EGYPT: Over 50 of the poorest, developing countries are running the extreme risk of defaulting on their debt and becoming bankrupt unless the developed, First World countries ensure urgent financial aid, the head of the UN Development Programme alerted.
Surging inflation, the energy shortage and spiking interest rates are some of the vital factors. Achim Steiner, the UN’s global development chief said that the developing countries are on the brink of ultimate insolvency, with catastrophic impacts on their millions of citizens.
“There are currently 54 countries on our list [of those likely to default], and if we have more shocks – interest rates go up further, borrowing becomes more expensive, energy prices, food prices – it becomes almost inevitable that we will see a number of these economies unable to pay,” he said.
“And that creates a catastrophic scenario – look at Sri Lanka [which has descended into civil strife] with all the social, economic and political implications this carries with it,” he added.
Steiner addressed international delegates at the COP27 UN climate summit, noting that a default would further deter global climate plans. “It certainly will not help [climate] action,” he said.
Steiner highlighted the urgent need to pump finances into developing nations to keep on track with green energy objectives: “We need to inject targeted liquidity into countries to be able to invest in energy transitions and adaptation [to the impacts of extreme weather].”
Moreover, the climate crisis poses a huge challenge, as most developing countries face extreme weather conditions, including the disastrous effects of storms, floods, droughts and heatwaves.
If these countries continue to confront these crises with crippling inflation and economic distress, it will be immensely difficult to fulfil any long-term UN climate objectives.
Moreover, developed countries must also fulfil their assistance pledges of $100bn (£86bn) a year to help them cope with greenhouse emission cuts and adapt to the adverse impacts of extreme weather.
“If Cop27 does not deliver a convergent path on the $100bn, I think many developing countries will leave Sharm el-Sheikh at least thinking about their commitments to the global climate process,” he said. “And I say that very deliberately because it doesn’t mean they will stop doing things at home, which they are already doing.”
On Thursday, the summit talks centred around pertinent issues of science, the youth and future generations. Hundreds of youth activists flocked to the conference to heed their cry for urgent climate actions, but the protests were muted following the Egyptian government’s efforts to curb tensions.
However, the summit witnessed the attendance of more than 600 fossil lobbyists, a number far higher than in previous years, signalling that climate talks have a long way to go.
Meanwhile, for some good news, a Norwegian oil company has extended the development of the world’s northerly oilfield drill.
Nancy Pelosi, US Speaker, arrived at the Sharm el-Sheikh following hopeful news that the Democrats better than expected against their Republican peers this midterm, and also warned that some Republicans still considered climate change to be a liberalist ruse. US President Joe Biden is scheduled to arrive on Friday.