Middle-Income, Small Island States Urgently Need Debt Relief, Secretary-General Stresses, in Remarks to G20 Finance Ministers, Central Bank Governors

Following are UN Secretary-General António Guterres’ remarks, as prepared for delivery, to the third Group of 20 (G20) meeting of finance ministers and central bank governors, held today:

We are now in the second year of a global pandemic that has killed 4 million people.  Extreme climate events regularly devastate vulnerable communities.  You have come together to determine the course of some of the most pressing issues we face:  access to vaccines; extending an economic lifeline to the developing world; and more and better public finance for ambitious climate action.

A global vaccine gap threatens us all because as the virus mutates, it could become even more transmissible, or even more deadly.  Pledges of doses and funds are welcome — but they are not enough.  We need at least 11 billion doses to vaccinate 70 per cent of the world and end this pandemic.  The world needs a global vaccine plan, to at least double production of vaccines and ensure equitable distribution, using COVAX as the platform.

To realize this plan, I am calling for an emergency task force that brings together the countries that produce and can produce vaccines, the World Health Organization, GAVI and international financial institutions able to deal with the relevant pharmaceutical companies and manufacturers.  The G20 is best placed to lead the world in preparing and implementing such a plan.  Right now, it is important to support the $50 billion investment road map, to be led by the International Monetary Fund (IMF).

Solidarity does not stop there.  Many developing countries are teetering on the verge of debt default.  They need an economic lifeline.  They face significant funding constraints, curtailed in many cases by interest payments and by reduced opportunities to raise taxes.  Eight out of 10 of the “new poor” are in middle‑income countries, which currently remain ineligible for debt-relief programmes.

Solidarity requires that advanced economies channel unused special drawing rights into the new Resilience and Sustainability Trust to support developing countries.  Special drawing rights also need to be considered as additional funding, not deducted from official development assistance (ODA).  I hope the G20 will expand the debt initiatives to include vulnerable middle-income countries and small island developing States, and fully operationalize the Common Framework as the basis for a reformed, and more equitable, international debt architecture.

Strengthening the financial architecture is also critical to fight climate change.  We are still struggling to hold the global temperature increase to the 1.5°C target of the Paris Agreement.  At 1.2°C, we are on the verge of the abyss.  If COP26 in Glasgow is to be a turning point, we need all G20 countries to commit to achieve net‑zero [carbon emissions] by mid-century, and to present nationally determined contributions aiming at a cut in global emissions by 45 per cent by 2030, compared to 2010 levels.

Developing countries also need reassurance that their ambition will be met with financial and technical support.  I am deeply concerned over the lack of progress on public climate finance.  Twelve years ago, in 2009, developed countries agreed to mobilize $100 billion annually from public and private sources for mitigation and adaptation action in developing countries by 2020.  They repeated this pledge in Paris.

One hundred billion dollars is a bare minimum.  But, the agreement has not been kept.  A clear plan to fulfil this pledge is not just about the economics of climate change; it is about establishing trust in the multilateral system.  Solidarity begins with the $100 billion.  It should extend to allocating 50 per cent of all climate finance to adaptation.  Development banks have an essential role to play, helping developing countries to transition from coal, oil and gas to renewable energy by adding green jobs and reducing inequalities.

While public finance is key, large-scale private finance is also essential.  This now appears possible, for the first time.  Over 160 financial firms, responsible for $70 trillion of assets, have joined the Glasgow Financial Alliance for Net Zero.  To reinforce these efforts, the G20 must set ambitious, clear and credible climate policies, and ensure the private sector has the framework it needs through mandatory climate-related financial disclosures.  And we need all financiers to commit to no new international funding for coal, by the end of 2021.

To restore trust in multilateralism, we need to deliver on vaccines, economic recovery and climate finance.  With your leadership and political will, we can do it.