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UN warns against austerity plans for threatening development of poor countries

ONU advierte contra planes de austeridad por amenazar desarrollo de países pobres

Despite forecasts of pessimistic economic growth for 2023, now this is not the time to implement austerity plans that threaten development goals, particularly in poor countries, the UN said in a report released Wednesday.

The United Nations Department of Economic and Social Affairs forecasts a world growth of only 1.9% this year, "one of the lowest rates in decades".

The The World Bank has already sharply revised its forecast downward: 1.7% for 2023compared to 3% last June, due to persistent inflation, the rise in interest rates and the effects of the war in Ukraine.

But "this is not the time for short-term thinking or fiscal austerity that exacerbates inequality, increases suffering and risks pushing the Sustainable Development Goals away" (ODS), says the UN Secretary General, Antonio Guterres, in the preamble to the report.

The 17 SDGs adopted in 2015 aim to achieve by 2030 the eradication of poverty, food security for all and access to clean and affordable energy.

A summit in September in New York will assess the current situation of the SDGs. But most of them are not on the way to being achieved.

Y "Slower growth, elevated inflation and rising debt vulnerabilities threaten to further set back hard-won SDG achievements, deepening the already negative effects of the COVID-19 pandemic."warns the report.

Its main author, Hamid Rashid, says that "In this stage, the typical recipe of economists would be to cut public spending" and points out that some governments have already been called to "buckle up".

On the contrary, "our key message in the report is that developing country governments, especially, should avoid austerity"which "it would be extremely detrimental to ODS"he explains to AFP.

In this context, Rashid advocates a restructuring of the debt of countries in trouble, before they go into default.

According to the report, by 2022, in eight developing countries, this debt burden represented more than 25% of government revenueup to almost 80% in Sri Lanka.

The UN is also concerned about the risk of a reduction in development aid.

The war in Ukraine and a future reconstruction estimated between 350,000 and 500,000 million euros (USD 380,000 to 545,000 million) "will divert some resources"says Rashid, who fears "a big setback for low-income countries".

In September, the United Nations Development Program (UNDP) estimated that the world had set back five years in human development due to unprecedented crises.

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