New York/IBNS: Unless countries across the world act together now, the COVID-19 pandemic will cause “unimaginable devastation and suffering around the world”, UN Secretary-General António Guterres said on Thursday at a virtual high-level meeting on financing for development.
Painting a picture of 60 million pushed into extreme poverty; famine of “historic proportions”; some 1.6 billion people left without livelihoods; and a loss of $8.5 trillion in global output – the sharpest contraction since the Great Depression of the 1930s – he called for a response with “unity and solidarity”.
“We are asking for immediate, collective action in six critically important areas”, Mr. Guterres said at the online event to leverage more funds for sustainable development.
Beginning with the global liquidity crisis, he said that this was where the health and economic crises meet; “a dangerous nexus that could prolong and deepen both”, calling for extending Special Drawing Rights to supplement public spending reserves.
Noting that the economic fallout from the pandemic threatens a wave of defaults in developing countries, stymieing the effort to reach the 2030 SDGs, the UN chief’s second call was for “durable solutions on debt, to create space for investments in recovery and the Sustainable Development Goals”.
Next, he urged private creditors holding a growing share of developing countries’ sovereign debt to find incentives to encourage more creditors to provide debt relief.
Mr. Guterres then drew attention to external funding, saying that aligning incentives in global financial systems with the SDGs would boost confidence “to relaunch investment in sustainable development”.
Turning to illicit financial flow, such as tax evasion and money-laundering, which deprive developing countries of hundreds of billions of dollars annually, he said that “we must plug the leaks” by revising national systems and international frameworks.
The UN chief’s final point was the overarching need to “recover better” from the ravages of the coronavirus pandemic.
Stay the development course
COVID-19 has exposed and is exacerbating deep inequalities and injustices that need to be tackled, including for women, who, with typically fewer savings and lower incomes, experience economic impacts worse than men.
“All our efforts must go towards building sustainable and resilient pathways that enable us not only to beat COVID-19, but to tackle the climate crisis, reduce inequality and eradicate poverty and hunger”, underscored the UN chief.
He upheld that we must face these challenging and the corresponding dangers, with “all urgency, seriousness and responsibility”.
“Getting through COVID-19 and recovering better will cost money. But the alternative will cost far more”, concluded the Secretary-General. “This is a global crisis, and it’s up to all of us to solve it”.
New financial architecture
Even before COVID-19, financial constraints posed challenges for developing countries to meet the SDGs. Today, economic and financial shocks triggered by the coronavirus have left many struggling to respond to the pandemic and its social and economic consequences.
President of the General Assembly, Tijjani Muhammad-Bande, maintained that to achieve the SDGs by 2030, “we have to rethink our economic systems”, requiring “leadership, political will and collaborative efforts among a wide variety of actors to safeguard the future for generations to come”.
He highlighted the need to mobilize public, private and external financial resources, for both rapid recovery and for longer-term progress in achieving the 2030 development agenda.
Noting that many developing countries are financially ill-equipped to halt the spread of COVID-19 as well as its social and economic consequences, the Assembly president maintained that “concrete proposals and timely action” were needed to prevent them from “sliding into disorderly defaults”.
“Now is the time to revise the international financial architecture”, he said, arguing that plans must “not only address current liquidity shortages, but also provide durable solutions that create vital fiscal space for investments in sustainable development for countries in need”.
Mr. Muhammad-Bande stressed that COVID -19 and its related economic and social fall-out cannot be addressed in a vacuum, but instead integrated into broader discussions on financing for sustainable development.“The United Nations provides us with a forum to convene all actors and specialised policy communities to address these challenges”, he reminded the meeting.
Our interconnected world
Prime Minister of Canada, Justin Trudeau, called the pandemic “a stark reminder” of how interconnected our world has become, spelling out that “to keep our citizens safe and healthy, we must defeat COVID-19 wherever it is found”.
This requires a global, coordinated plan that will also facilitate global and domestic economies to bounce back.
Jobs and businesses in every country depend on “the health and stability of economies elsewhere” – all of which is hinged on the success of the global economy in weathering this storm, said the co-convener of the high-level summit.
“COVID-19 is an unprecedented challenge for our modern world, but it’s also a unique opportunity to build a better future, to create a safe and prosperous world”, he added.
‘Wake-up call’
Sharing the gavel, Andrew Holness, Prime Minister of Jamaica, called the pandemic “a wake-up call” for the international community to reinvigorate a comprehensive system of global economic governance “that can cope with global disruptions while promoting inclusive development”.
He said a big challenge for the international financial system, was to channel public and private credit flows, into productive, inclusive developmental capital flows:
“The work streams on global liquidity and financial stability as well as debt vulnerability, should inform our response to the financial dimensions of this crisis”, endorsed the Jamaican Prime Minister.
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