Minister Faisal urges global action on debt relief for vulnerable economies at UN debate

16 Apr 2024 | 23:51
Tourism Minister Ibrahim Faisal speaking at UN debate (Photo/ Maldives Mission NY)

During the United Nations High-level Thematic Debate today on Debt Sustainability and Socio-Economic Equality for All, Minister of Tourism Ibrahim Faisal emphasized the critical need for debt relief measures to safeguard economies, particularly Small Island Developing States (SIDS), from financial deterioration.

Minister Faisal underscored the significant vulnerabilities faced by SIDS due to external economic shocks and highlighted the lack of adequate international financial assistance to address these challenges.

He pointed out that many SIDS, including the Maldives, struggle with high levels of debt incurred from external borrowing, which further exacerbates their financial situation.

The escalating cost of borrowing limits their capacity to invest in crucial developmental projects necessary for economic growth, thus posing long-term sustainability risks.

Emphasizing the importance of substantial investments for economic development, Minister Faisal noted that obtaining necessary financing remains a major challenge for most SIDS.

He stressed the need for concessional finance and low-interest borrowing options to facilitate investment.

However, he highlighted the difficulties in accessing such financial assistance, hindering national development progress.

Minister Faisal expressed concern that high external debt levels, particularly during global recessions or economic shocks, are unsustainable and impede governments' ability to allocate funds for essential developmental initiatives.

To address these financial challenges, the Maldives advocates for debt relief initiatives aimed at supporting countries facing severe financial distress.

The country also calls for international cooperation to establish policies that provide relief measures, preventing the escalation of financial crises among vulnerable economies.