Developing world faces debt crisis because of coronavirus: UN chief Antonio Guterres
Financial Times report highlights UN chief's comments on response to COVID-19 and the financial crisis because of it
- UN chief Guterres warns of COVID-19 debt crisis for developing world, reports Financial Times.
- Guterres says response to coronavirus to the financial aspects has been fragmented, and geopolitical divides are not helping.
- Countries such as Brazil and South Africa had borrowed heavily from domestic lenders rather than from foreign investors at high interest rates.
United Nations Secretary-General Antonio Guterres said the world faces intense problems of debt sustainability because of the coronavirus crisis that have not been properly understood or addressed, the Financial Times reported Monday.
“The response to Covid and to the financial aspects [of the crisis] has been fragmented, and geopolitical divides are not helping,” Guterres told the FT.
Read more: PM Imran appeals to global institutions for debt relief to combat coronavirus
Countries such as Brazil and South Africa had borrowed heavily from domestic lenders rather than from foreign investors, at interest rates much higher than those available to rich countries, making the dangers less visible than in previous emerging market debt crises, according to Guterres.
"They are essentially borrowing in the internal market but maturities are coming down," Guterres told FT. "This is a very bad signal."