Developing countries face uphill battle in global financial system — UN Chief laments

The United Nations Secretary-General António Guterres, says global financial architecture remains stacked against developing countries and fails to offer them support when facing economic difficulties.

In an op-ed ahead of this month's Summit of the Future, Mr. Guterres warns that international financial institutions are not equipped to adequately address the challenges faced by developing nations, such as unsustainable debt levels.

"The global financial architecture is heavily weighted against developing countries and fails to provide a safety net when they face difficulties, leaving them drowning in debt, which drains money away from investments in their people," Mr. Guterres writes.

He argues that multilateral development banks are not changing their business models fast enough to boost access to affordable private financing for infrastructure and sustainable development projects in the Global South.

Without such access to capital, the UN boss notes that developing countries "will not be able to tackle our greatest future threat: the climate crisis. They urgently need resources to transition from planet-wrecking fossil fuels to clean, renewable energy."

The UN chief is calling on world leaders to seize the opportunity of the Summit of the Future to reform global financial institutions and development aid frameworks.

He says concrete steps are needed "to tackle debt distress, increase the lending capacity of multilateral development banks, and change their business model so that developing countries have far more access to private finance at affordable rates."

Only by addressing the structural biases in the global economic order can developing nations hope to gain greater autonomy over their economic destiny and make faster progress on climate action and sustainable development, according to Mr. Guterres.