I thank you moderator for giving me the floor.
I also thank the keynote speaker and panelists for their valuable insights on durable solutions to recurrent debt crises.
Even before the outbreak of the COVID-19 pandemic, there had been many difficult issues around the debt and debt sustainability. The pandemic has exacerbated the situation. Many countries are on the verge of debt distress and liquidity crunch. The FSDR 2021 report highlights some important menu of policy options both for immediate and longer-term solutions. Yet the central question remains how to best use the range of instruments and tools that exist to address the debt problems and ensure long-term debt sustainability, especially now to build back better from the pandemic.
Let me share a few specific thoughts in this regard:
First, the DSSI and other debt-relief measures are welcome. But these are temporary initiatives. Also, fear of losing credit rating impedes many countries to avail these benefits. We need more support for long-term solutions, which include debt relief, debt standstill, debt swap, and debt cancellation. There can be targeted debt-swap programs for LDCs and other vulnerable countries on universal access to vaccines, sustainable solutions to climate change issues etc.
Second, in many LDCs, there is an increased spending vis-à-vis lower level of revenue earning and shrinking sources of external financing. As a result, the external debt burden has risen exponentially. For many countries, the expenditure for debt service obligations are more than the money needed for providing social protection for vulnerable people. Therefore, SDGs implementation in many critical areas is at a high risk. They need greater access to additional financing in concessional terms including more access to IDA and PRGT to meet their financing needs for sustainable COVID recovery, building resilience, and SDGs implementation.
Third, ODA has a long track record of helping countries in financial constraints. Therefore, the OECD countries can help ease up the financial pressure by fulfilling their ODA commitments.
Fourth, we welcome the recent agreement to allocate US$650 billion SDR to support recovery efforts. We are, however, concerned that due to very low allocation of quota in IMF, the amount of fund that the LDCs and other vulnerable countries will get is far from adequate. We, therefore, call for simplified reallocation of unutilized SDRs by developed and advanced developing countries to LDCs.
Finally, it is imperative that our discussions on developing durable solutions to recurrent debt crises also include private creditors.
I thank you all.