Recent crises have pushed 165 million people below the poverty line since 2020, the first year of the COVID-19 pandemic, according to UN data obtained by Reuters and Agerpres, and the hardships have since been compounded by climate change and the war in Ukraine. Friday.

The organization is calling for a moratorium for developing countries to reverse this trend in a context where the crises of the past 3 years, starting with the coronavirus pandemic and ending with the rise in the cost of living, have reduced the incomes of 75 million people below the extreme poverty line of $2.15 a day.

According to the projections of the United Nations Development Program (UNDP), those who live on less than 3.65 dollars a day are considered poor, by 90 million more.

Countries that have managed to invest in protection measures over the past three years have prevented the impoverishment of part of the population, UNDP Administrator Achim Steiner said in a statement. At the same time, he added that in countries with very high debt there is a relationship between debt, insufficient social spending and an alarming increase in the level of poverty.

Therefore, the UNDP is asking for a “pause” in debt payments for countries that are forced to choose between these obligations and social assistance. The money of these countries should be directed to social measures against economic shocks.

According to UNDP estimates, “the solution is not beyond the capacity of the multilateral system”: lifting 165 million people out of poverty would require $14 billion a year, which is just 0.009% of total world GDP in 2022 or less than 4% of national debt service. that are developing

If you also factor in the lost income of those already below the poverty line before the recent crisis, mitigation costs rise to $107 billion a year, or 0.065% of gross domestic product, or about a quarter of debt service.

Interest payments, huge costs for poor countries

Another UN report released on Wednesday noted that some 3.3 billion people live in countries that spend more on debt than on education or health care. Also, developing countries pay higher interest rates even though they have lower debt levels and their debts are growing faster.

Steiner emphasized that “the lack of action to restructure the sovereign debts of developing countries is at a human cost. We need new mechanisms to anticipate and absorb shocks, and to make the financial architecture work for the most vulnerable.”

UN Secretary-General Antonio Guterres, who has long called for reform of international financial institutions, again this week condemned the system as “outdated, reflecting the colonial dynamics of the era in which it was created.”

The UN warned back in 2020 that the COVID-19 pandemic would deepen extreme poverty, especially for women, but subsequent crises caused by the economic loss since the start of the Russian invasion of Ukraine and other factors have compounded the problem.