Durable Financing, Investment Strategies for Least, Middle-Income Countries Key to Improving Lives Worldwide, Secretary-General Tells Development Committee

Following are UN Secretary-General António Guterres’ remarks at the Development Committee in Bali, Indonesia, today:

Madame Chairman, may I first of all express once again to you, to your Government and to the people, my deep solidarity in relation to the trying times that you have been facing.

I just came from Palu and I was deeply impressed by two things.  One, the resilience, the sense of solidarity and the courage of the people.  And second, the very effective response that the Government has put together and your very ambitious programme of reconstruction that, I hope, will have the full support of the international community as a whole.

And I’d like to say how happy I am to have this opportunity to address the Development Committee.

The 2030 Agenda [for Sustainable Development] and the Paris Climate Agreement set out our shared vision of a better world.  Over the last three years, we have embarked on a journey to implement that vision.  A total of 102 countries have now completed their Voluntary National Reviews of their implementation of the 2030 Agenda.  These reviews provide us with a good picture of the impressive efforts to realize change on the ground and in the lives of people.

But all of us know this progress is not fast enough and it is uneven.  In some areas, we risk backsliding.  Quite simply, we are falling behind in our promise to leave no one behind – even if the global economy goes on growing.

It is true that the churning global environment adds to the challenge:  volatility in financial markets, growing risks of widespread debt crises, disruptions of global trade, and ever-growing losses due to climate-related disasters.

At the same time, we face a set of megatrends that are changing the context of our efforts – such as climate change, urbanization, migration, demographic changes, and the rapid technological change, including artificial intelligence – driving the Fourth Industrial Revolution.

And we have much more work to do mobilize the necessary financial resources and technologies for achieving the transformation we need to better the lives of people.  We have no time to lose.  And allow me to point to three priority action areas that in my opinion are relevant.

First, financing.  In order to effectively tap into existing resources, both public and private, we must align the global financial architecture, national macroeconomic policy frameworks, financial systems and tax systems and institutions more fully with the 2030 Agenda.

All countries must meet the commitments they made in the Addis Ababa Action Agenda.  I commend developing countries for stepping up efforts to mobilize domestic resources, including through tax reform and other good governance measures.

At the same time, these efforts could be undermined unless the international community takes much more effective steps to fight illicit flows of capital, money-laundering and tax evasion, which continue to drain vital resources from the developing world.

We must further focus on developing effective sustainable investment and financing strategies at the regional and country levels – and building the necessary national institutional capacities.  We must also do more to invest in women and girls which we know yields enormous dividends in greater sustainability and inclusive development.

For all these reasons, I have recently launched a Strategy for Financing the 2030 Agenda.  This Strategy builds on the Addis Ababa Action Agenda, and on the promising actions of both public and private actors and aims at more effectively accelerating and scaling up the mobilization of finance for sustainable development.

The World Bank Group has long been a trail blazer in many areas relevant to the sustainable financing agenda – including by introducing innovative financial instruments, increased development aid for Sustainable Development Goals and climate investments and facilitating the financial engagement of the private sector, particularly through the International Finance Corporation.

The second action area is addressing the growing debt challenge.  This must be a global priority, as recognized by the Sustainable Development Goals.  At a time when Governments are faced with large investment needs for the Sustainable Development Goals, debt sustainability threatens to become a major stumbling block to realizing the 2030 Agenda.  And with trade conflicts and financial market volatility, the margin of manoeuvre of countries may dramatically diminish.

Thirty low-income countries are now acutely vulnerable to debt distress.  In many of them, decades of development gains potentially could be wiped out in a matter of months.

I welcome the Development Committee’s focus on this issue.  The world’s poorest countries need new grant assistance, not a higher mountain of unpayable debt.  We need to secure the path to sustainability, particularly for those many countries – including several mid-income ones – that are vulnerable to recurrent shocks or dealing with unexpected long-term pressures that strain national budgets.

The example of Dominica and other Caribbean States often devastated by repeated hurricanes demonstrates the importance of finding new financing instruments and innovative partnerships that can help ensure that debt translates into investments that generate sustainable growth and resilience, not crises of solvency.

I commend the World Bank for leading this shift, starting with the historic decision to extend concessional financing to Jordan and Lebanon – middle-income countries - in response to the dramatic impact of the influx of Syrian refugees.

And for least development countries moving into the ranks of middle income, graduation must not be seen as a punishment, but as a prize.  Many countries – including those characterized as middle income – face levels of debt service that shrink fiscal space at a time when public spending needs to expand to achieve the Sustainable Development Goals.

The Inter-Agency Task Force on Financing for Development, where our institutions cooperate, has already put forward relevant proposals, such as the greater use of state-contingent debt instruments, including in official lending.

Two examples of the types of innovative partnerships needed are the Global Financing Facility to scale up financing for women, children and adolescent health; and the recent partnership between the United Nations and the World Bank to address the humanitarian-development-peace nexus in conflict-affected States.

The third and final action area is a focus on fast-evolving technologies that are changing the landscape of sustainable development.  Technological innovation opens new possibilities to address long-standing development challenges and to accelerate progress across the full range of the Sustainable Development Goals.  We must seize this opportunity and take a strategic approach to managing the disruptions that such rapid change can also cause.

Fintech is one key example - new technologies have driven our progress in financial inclusion, providing access to financial services to hundreds of millions of people.  This access is critical to poverty reduction and shared sustainable development.  Yet, there are risks that are significant, including privacy issues and fraud, as well as systemic risks that challenge existing regulatory approaches.

Digitalization generates tremendous gains in efficiency and productivity.  But it also might drive a phenomenon of so-called “premature deindustrialization” – a failure to absorb growing populations into manufacturing activities – as activities are reshored to advanced economies.

More broadly speaking, technological advances will disrupt labour markets as traditional jobs change or disappear, even as the number of young jobseekers continues to grow.  There will be many more new jobs created but it is not always easy to change the capacity of people in order to be able to take profit from them.

Retraining will be needed at previously unimaginable scales.  Education must adapt, from the earliest grades.  The very nature of work will change.  Governments will also have to strengthen their systems of social protection, including, where appropriate, social transfers and targeted income support to smooth the transition of those most directly affected by these disruptions.

The Strategic Partnership Framework the United Nations signed with the World Bank in May consolidates our joint commitment to cooperate in helping countries implement the 2030 Agenda.

At the same time, a key aspect of our reforms of the United Nations development system is to strengthen the partnership at the country level between our United Nations country teams, Governments, the World Bank and the International Monetary Fund (IMF) and other relevant partners.  Our improved coordination will ensure we are able to serve you better.

As I close, let us recognize that we will even be more effective if we ensure gender equality and women’s empowerment around the world when we do the same within our own institutions.  Let us continue to do all we can to ensure gender parity and share best practices among our organizations.

For the first time in United Nations history, there is full parity in the United Nations Senior Management Group and among Resident Coordinators leading United Nations country teams around the world.  There is much more to do — including in our efforts in the field — and let us learn from one another.

Thank you once again for this opportunity.  I look forward to broadening these possibilities to ensure that we do our part in supporting countries to meet their ambitious goals in relation to the Agenda 2030.