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Thursday, 29 July 2021

Global debt topped $258 trillion in 1Q 2020 due to Covid-19 crisis: UN Special Envoy for 2030 Agenda Financing Mahmoud Mohieldin

In exclusive statements made to Ahram Online, Mahmoud Mohiledin said the world is experiencing significant risks via the Covid-19 pandemic that need suitable policies to help countries recover

Doaa A.Moneim , Thursday 10 Sep 2020
Mahmoud Mohieldin
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The United Nations (UN) is set to hold a high-level meeting for member countries' presidents and governments 29 September to discuss the implementation of policies to help finance efforts aiming at countering the Covid-19 pandemic and aiding recovery.

Speaking to Ahram Online, the UN secretary general's special envoy for Agenda 2030 financing, Mahmoud Mohieldin, explained that a meeting was held Wednesday with the participation of 40 finance ministers of member countries to discuss policies emerging from six discussion groups formed in June to examine ways to help in fighting the pandemic and enabling countries to recover from it.

"The proposed policies cover six pillars, including external finance and inclusive development, providing global liquidity and ensuring financial stability, debt management, private sector creditor participation, fighting illicit financial flows, and how to recover in a better way, for the sake of achieving sustainability," Mohieldin said.

Mohieldin pointed out that the world is experiencing an upward increase in poverty and hunger after witnessing notable improvements for decades, adding that the new policies aimed to help will be discussed further in the scheduled meeting 29 September.

He also revealed soaring global debt levels that topped $258 trillion (331 percent of world GDP) in the first quarter of 2020, according to the International Financial Institute, while 70 to 100 million people are expected to be pushed back into extreme poverty during 2020 and 2021.

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He added that about 400 million jobs have been lost since the onset of the pandemic, and acute hunger is set to double in 2020.

"To address the crisis, 88 percent of global fiscal support amid the crisis comes from high-income countries, while low-income countries represent only 0.03 percent," according to Mohieldin.

Regarding the proposed policies, Mohieldin said they include debt cancellation and write-downs of bilateral and multilateral debt, buy-backs of commercial debt, swapping debt sustained for sustainable development goals achievement, or debt sustained amid fighting climate change, and supporting global banking relationships.

The policies also involve scaling up social protection, including drafting a Universal Basic Income Contract, providing public finances to support jobs, especially small and medium-sized enterprises (SMEs) and the informal economy, in addition to creating and expanding sustainable finance instruments such as green and SDG bonds, Mohieldin told Ahram Online.

Mohieldin served as corporate secretary, president's special envoy, and managing director for the World Bank Group. He was minister of investment of Egypt in from 2004 until 2010, and served on several boards of directors in the Central Bank of Egypt and the corporate sector.

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