The coronavirus pandemic hits developing countries at a time when they have already been struggling with unsustainable debt burdens for many years, as well as with rising health needs.
Barbados Prime Minister and Chairman of the Caribbean Community (CARICOM) the Honourable Mia Mottley said on Monday that the Caribbean bloc CARICOM countries need to reconstitute debt or a debt moratorium to “provide certainty to both borrower and lender” measures to fight the impact of the global pandemic.
Mottley, addressing the World Health Organization’s annual assembly being held virtually, warned that without debt relief there could be a “disorderly unravelling” that will create a crisis both within countries and the global financial system.
On May 3rd, Finance Ministers, Financial Secretaries, and other high-level government representatives from 15 Caribbean countries held yesterday a virtual meeting with ECLAC’s Executive Secretary Alicia Bárcena, heads of Caribbean regional organizations and representatives of other UN agencies in the subregion to discuss the economic impact of the COVID-19 pandemic on their economies, already besieged by both climatic and economic shocks, including heavy indebtedness and high exposure to natural disasters, Reuters reported.
The financial turmoil from the crisis has triggered record portfolio capital outflows from emerging economies and sharp currency devaluations in developing countries, making servicing their debts more onerous.