UNICEF urges debt relief for developing nations to help children

The UN children agency releases a new report on the looming debt crisis facing many poorer nations, and says 1 in 8 countries spend more servicing their debt than on social services.

Protecting children’s rights in low- and middle-income nations requires rich nations to continue offering debt relief, so as to stave off a looming debt crisis linked to Covid-19.

This statement sums up the conclusions of a new report released on Thursday by UNICEF, the UN children’s agency, entitled “Covid-19 and the Looming Debt Crisis”.

Among its major findings is the worrying fact that 1 in 8 nations spends more on interest payments on debt than on social expenditure.

This disparity in spending means that millions of children receive substandard education, healthcare, and social protections.

National debt affects children

Citing reports from the International Monetary Fund (IMF), the report notes that 25 percent of developing nations are currently experiencing, or at high risk of, facing debt distress. The children living in these countries total around 200 million.

“As the global economy contracts and revenues fall, the growing burden of debt interest threatens to crowd out social spending still further,” it reads.

The UNICEF report praises the efforts of G20 nations to provide temporary debt relief through June 2021.

“This appears to have had some effect in maintaining social spending on health and social protection in the 46 countries participating, although spending on education has contracted.”

Education suffering

Yet, UNICEF laments that only one-third of eligible nations have signed up for the Debt Service Suspension Initiative, and says that further researching into low uptake needs to be undertaken.

The report also states that relief does not cover commercial creditors, “leaving middle-income countries increasingly exposed.”

“Initial reports from UNICEF country offices suggest that Covid-19 has negatively affected social spending in indebted countries, in sectors including education, child protection, nutrition, and water, sanitation, and hygiene,” it warns.

Protecting children’s rights

The UNICEF report concludes that further debt restructuring is necessary in order to protect children’s rights.

Nations with heavier debt burdens should be given greater leniency, it says, while more transparency on debt-fueled spending in developing nations should be promoted.

The goal, concludes the report, would be for creditors to coordinate their actions better in order “to convert debt into investments for children.”

Vatican News staff writer
Source: vaticannews.va