‘EMs need $500-bn stimulus in face of looming debt crisis’

livemint.com:

NEW DELHI : Mounting debt remains a major threat to emerging economies, Achim Steiner, administrator of the United Nations Development Programme (UNDP), said in an interview. While efforts are being made to ease the debt burden of developing nations, progress has been too slow, he said. The veteran civil servant proposed a $500 billion stimulus package under the sustainable development goals (SDGs) of the UN secretary-general to rescue the developing world’s financial systems.

Despite some efforts by multilateral development banks and developed nations to address the issue, the efforts are insufficient as they grapple with major financial instability back home, he added. Edited excerpts: Over four months, we have seen some significant efforts by the international community on this through the leadership of India and its G20 presidency. We saw President Emmanuel Macron (of France) hosting the Paris summit, which brought together many leaders to focus on financing developing countries.

And, I think in terms of incremental announcements and acknowledgement of the urgency to act, we have had some progress. We are still trying to find ways, both through the G20 pathway, leading into the central bank governors’ meeting in Gandhinagar in a few days, to be more explicit about how to address the financing elements of this plan. If you see the secretary general’s SDG stimulus plan briefly, it was about injecting liquidity into developing countries.

It was about dealing with debt restructuring. In Paris, some positive signals were seen on liquidity, with multilateral development banks (MDBs) potentially leveraging the balance sheets with new instruments of approximately $200 billion. Also, special drawing rights were allocated to