50 countries in danger of bankruptcy: UN

More than 50 of the poorest developing countries in the world are at risk of default and virtual bankruptcy unless the rich world provides urgent help.

Achim Steiner, director of the United Nations Development Program, warned this while speaking at the UN’s COP27 climate summit.

He warned that without measures to help them with debt, poor countries would not be able to deal with the climate crisis.

There are currently 54 countries on our list [of those likely to default] And if we have more shocks — interest rates go up more, borrowing becomes more expensive, energy prices, food prices — it becomes almost inevitable that we will see a number of these economies unable to pay, he said.

Inflation, the energy crisis and rising interest rates are creating conditions in which an increasing number of countries are at risk of default, with potentially catastrophic effects for their people, said Achim Steiner.

And this creates a catastrophic scenario – look at Sri Lanka [which has descended into civil strife] With all the social, economic and political implications this holds.”

“The debt issue has now become such a big problem for many developing economies that dealing with the debt crisis has become a prerequisite for accelerating climate action,” he said.

We need targeted liquidity injections into countries so that we can invest in energy transitions and adaptation [to the impacts of extreme weather]. “

He warned that the climate crisis is compounding the problem, as countries face increasing impacts from bad weather. Poor countries are not receiving the funding they promised from the rich world, but they face an increased risk of storms, floods, droughts and heat waves.