The United Nations Development Program (UNDP) warned that one in three nations of the region faces “financial vulnerability”. The economic risks facing low- and middle-income countries remain greatest. The indicator was constructed based on debt levels and on liquidity and solvency criteria.

In Latin America and the Caribbean, it is observed that 14 of 40 nations are vulnerable according to the detailed analysis. Among them, five are in the category of highest risk of “Severe vulnerability”: Argentina, Belize, Ecuador, Grenada and Venezuela. The remaining nine countries are included in the group with “highly speculative” debt.

Bolivia, Costa Rica, El Salvador, Honduras, Nicaragua, Saint Vincent and the Grenadines, Dominica and Haiti appear in that area. Its problems include that its public finances are compromised in the eyes of rich nations. What’s more, are not covered by debt relief mechanisms started in recent months.

The disparity leaves them with dire financial needs in the midst of a pandemic and they are not getting help to get out of the trance. In the region, the countries that can benefit from the schemes are Nicaragua, Saint Vincent and the Grenadines, Honduras, Dominica and Haiti. The remaining nine do not have access to mechanisms to alleviate their situation.

The UNDP administrator, Achim Steiner, stated that “it takes more, it takes more ambition. These are measures that must be taken urgently and collectively ”. The official added that “the risk is not so much a cascade of defaults, but also that the lack of fiscal space in these countries prevents a recovery after the crisis.”

The New York-based body estimates that the debt service of countries in trouble will total 1.1 trillion dollars in 2021. “More than countries, our call is to the multilateral system“Said UNDP Chief Economist George Gray to The country. The expert observes “a slow-burning debt crisis”.

Gray observes two groups in Latin America, that of nations highly dependent on raw materials and those with “structural” problems. The economist states that the latter “depend on tourism” and must “import oil and food.” For the analyst, the Covid-19 crisis adds to “A slow process of accumulation of liabilities”.

A woman sleeping in the streets of Buenos Aires

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