BAKU, Azerbaijan, February 13. Developing countries are facing a worsening development and debt crisis as interest rates remain high, growth underperforms expectations and trade disruptions intensify, Secretary-General of the United Nations Trade and Development (UNCTAD) Rebeca Grynspan said at the Munich Security Conference, Trend reports.
Grynspan noted that the scale of the challenge is growing.
“3.3 billion people that we put in the research before, now it's 3.4. And 3.4 is 100 million people more. So it's not only a decimal of that number,” she said.
She explained that progress has stalled due to tighter financial conditions and weaker global growth.
“Part of the reason why things are not getting better is because interest rates didn't go down as fast as we expected. Growth is not picking up as we expected,” Grynspan stated.
She also pointed to trade disruptions that are disproportionately affecting vulnerable economies.
“The trade disruptions that for many of these countries are the only source of hard currency is affecting precisely more the vulnerable countries that are already in debt,” she said.
Highlighting tariff barriers, Grynspan added: “These developing countries today have 27% tariffs from the U.S. that is higher than developed countries and higher than most countries in the world. So they are being hit not only because tariffs are higher, but also because they are higher than others. And so their competitiveness is even more fragile today than it was before.”
While welcoming the one-year extension of the African Growth and Opportunity Act (AGOA), she cautioned that short-term measures are insufficient.
“GOA, that has been extended for one year, is good news, but one year is not enough for investment,” she said.
Turning to the debt situation, Grynspan stressed that the human impact is often overlooked.
“Nobody calls it a debt crisis because the markets are not in crisis, people are. And so that's why it's not being taken so seriously, because markets are not suffering yet,” she said.
She described the situation as a broader development crisis that threatens stability. Calling for stronger multilateral engagement, she emphasized the need for more decisive action.
Grynspan also underscored the lack of coordination among debtor nations. "We have the Paris Club, but still, we don't have a debtors club,” she said.