Excellencies,
Distinguished Delegates,
Ladies and Gentlemen,
Despite an unprecedented policy response to Covid-19, there is a grave danger of a sharply diverging world. Unless we take immediate action, we risk another lost decade for development, putting SDG achievement out of reach.
This is the stark warning of the 2021 Financing for Sustainable Development Report.
This is the sixth report of the Inter-agency Task Force, and the second we have now published amidst the global pandemic. It is an urgent call to the international community to rise to this challenge, and to respond to an historic crisis with a bold package of actions.
Before I lay out the set of interventions, allow me to briefly thank members of the Inter-agency Task Force for their excellent collaboration. As you know, the Task Force brings together expertise from throughout the UN system and beyond. The major institutional stakeholders – the IMF and the World Bank, WTO, UNCTAD and UNDP – play a key role. Along with around 60 other agencies and international organizations, they have contributed their data and analysis throughout the report.
I am grateful for their support.
Excellencies,
Historic fiscal support measures – amounting to USD 16 trillion – have been vital in addressing the immediate health crisis, and preventing an even deeper economic downturn.
But support measures were highly uneven. Developed countries accounted for more than 80 per cent of global fiscal stimulus. Many developing countries are responding to the crisis under tight fiscal constraints. This is limiting their ability to protect citizens and invest in recovery.
It is this inequity – linked to lack of fiscal space and liquidity constraints – that could severely worsen many countries’ development prospects over the medium- and long term. This can put the SDGs out of reach.
Financing challenges are at the heart of the current crisis. Financing policies can point the way out of it, and toward a more prosperous and resilient future.
The Task Force recommends three sets of actions.
First, we need immediate action to support developing countries in their crisis response.
I am encouraged by the progress that we have seen on this very issue in recent days. A new allocation of SDRs will ease liquidity constraints. Extension of the G-20 Debt Service Suspension Initiative will provide welcome respite for those countries that have taken advantage of the initiative.
But more remains to be done – donor countries must work harder to ensure that ODA commitments are met. They should generously consider proposals to replenish concessional financing facilities on an advanced schedule.
Second, we must take advantage of the large-scale crisis response to ‘rebuild better’, in a more sustainable and risk-informed way.
COVID-19 has underlined the systemic nature of risk in an interconnected world. The cascading effects of COVID-19, climate-related disasters and other risks, present fundamental challenges to our economic and financial models.
The pandemic has reminded us that to achieve the SDGs, we need to mobilize sufficient financing for investments in sustainability, risk reduction, and resilience. And we need to ensure that all financing, and public and corporate balance sheets are sustainable, risk-informed and resilient.
At the national level, this includes investments in people – through strengthening social protection systems and investment in human capital. And, in sustainable and resilient infrastructure and productive capacity.
The international community must support these efforts, particularly in countries with fiscal constraints.
Now is the time to consider ultra-long term fixed-rate financing – with up to 50-year tenures – so that all countries can take advantage of low global interest rates. We should also make use of debt swaps and buybacks to free fiscal space for investments in the SDGs. And we should strengthen the system of public development banks.
We also have to ensure that private investments are aligned with sustainable development. Policy makers can help facilitate a new business model that works for everyone, including by:
- pricing externalities such as carbon emissions, and
- reorienting capital markets toward sustainability.
The third set of recommendations pertains to our global policy and institutional architecture. And to addressing shortcomings that we have long been aware of – but that were revealed once again over the last 13 months.
The current crisis also opens space to reform and “future-proof” this architecture at all levels.
The report calls for reform of tax, trade and debt systems and architecture, so that they are aligned with the 2030 Agenda for Sustainable Development.
As we pursue proposals in relation to:
- taxation in the context of a digitalising economy,
- the multilateral trading system,
- international debt architecture and the global financial safety net, we must ensure that they meet the needs of developing countries.
I remain convinced that the United Nations can serve as a unique platform to galvanize collective action on these issues. I trust that your deliberations at this year’s FfD Forum can deliver on this promise.
Excellencies,
In this short intervention, I am not able to reflect the full range of analysis and recommendations emanating from the Task Force’s work. I strongly encourage you to take the time and read the report carefully. I trust that it provides a sound analytical foundation for your deliberations.
Thank you.