By Thalif Deen
UNITED NATIONS (IDN) — The UN’s 17 Sustainable Development Goals, which primarily include the eradication of extreme poverty and hunger by 2030, are in deep financial trouble.
The goals have been severely undermined by the cumulative effects of several factors, including the economic fallout from the war in Ukraine and, most importantly, the widespread COVID-19 pandemic which has had a devastating impact on both the world’s rich and poor nations. JAPANESE | SWAHILI | TURKISH
The UN says the COVID-19 pandemic, now in its third year, “presents one of the greatest global challenges in the history of the United Nations”.
Over 6 million people have lost their lives, and still the pandemic continues to violently derail the progress made in achieving the 2030 Agenda, while over 100 million additional people were pushed into extreme poverty in 2020, dramatically reversing a two-decade-long decreasing trend.
The World Bank predicts that a quarter of a billion people could be pushed into extreme poverty this year while nearly 323 million people could face acute food insecurity—threatening the very first SDG from extinction.
Ambassador Collen V. Kelapile of Botswana, President of ECOSOC said: “The COVID-19 pandemic has exacerbated trends that are contributing to cataclysmic effects on development progress, and the poorest and most vulnerable are experiencing the impacts most severely.”
Economic shocks from the COVID-19 pandemic, and now the war in Ukraine, have exacerbated the situation, with the poorest countries spending billions on debt servicing, diverting resources from the pandemic response and investments towards supporting a sustainable recovery.
Addressing a three-day high-level forum on SDG Financing sponsored by the UN’s Economic and Social Council (ECOSOC) on April 26-28, UN’s Deputy Secretary-General Amina Mohammed warned: “The SDGs are in need of urgent rescue. Financing for development is an essential part of the solution. But so far, the global response has fallen far short.”
A recent UN report, 2022 Financing for Sustainable Development Report: Bridging the Finance Divide (FSDR 2022), warns that 60 per cent of the world’s poorest countries are in or at high risk of debt distress, double 2015 levels. The high cost of servicing debt in developing countries—with interest rates up to 8 times higher than their rich counterparts—is straining already fragile public finances.
The SDGs also include quality education, gender empowerment, reduced inequalities, affordable and clean energy, and sustainable cities.
One of the most positive outcomes of the Forum, which was addressed by several heads of government, vice presidents, foreign ministers, ministers of development cooperation and ambassadors, was the creation of an Integrated National Financing Framework (INFF) Facility.
The INFF is a new joint flagship initiative of the UN’s Department of Economic and Social Affairs (UN DESA), the UN Development Programme (UNDP), the Organisation for Economic Co-operation and Development (OECD), the European Union (EU) and the Governments of Italy and Sweden.
The Facility is expected “to bring together international partners to align and magnify support to more than 80 governments to channel critical investment towards the Sustainable Development Goals (SDGs)”.
The concept of INFFs was first introduced by the UN Member States in the 2015 Addis Ababa Action Agenda as a country-led approach to strengthening public and private financing for sustainable development.
Liu Zhenmin, UN Under-Secretary-General for the Department of Economic and Social Affairs (DESA) said: “It’s clear that the INFFs have an important role to play both in the immediate response to the current crisis and in rebuilding better.”
“The launch of the Facility comes at the right time. Now, more than ever, our focus must be on strengthening partnerships to bridge the finance divide and channel finance to where it’s needed most,” he declared
Global challenges require a global response, but ultimately financing flows have to fund health, education, infrastructure and other national SDG investments at the country level, he added.
UNDP Administrator Achim Steiner was equally positive. “Although there is enough money in the world to finance the 2030 Agenda, it is not allocated in the right places—just 20% of global capital is held in developing countries, which are home to 84% of the world’s population.”
“To bridge this gap, this new INFF Facility will provide countries with the technology, expertise, and tools they need to implement ambitious financing strategies that will unlock game-changing levels of finance—allowing countries to take decisive climate action and make future-orientated investments in key areas like nature, literacy, healthcare and sanitation,” he pointed out.
An Outcome Document, adopted at the Forum by Heads of State and Government, Ministers and high-level representatives, warns: “We express our grave concern that the mobilization of sufficient financing remains a major challenge in the implementation of the 2030 Agenda for Sustainable Development and that progress has not been shared evenly within and among countries, leading to further deepening of existing inequalities.”
“The success of the 2030 Agenda and the Paris Agreement will depend on our ability to mobilize resources, and the institutions that we build for the different agendas to reinforce each other.”
“We reaffirm our resolve to continue to scale up our efforts towards the full and timely implementation of the Addis Ababa Action Agenda of the Third International Conference on Financing for Development, as well as the 2030 Agenda. We further reaffirm our commitment to strengthen multilateral cooperation and solidarity to combat the consequences of the coronavirus disease (COVID-19) pandemic, including its socioeconomic impact.”
Meanwhile, in an attempt to battle the spreading financial crisis, UN Secretary-General António Guterres has established the Global Crisis Response Group on Food, Energy and Finance. Described as a high-level political Group, the goal is to “get ahead of the perfect storm of food security, energy, and financing challenges”.
According to the Deputy Secretary-General, the Global Crisis Response Group’s first report, together with the 2022 Financing for Sustainable Development Report, sets out the following recommendations for immediate action.
First, on mobilizing finance quickly and flexibly, from all sources:
(1) The international community must fulfil its official development assistance commitments and support rapid access to long-term sustainable finance.
(2) International Financial Institutions must prioritize flexibility and speed. Emergency financing mechanisms that can disburse funds rapidly and without unnecessary conditions must be put into service immediately.
(3) Access limits to the IMF’s Rapid Credit Facility and Rapid Financing Instruments must also be increased, and the cumulative limit extended.
(4) Countries with strong external positions should channel their unused Special Drawing Rights to others in need, including through the IMF’s Poverty Reduction and Growth Trust and the newly established Resilience and Sustainability Trust.
(5) New rounds of capital injections are needed for Multilateral Development Banks, including at the regional level.
(6) The multilateral banks should also take urgent measures to address the high sovereign borrowing costs faced by developing countries in the international markets and the role of Credit Rating Agencies.
Second, she said, “we need to address rising debt risks”. The G20 should reactivate the Debt Service Suspension Initiative for two years and reschedule maturity for two to five years.
The Common Framework for Debt Treatments is in dire need of reform, to include transparency of timelines and clarity on what debt should be covered. It should include a debt service payment standstill; enforcement of comparability of treatment; and inclusion of private and non-Paris Club creditors.
Third, we need to invest in equitable access to COVID-19 vaccines and treatments, as many countries are still mired in an unpredictable pandemic.
We need full funding for the COVID-19 Tools ACT Accelerator and its COVAX Facility. Countries must step up and share technical expertise and intellectual property to end this pandemic and strengthen resilience for the future.
All countries must continue to provide and expand social protection and invest in a job-rich recovery.
Finally, we must urgently step-up climate finance, half of which must go to adaptation.
This also requires aligning national budgets and tax systems with the SDGs and the Paris Agreement; addressing greenwashing, and rethinking incentives in the international financial system.
We need global solidarity, supported by strong political will, ambition and leadership. Developed countries should urgently fulfil their commitment to mobilize 100 billion dollars annually for climate action in developing countries,” she added [IDN-InDepthNews – 30 April 2022]
Photo: President Mokgweetsi Masisi of Botswana gives opening remarks at the ECOSOC Financing for Development Forum, 25 April 2022. Credit: UNDESA/Predrag Vasic