Lasting Damage of Pandemic, Debt Burdens Preventing Developing Countries from Investing in Recovery, Secretary-General Tells Financing Meeting

Following are UN Secretary-General António Guterres’ remarks to the high‑level meeting on financing for development in the era of COVID-19 and beyond: “jobs and social protection for poverty eradication”, held today:

Almost two years into the COVID-19 crisis, a huge divergence in the recovery is undermining global trust and solidarity.  The pandemic has not only confirmed but deepened existing inequalities.  In developed countries, access to vaccines has allowed economies to reopen, while stimulus payments and investments herald projected growth of 5 or 6 per cent this year.

In sub-Saharan Africa, that figure is just about 2.5 per cent.  A recent report by UNCTAD, the United Nations Conference on Trade and Development, forecasts that the cumulative cost of delayed vaccination alone will amount to $2.3 trillion by 2025, with developing countries bearing the brunt.  This could lead not only to a lost decade for development, but to a lost generation of poorly educated, unemployed, disaffected young people.

Across the developing world, the pandemic has caused lasting damage, while debt burdens prevent Governments from investing in recovery.  Advanced economies are investing nearly 28 per cent of their gross domestic product (GDP) into economic recovery.  For middle- and low-income countries, that number is between 2 and 6.5 per cent — a tiny proportion of a much smaller amount.

Many of these same developing countries are facing the worst ravages of the climate crisis, which they did nothing to create.  Global solidarity so far has been inadequate.  This uneven, unfair recovery is eroding trust between the developed and developing world — trust that is essential to global cooperation in other areas.

Today’s meeting is an opportunity to change course and build a recovery that benefits all.  The pandemic is set to increase the number of extremely poor people by up to 224 million around the world.  More than three-quarters of these “new poor” are in middle-income countries.

Many developing countries face crippling debt service costs while their domestic budgets are stretched and their ability to raises taxes is reduced.  These countries urgently need a helping hand.  But, many, particularly vulnerable middle‑income countries, do not qualify for aid and debt relief under current rules.

I welcome the recent issuance of $650 billion in special drawing rights by the International Monetary Fund (IMF).  But, obviously, they are distributed, by quotas, largely to the countries that need them least.  It is important that there is a significant amount of these special drawing rights to be rechannelled to the countries in greatest need, as I have urged.

Likewise, the Group of 20’s (G20) Debt Service Suspension Initiative and the Common Framework for Debt Treatment, have potential to ease the debt crisis.  But, they are not sufficient.  The Debt Service Suspension Initiative should be extended into next year and made available to all middle-income countries that need it.

Private finance must also be part of the solution.  More generally, we must stop trying to adjust the crisis to the tools and start adjusting the tools to the crisis.  The current dynamics of global debt mean rich countries can borrow cheaply and spend their way to recovery, while low- and middle-income countries struggle to keep their economies afloat.

Without debt relief, many countries will be in an unsustainable financial situation.  Their people will pay with their lives, and with years of poverty and hunger, for this failure of global solidarity.  No Government should be forced to choose between servicing its debts and serving its people.

In the longer term, I renew my call for reforms to remedy long-standing weaknesses and injustices in the international debt architecture and end the deadly cycles of debt waves, global debt crises and lost decades.  This starts with a time-bound, open dialogue with all stakeholders to build trust and transparency.  Our initiative on Financing for Development, convened jointly with the Governments of Canada and Jamaica, yielded many innovative options.

Si la pandémie de COVID-19 a déclenché une crise économique et sociale mondiale, c’est en raison de l’insuffisance généralisée d’investissements dans la protection sociale et les services de base.

Un nouveau contrat social, tel que proposé dans mon rapport sur « Notre Programme commun », devrait être au cœur des efforts de redressement.  Pour rompre les cycles de privation, nous devons investir de façon stratégique dans les emplois décents et l’action climatique, en nous appuyant sur des systèmes solides de protection sociale.

Une transition juste vers les énergies durables représente un énorme potentiel de création d’emplois et de réduction des inégalités sous toutes leurs formes.  Tous les plans de relance et budgets nationaux devraient se fonder – ou tout du moins s’aligner – sur les Objectifs de développement durable et sur l’Accord de Paris.

Le monde a besoin d’une protection sociale universelle d’ici à 2030, comprenant notamment une couverture sanitaire universelle, une protection du revenu, une éducation et une formation professionnelle, en particulier pour les femmes et les filles.

Au cours des 18 derniers mois, nous avons vu à quel point soutenir les personnes dans les moments difficiles faisait la différence. Les nombreuses mesures exceptionnelles et temporaires mises en place l’an dernier constituent donc un bon point de départ.

Toutefois, pour parvenir à une reprise riche en emplois et à une transition juste, nous devons mobiliser d’importants investissements publics et privés, quelque 1200 milliards de dollars étant nécessaires à l’instauration d’une protection sociale universelle dans les pays à revenu faible et intermédiaire.

Cela ne sera pas possible sans une solidarité internationale autrement plus grande.  Dans le cadre de nos efforts pour soutenir les pays dans tous ces domaines, j’ai le plaisir d’annoncer la création de l’Accélérateur mondial sur l’emploi et la protection sociale pour une transition juste, lancé en collaboration avec l’Organisation internationale du travail.

L’objectif de l’Accélérateur est de créer au moins 400 millions d’emplois d’ici à 2030, principalement dans l’économie verte et l’économie des soins, et de faire en sorte que 50 % des personnes qui ne bénéficient pas encore d’une protection sociale minimale soient couvertes d’ici à 2025.

The forthcoming meetings of the international financial institutions, the G20, UNCTAD and COP26 [twenty-sixth Conference of the Parties to the United Nations Framework Convention on Climate Change] will be a pivotal moment to put the world on a sustainable, resilient, and inclusive path.

Global cooperation is indispensable to building resilience to future shocks, through economies that work for everyone.  I wish you an excellent debate.  Thank you.