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Session of the Economic Commission for Latin America and the Caribbean (ECLAC). Photo: @cepal_un.

These countries have the highest debt in Latin America

The UN recently called on international financial institutions for debt relief.

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Antonio Guterres, UN Secretary General, was in charge of making this request in the middle of the session of the Economic Commission for Latin America and the Caribbean (ECLAC).

The request, which consists of public debt relief for Latin American countries, as well as a restructuring of these, taking into account the current high world inflation, seeks to generate new financing opportunities to boost the growth of these economies.

Luis Felipe López Calva, global director of World Bank Poverty, highlighted:

Low productivity and inequality are two sides of the same coin and they reinforce each other in Latin America and the Caribbean. Structural heterogeneity is a complex and very difficult problem to break in the region.

Ranking of the most indebted countries

Taking into account the comparison parameters used by the Mexican economist and political analyst Mario Campa in an interview with DW, which take the public debt and divide it by the size of the economy, generally using for this the Gross Domestic Product (GDP) determined according to the latest figures from the International Monetary Fund (IMF), the countries are ordered by highest to lowest percentage of indebtedness:

  1. Venezuela 307 %
  2. Brazil 91.9 %
  3. Bolivia 86.1 %
  4. El Salvador 82.6 %
  5. Argentina 74.4 %
  6. Costa Rica 69.4 %
  7. Uruguay 65.7 %
  8. Ecuador 62.2 %
  9. Colombia 60.6 %
  10. Dominican Republic 59.4 %
  11. Panama 56 %
  12. Mexico 54.8 %
  13. Honduras 47.6 %
  14. Nicaragua 46.9 %
  15. Paraguay 39.4 %
  16. Chile 38.3 %
  17. Peru 34.4 %
  18. Guatemala 30.6 %

“It is a call to the IMF, the World Bank or the IDB so that, first of all, either they expand their portfolio of projects or they make sure credits are granted in a more flexible way, redirecting resources to the most needy countries and also attending to the needs of climate change,” explained Campa.

Before Guterres' request, a report by the UN Development Program (UNDP) had already indicated that 10 Latin American countries were part of a list of 54 nations in which more than half of the world's poorest people live and that urgently need relief.

According to the organization, if alternatives are not found to finance these debts, there would be a dramatic increase in poverty in countries such as Haiti, El Salvador, Cuba, Venezuela, Ecuador, and Argentina.

“If Latin America and the Caribbean want to break out of the pattern of low growth, low investment, and high inequality of the pre-pandemic period, we need to increase the ambition of our development strategies. We must adopt a new generation of productive development policies that already have very clear theoretical and practical approaches on how to mobilize the collective action of all relevant agents,” highlighted José M. Salazar, Executive Secretary of ECLAC.

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