The burden of debt service is forcing the poor to make difficult choices, the UN official said, according to Reuters

HAMBURG, Germany (Reuters) – Many of the world’s poorest countries are forced to cut other investments to pay off their debts, United Nations Development Program Administrator Achim Steiner said on Monday.

Speaking at an event in Hamburg, Steiner added that the financial crisis meant countries around the world were struggling to meet their sustainable development goals.

“For many countries, the least developed, they have literally been taken out of the financial markets. They can no longer borrow money,” Steiner told the Sustainability Conference in Hamburg, adding that they need to cut other spending to avoid debt defaults. “It’s a very extreme situation.”

Countries such as Ghana, Sri Lanka and Zambia have defaulted on debt in recent years, while others are struggling to make payments after the global interest rate hike cycle drove up borrowing costs.

At the same time, the world needs trillions of dollars more per year to meet climate spending targets. Steiner said boosting financing is “absolutely essential” to achieving the Sustainable Development Goals – something the UNDP is closely monitoring.

“We need to address this problem of our international financial architecture and our international financial system,” Steiner said. “If not, we will fall apart in our effort to find the answers our citizens expect us to find.”