Debt relief for the poorest countries critical in fight against COVID-19

NEW YORK – “COVID-19 is generating an unprecedented global economic crisis. And as we witness in all such crises, this economic destruction is cruelly and unequally distributed.

“For the world’s poorest countries, the financial fallout caused by the pandemic, combined with debilitating debt-service obligations, are hampering their ability to prevent further transmission and protect citizens.

“And for the families within those countries, with widespread loss of income and limited access to food in environments where social distancing is impossible, soap and water for handwashing a luxury, and quality health services non-existent, the situation is already dire, and it is only going to get worse.

“While children are largely spared the immediate health consequences of the pandemic, they will suffer the economic destruction left in its wake. More than 200 million children live in debt-distressed countries and those at high risk of debt distress. The burden of debt leaves countries struggling to prevent disease transmission.  

“Low-income countries in particular are being forced to drastically increase spending to respond to the health emergency, while scaling up – or, in some cases, creating – social protection systems including unconditional cash transfers, guarantee of income for those who lose their jobs and employment security.

“The additional spending required must not come at the cost of other critical services for children, such as routine immunization, maternity care, and child protection. At this crucial time, countries need to spend more to protect the future of their children.

“To reduce disease transmission and prevent further economic catastrophe, UNICEF wholeheartedly joins The World Bank President and IMF Managing Director in their call for debt relief and debt restructuring for countries in need.”

“As the United Nations Secretary-General António Guterres noted in his recent letter to the G20, debt restructuring is a priority — including immediate waivers on interest payments for 2020. By relaxing the burden of debt financings, countries are more likely to deliver the agile and aggressive response required to reduce the impact of the economic crisis and stop COVID-19 in its tracks.”