{"id":43717,"date":"2021-03-26T15:11:26","date_gmt":"2021-03-26T15:11:26","guid":{"rendered":"https:\/\/www.climatechangenews.com\/?p=43717"},"modified":"2021-03-26T16:15:13","modified_gmt":"2021-03-26T16:15:13","slug":"rare-imf-relief-offers-hope-green-recovery-debt-laden-nations","status":"publish","type":"post","link":"https:\/\/www.climatechangenews.com\/2021\/03\/26\/rare-imf-relief-offers-hope-green-recovery-debt-laden-nations\/","title":{"rendered":"Rare IMF relief offers a hope of green recovery to debt-laden nations"},"content":{"rendered":"

As the International Monetary Fund is poised to inject $650 billion into the global economy, <\/b>indebted low and middle-income countries are exploring ways to leverage the relief into green investments.<\/strong><\/p>\n

In recent months, the plea of vulnerable nations for financial support has risen to the top of the international agenda.<\/p>\n

Revenues from the commodity trade and tourism collapsed in 2020, leaving many nations struggling to meet their basic needs, let alone invest in sustainable development.<\/p>\n

Cash-strapped governments in Africa, Latin America and the Caribbean do not have the luxury of borrowing cheaply to finance a green recovery from the coronavirus pandemic.<\/p>\n

More than half of developing countries are estimated to be in debt distress, with interest payments accounting for at least a quarter of governments\u2019 tax revenues in 2020 and raising to 40% in some countries, according to Jubilee USA Network.<\/p>\n

And the costs of dealing with intensifying climate impacts such as drought, flooding and tropical storms have not gone away.<\/p>\n

In some African countries, up to 10% of GDP has been diverted to adapting to climate change, African finance ministers said in a statement<\/a> this week. “Our fiscal buffers are now truly depleted,” they wrote.<\/p>\n

\u201cThe most consequential climate decision made in the next few months to five years will be made by the IMF, the G7, the G20 and the US Treasury as part of global pandemic response policies,” Eric LeCompte, executive director of Jubilee USA Network, told Climate Home News.<\/p>\n

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A debt repayment suspension initiative by the G20 has brought some relief, but excludes middle-income countries, such as small island states, that have been hit hard by the pandemic and climate impacts.<\/p>\n

In Belize, which suffered intense flooding following the passage of hurricanes Eta and Iota last year, crops were washed away and homes and road infrastructure destroyed. Its debt-to-GDP ratio reached 130%, yet international support has been limited.<\/p>\n

\u201cWe find ourselves underwater and at risk of sinking even deeper,” Christopher Coye, a minister of state in Belize\u2019s finance ministry, told Climate Home News in an email, describing the response from international financial institutions as “lethargic” and “constrained”.<\/p>\n

Unless the global community acts \u201cfast, proportionally and comprehensively,\u201d the health crisis could turn into a debt crisis, Mia Mottley, prime minister of Barbados, told a conference of African ministers<\/a> on Monday.<\/p>\n

\u201cWe simply do not have the money, the fiscal space nor the policy space needed to build the green, resilient and inclusive development of which we speak,\u201d she said.<\/p>\n