact of the war in Ukraine. A UN analysis indicates that “1.7 billion people are facing rising prices for food, energy and fertilizers as a result of the war in Ukraine,” Mohammed said.
The report estimates that the GDP per capita of the top 20% of developing countries will not return to pre-2019 levels by the end of 2023, even before absorbing the shock of Russia’s invasion of Ukraine.
The poorest developing countries spend, on average, 14% of their income on debt interest, and many are forced to reduce their budgets for education, infrastructure and spending as a result of the pandemic, the report explained. Rich developed nations only pay 3.5%, he added.
The war in Ukraine will aggravate these problems, the report said, and will raise the price of energy and raw materials, as well as cause further disruptions in the supply chain, increase inflation, reduce growth and increase volatility in financial markets. .
According to Mohammed “it would be a tragedy” if rich donor nations increased military spending as a result of the war and cut aid to developing countries and reduced efforts to address the climate crisis.
The UN was already on track to miss its development goals before the pandemic, which caused new problems, he added. Now, the war and its impact will set back those efforts again, “so the big message is that we need more resources,” he added.
“There is no excuse for inaction at this defining moment of collective responsibility, to ensure that hundreds of millions of people are lifted out of hunger and poverty,” Mohammed said. “We must invest in access to decent and green jobs, in social protections, in health care and in education without leaving anyone behind.”
The report’s recommendations include accelerating debt relief and increasing eligibility for highly indebted middle-income countries, aligning the international tax system to address issues such as unequal availability of coronavirus vaccines and access to medical products, accelerate investment in sustainable energy and improve the exchange of information.
The report was prepared by the UN Department of Economic and Social Affairs in collaboration with more than 60 international organizations, including those of the international financial organization and institutions.
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