Excellencies,
Ladies and Gentlemen,
It is my great pleasure to join you at today’s event. Allow me to thank our hosts, and particularly Ambassador Prasad as Chair of the Pacific Island Forum, for bringing us together to discuss SDG financing in the Pacific.
We are gathering at a moment of global turmoil.
Policymakers are faced with multiple, compounding shocks - rising cost of living, a lingering pandemic, financial market turmoil, and rising risks of debt distress.
We are backsliding on the SDGs. And with inflation high and growth prospects dimming, the macroeconomic context for getting back on track is extraordinarily challenging.
Nowhere is this more true than in the world’s most vulnerable countries, which include small island developing States. They are the most exposed and vulnerable, not only to ever more frequent and severe climate disasters, but also to rising import prices for food and fuel, and tightening financial conditions.
Distinguished colleagues,
To turn the tide and rescue the SDGs, the Secretary-General has proposed a global SDG Stimulus. The plan calls for addressing liquidity and debt issues, and injecting new resources for a financing boost for developing countries.
First, for many developing countries, capital markets have effectively dried up. While the world is awash in liquidity, central banks are removing billions of dollars of liquidity from financial markets every month.
We must find ways to boost developing country liquidity now – by rechannelling unused Special Drawing Rights, increasing access limits to credit and financing facilities of the international financial institutions, and ensuring that all vulnerable countries have access to such support.
Second, we must also increase long-term concessional funding to developing countries, which prioritizes attaining the SDGs and enhancing resilience.
Lending criteria should be broadened to include all the dimensions of vulnerability that affect developing countries, and not be based on income alone. The multidimensional vulnerability index currently being developed at the UN can give us a new yardstick to guide such allocations and help address a longstanding concern of SIDS.
We should also support innovative instruments such as blue and green bonds, for countries that have borrowing space. Public guarantees can bring down interest costs and should be seen as a form of burden sharing for climate investments.
Third, we must step up efforts to provide debt relief. For many countries, including many SIDS, public debt has reached critical levels.
We should open debt relief programs to all vulnerable countries, and explore channels to write down debt, such as debt-for-climate and debt-for-SDG investment swaps.
We should also include state-contingent elements, such as hurricane clauses, in debt contracts.
Excellencies,
The window to rescue the SDGs and safeguard climate goals is fast closing. But if we act with urgency, we can turn things around. The world has shown, in the initial response to COVID-19, that it can mobilize and deploy vast resources quickly for the greater public good.
We must find the same urgency to rescue our global goals.
Thank you.