World’s emerging economies need $2.5 trillion COVID-19 rescue package: UNCTAD

The world economy will go into recession this year with a predicted loss of trillions of dollars of global income due to the coronavirus pandemic, spelling severe trouble for developing countries with the likely exception of India and China, according to a latest UN trade report.

With two-thirds of the world's population living in developing countries facing unprecedented economic damage from the coronavirus crisis, the UN is calling for a USD 2.5 trillion rescue package for these nations.

In the face of a looming financial tsunami this year, UNCTAD proposes a four-pronged strategy that could begin to translate expressions of international solidarity into concrete action.

This includes a USD 1 trillion liquidity injection for those being left behind through reallocating existing special drawing rights at the International Monetary Fund; a debt jubilee for distressed economies under which another one trillion dollars of debts owed by developing countries should be canceled this year and a 500 billion dollars Marshall Plan for a health recovery funded from some of the missing official development assistance (ODA) long-promised but not delivered by development partners.

The speed at which the economic shockwaves from the pandemic has hit developing countries is dramatic, even in comparison to the 2008 global financial crisis, the UNCTAD said.