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Costa Rica warns of anxiety in developing countries without further Covid assistance

Costa Rica update

The Costa Rican president warned that developing countries are at risk of instability under the weight of a pandemic without further financial support from richer countries and the IMF.

Costa Rica, with a population of over 5 million, is known for its ecotourism. In recent years, the ratio of debt to GDP has risen. President Carlos Alvarado said the low-income and high-social spending caused by the pandemic has put pressure on governments in developing countries and pushed society to the limit.

“It puts a lot of economies already under a lot of pressure and has been taken care of,” he told the Financial Times. “There are many social demands and there is a great risk of economic, political and social instability in developing countries.”

United Nations warning The coronavirus pandemic triggered a global debt sustainability crisis 100m or more According to the World Bank, it will fall into poverty in 2020. The IMF has provided new support by issuing special drawing rights or SDRs and debt repayment relief.

SDRs are intended to increase liquidity and can be retained as reserves, exchanged for hard currencies, or used to pay obligations to other IMF members.

Costa Rica has agreed with the IMF this year on an SDR facility of about $ 1.8 billion, but Alvarado said it was not enough to have a serious impact. He said he needed more development funding from the IMF and others. Without it, instability would affect richer countries, especially despite lack of action on migration and climate change, he said.

“Here, I think the phrase” not all of us will be okay until we are all okay “will come true,” he said. “If we want to change the world, we need to generate more support. That’s the only way.”

The IMF did not immediately respond to requests for comment.

Centre-left Alvarado said US President Joe Biden’s government refocused on climate change and took a more comprehensive approach to migration issues, from crop failures to lack of opportunity. He said a deeper understanding of the cause was needed.

His comment was on the sidelines of the Latin American and Caribbean Community (CELAC) meeting in Mexico City on Saturday, saying that some left-wing members should replace the Washington-based Organization of American States (OAS). It is a group of 33 countries that proposed. ..

At the meeting, left and right CELAC leaders exchanged thorns, including a visitor who surprised Venezuelan President Nicolas Maduro, but agreed to broadly work on access to the Covid-19 vaccine and the new Natural Disaster Fund. ..

Alvarado sees CELAC as a complement to OAS, and said small countries like Costa Rica have long called on G20 members Mexico and Argentina to relay requests for further development funding.

Rating agency Fitch said in September that Costa Rica’s “10-year financial deterioration” could have reached an inflection point thanks to belt tightening on the latest budget. However, protests against austerity remain fresh, with elections scheduled for early 2022, and political impasse is still a significant risk, he said.

Alvarado is confident that Costa Rica will continue to be a solvent and will comply with the IMF agreement, but said cooperation and development funding are key to success.

“The more we put pressure on ourselves, the harder it will be to move policy forward,” Alvarado said.

Costa Rica warns of anxiety in developing countries without further Covid assistance

Source link Costa Rica warns of anxiety in developing countries without further Covid assistance

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