As
governments struggle to cope with the COVID-19 pandemic, billions of
people living in countries teetering on the brink of economic collapse
are being threatened further by a looming debt crisis, according to a
new UN report released on Thursday.
In
its report, the UN-led Inter-Agency Task Force on Financing for
Development explores the steps that governments must take to avert debt
overload and address the economic and financial havoc wrought by the
pandemic.
“The global community was already falling behind in efforts to end
poverty, take climate action and reduce inequalities”, said UN Deputy
Secretary-General Amina Mohammed. “We have one chance to build back
better together for people and for the planet”.
With recommendations based on joint research and analysis from more
than 60 UN agencies and international institutions, the 2020 Financing
for Sustainable Development Report outlines measures to address the
impact of the unfolding global recession and financial turmoil –
particularly in the world’s poorest countries.
Least Developed Countries
The COVID-19
crisis has shaken global financial markets with heavy losses and
intense volatility that has prompted investors to move around $90
billion out of emerging markets – the largest outflow ever recorded.
Particularly alarming for many Least Developed Countries (LDCs) is the prospect of a new debt crisis.
To mitigate this, 2020 Financing for Sustainable Development calls,
among other things, suspending debt payments from LDCs and other
low-income countries; strengthening the global financial safety net; and
reversing the decline in official development assistance.
“We are far from having a global package to help the developing world
to create the conditions both to suppress the disease and to address
the dramatic consequences in their populations”, said UN
Secretary-General, António Guterres, during the recent launch of his
Report on the Socioeconomic Impact of COVID-19.
“What is needed is a large-scale, coordinated and comprehensive
multilateral response amounting to at least 10 per cent of global GDP”,
he added.
Beyond the immediate crisis response, the coronavirus
pandemic should prompt the implementation of long-overdue measures to
reset the world on a sustainable development path and make the global
economy more resilient to future shocks.
To do this, the report recommends accelerating investment in
resilient infrastructure; strengthening social protections; enhancing
regulatory frameworks; and strengthen the international financial safety
net and framework for debt sustainability.
While highlighting gaps, new challenges and risks, the current crisis
also provides a timely example of the potential of digital
technologies.
As lockdowns and physical distancing have become the norm, digital
communication tools have helped keep people connected and provided
online platforms for children to continue their education.
But many workers in the so-called “gig economy”, dominated by service
sector start-ups, are poorly protected against income losses in a
recession. 2020 Financing for Sustainable Development addresses these
gaps and other opportunities and challenges of digital finance.
“Only a collective response, inspired by shared responsibility and
solidarity, will suffice to address the unprecedented challenges of the
COVID-19 pandemic”, said Liu Zhenmin, Under-Secretary-General for
Economic and Social Affairs and Chair of the Task Force that issued the
report.
“Governments, development partners, the private sector and other
stakeholders must work together to combat COVID-19 and support every
effort to address its social and economic impacts,” he underscored.
IFRC
St.
Vincent and the Grenadines Red Cross gives a hand washing demonstration
at a school as part of the their work to reduce the spread of COVID-19.
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Limited gains in gender equality and women’s
rights made over the decades are in danger of being rolled back due to
the COVID-19 pandemic, the UN Secretary-General said on Thursday.
The COVID-19 pandemic is a “colossal test of
leadership”, the top UN rights official said on Thursday, underscoring
the need for “decisive, coordinated and innovative action from all, and
for all”.
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