UNCTAD says many developing nations in debt crisis, calls for debt restructuring

The Secretary-General, United Nations Conference on Trade and Development (UNCTAD), Rebeca Grynspan, has called for discussions at the international level to help find the right solutions for debt restructuring in many developing countries including middle-income countries.

This as she raised the alarm that many developing and middle-income countries are in a debt crisis.

Grynspan’s concerns were contained in the 2023 Trade and Development Report which was addressed in a press statement late Wednesday as published on the UNCTAD website.

According to her, the debt crisis “has to be part of the discussions at the international level to be able to find the right solutions for restructuring debts in many developing countries including middle-income countries…”

She also highlighted other factors such as the slow growth in the global economy, weak investment and credit.

Grynspan added that there is a lack of competition in “very important markets” such as energy, food, pharmaceuticals and digital.

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Grynspan said: “There are five messages that we want to emphasise from the trade and development report of this year. The first message is that the global economy is slowing down. This, despite the good news of an expected soft landing of the U.S. economy this year. But the prospectives of accelerating growth in the coming years are very slim.

“The second message is that debt is a problem and a lot of developing countries are in a debt and development crisis and that has to be part of the discussion at the international level to be able to find the right solutions for restructuring debts in many developing countries including middle-income countries.

“Investment is weak and credit is going down. So the question of where the new sources of growth will come from has to be addressed.

“We’re worried about the market concentration, lack of competition and financialisation of trade in very important markets – energy, food, pharmaceuticals and digital.”

“The report urges global financial reforms, more pragmatic policies to tackle inflation, inequality and sovereign debt distress, and stronger oversight of key markets.

“Proposes actions to get the global economy moving in the right direction by using a balanced policy mix of fiscal, monetary and supply-side measures to achieve financial stability, boost productive investment and create better jobs”, the report recommended.

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