Debt Service Burden Forces Poor to Make Difficult Choices, According to UN Official – Reuters

HAMBURG, Germany (Reuters) – Many of the world’s poorest nations are forced to reduce other investments in order to manage their debt obligations, according to Achim Steiner, the administrator of the United Nations Development Programme.

During a speech at an event in Hamburg, Steiner emphasized that the financial crisis is hindering countries across the globe from achieving their sustainable development goals.

“For many least developed countries, they have literally been priced out of the financial markets. They cannot borrow any more money,” Steiner stated at the Hamburg Sustainability Conference. He noted that these countries are compelled to cut back on other expenditures to avoid defaulting on their debt. “It’s a very extreme situation.”

Countries such as Ghana, Sri Lanka, and Zambia have experienced debt defaults in recent years, while others are finding it increasingly difficult to meet their payment commitments due to rising borrowing costs following global interest rate hikes.

Simultaneously, the world requires significantly more funding each year to fulfill climate spending targets. Steiner remarked that enhancing financial resources is “absolutely central” to achieving sustainable development goals, a matter that the UNDP is closely monitoring.

“We must address the issue of our international financial architecture and system,” Steiner urged. “If we do not, we risk failing in our efforts to deliver the solutions that our citizens expect of us.”