Antonio Guterres, Secretary-General of the United Nations, speaks to reporters after a meeting with British Prime Minister Boris Johnson for climate change discussions at United Nations headquarters on Sept 20, 2021, during the 76th Session of the UN General Assembly in New York. (JOHN MINCHILLO / POOL / AP)

NEW YORK - UN Secretary-General Antonio Guterres warned on Monday that if left unchecked debt distress in the world’s most vulnerable countries would be “a dagger through the heart of global recovery” from the coronavirus pandemic.

“The international community has taken a few positive steps, but it is time for a quantum leap in support,” Guterres said, speaking at the opening of the UN Conference on Trade and Development in Barbados.

It is deeply unfair that rich countries can borrow cheaply and spend their way to recovery - while low- and middle-income countries struggle to keep their economies afloat.

Antonio Guterres, UN Secretary-General

As of mid-2021, over half of the world’s poorest countries “are in external debt distress, or at risk of it,” World Bank President David Malpass said last week.

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The International Monetary Fund in August approved a $650 billion allocation of Special Drawing Rights (SDRs) - the fund’s unit of exchange backed by dollars, euros, yen, sterling and yuan. Guterres pushed for a substantial re-allocation of unused SDRs - “not a symbolic one” - to vulnerable countries.

He also called for G20’s Debt Service Suspension Initiative to be extended into next year and made available to all countries that need it, including middle-income countries, for a comprehensive strategy around reforming the international debt architecture and for private finance to help fill the gap.

“We know suspending debt payments will not be enough in many countries. They will need effective debt relief, involving both public and private creditors,” Guterres said.

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“It is deeply unfair that rich countries can borrow cheaply and spend their way to recovery - while low- and middle-income countries struggle to keep their economies afloat,” he said.