Multiple Crises Pushing Millions into Extreme Poverty, Economic and Social Council President Warns as Financing for Development Forum Opens

The Economic and Social Council opened its annual forum on financing for development follow-up today with speakers warning that a convergence of crises — the lingering COVID-19 pandemic, climate change and debt unsustainability — have been exacerbated by the war in Ukraine, threatening to reverse development gains by a generation.

Collen V. Kelapile (Botswana), President of the Economic and Social Council, opened the 2022 forum, stating the ambition of sustainable development for all is facing perhaps its greatest threat since the adoption of the 2030 Agenda.  The pandemic has exacerbated trends contributing to cataclysmic effects on development progress with millions of people around the world pushed deeper into extreme poverty and a growing gap between developed and developing countries.  Meanwhile, the world continues to see the impacts of carbon emissions on global climate and a geopolitical crisis that is driving refugee flows, causing severe disruptions on global supply chains for essential commodities and contributing to food insecurity.

While developed States have been able to borrow at low costs to fund pandemic recovery efforts, developing countries face a huge barrier in the cost of debt servicing.  Over half of least developed countries and other low-income States are now in or at risk of debt distress, while many are experiencing slow economic recovery, with estimates that 1 in 5 of them will remain below pre-pandemic levels by the end of 2023.  He called for international cooperation and multilateralism to turn the trajectory around.

Echoing those concerns, Mokgweetsi Eric Keabetswe Masisi, President of Botswana, said conflicts across the globe and climate change have further incapacitated most economies.  Stressing the need for progressive fiscal systems, he said all countries must foster the necessary breakthroughs in unlocking financing for development.  Botswana is developing a Sustainable Development Goal financing strategy to tap into domestic and international public and private sustainable development financing, diversify the economy and increase the Government’s revenue-generating capacity.  With 120 million people globally driven into extreme poverty, he stressed that in Africa alone, many States have not been able to mount robust fiscal policies to combat regressing economies — and the international community should find progressive solutions.

Abdulla Shahid, President of the General Assembly, said the pandemic has altered the development trajectory for developing countries, deepening political cleavages, social inequalities and macroeconomic fragilities — with many of those States at risk of losing an entire generation’s worth of hard-won development gains.  Short-term response measures to address inflation, vaccine inequity and gender equality gaps must be complemented by longer-term strategies that account for multidimensional vulnerabilities, with international support including increased investments, trade facilitation and reallocation of special drawing rights.  Countries in special situations must be placed at the centre of the recovery efforts of the international system, along with vulnerable middle-income States, as “the 2030 Agenda will be won or lost in these countries”, he said.

Amina Mohammed, United Nations Deputy Secretary-General, noted many economies are at the brink of a downward spiral of insolvency.  The Sustainable Development Goals need urgent rescue, she stressed, citing the Secretary-General’s Global Crisis Response Group on Food, Energy and Finance to get ahead of “the perfect storm” of food security, energy and financing challenges.  Finance must be mobilized quickly and flexibly from all sources with the international community fulfilling its official development assistance (ODA) commitments.  She called on the G20 to reactivate the Debt Service Suspension Initiative for two years and reschedule maturity for two to five years, while exploring new mechanisms to increase fiscal space, such as debt swaps.  “The international financial system has deep pockets.  We have the capacity to make sure all countries get through this crisis with their development prospects intact,” she said, urging the forum to be ambitious.

Nisreen Elsaim, Chair of the Secretary-General’s Youth Advisory Group on Climate Change, stated she spoke with a huge burden, representing all young people and their aspirations — many of them losing hope for development itself.  It is urgent to restore their trust, she said — with action, not just promises and speeches.  The need to address future pandemics, along with the situation in Ukraine, make this the most crucial time for humanity, requiring action-oriented strategies and financing.  As a Sudanese, she noted that countries like hers need good governance to fight corruption.  The world is surrounded by challenges, but also many intelligent young people, who must be included in all strategies, given their innovative ideas.

Liu Zhenmin, Under-Secretary-General of the Department of Economic and Social Affairs, presented the 2022 Financing for Sustainable Development Report of the intergovernmental task force, highlighting the backdrop of unprecedented multidimensional crises.  However, such circumstances do not affect all countries in the same way.  Many countries are struggling to recover from the pandemic, while the war in Ukraine is pushing up energy and food prices.  Unless there is immediate action, the fight against inequality may be set back by a generation.  While developed countries can borrow on low interest rates, developing countries have faced significantly higher costs, with three out of five of the poorest countries already in debt distress and billions of dollars spent servicing loans instead of supporting development efforts.  The Report provides important recommendations, including for developing countries to have access to concessional financing, for ODA commitments to be met and for the international community to resolve unsustainable debt situations.

Opening its general debate, the forum heard from Marta Lucía Ramírez, Vice-President and Minister for Foreign Affairs of Colombia, speaking on behalf of the Like-Minded Group of Countries Supporters of Middle-Income Countries.  She noted that a successful outcome must recognize the multidimensional challenges faced by all developing countries to implement their socioeconomic recovery plans under increasing fiscal constraints and debt burden — as well as geopolitical tensions that impact global trade and the economy.  International cooperation must be scaled up to meet the target of 70 per cent of the global population vaccinated by the middle of 2022.  Expressing concern that 60 per cent of the countries downgraded by credit rating agencies are middle-income States, she said the criteria to define minimum fiscal risks should be adapted to the unprecedented circumstances of the pandemic.

Saulos Klaus Chilima, Vice-President of Malawi, speaking for the Group of Least Developed Countries, said the international community is fighting with three “C” monsters:  the coronavirus, conflicts and climate change.  Noting the pandemic alone has pushed 77 million people into extreme poverty in 2021 — not considering the effect of the war in Ukraine — he stressed inequality prevails in debt burdens and in access to vaccines.  With ODA and other assistance needed more than ever, he also urged developed countries to deliver on the $100 billion goal in climate financing.  He further called on the World Trade Organization (WTO) to implement all decisions made in favour of least developed countries so that they can double their share of exports by 2021.

Ariel Henry, Prime Minister of Haiti, said it is time to review the way in which the international community allocates assistance to less developed countries, given weak results seen when compared with volume of investments.  Given the limited possibilities for mobilizing further national resources, the international community should step up efforts to honour their ODA commitments and foster access to financing in the long term.  The challenges faced by least developed countries have never been so great, he said, stressing that it is “high time” to rebuild more inclusive economies and ensure better access to financial systems in order to achieve the Sustainable Development Goals by 2030.

Also speaking on the first day of the general debate were the representatives of Malawi (on behalf of the African Group, as well as in its national capacity), Egypt, Guatemala, Sweden, Denmark, Luxembourg, Ecuador, Indonesia, Thailand, Costa Rica, Canada, Belize, Qatar, Italy and Spain.

In the morning, the forum held the first of two panel discussions, on the theme of “Financing the SDGs by increasing fiscal space for an inclusive and sustainable recovery”.  Opening with keynote addresses by Joko Widodo, President of Indonesia, and Pedro Sánchez, President of Spain, it was moderated by Achim Steiner, Administrator of the United Nations Development Programme (UNDP).  Featured panellists were Marjeta Jager, Deputy Director General for International Partnerships at the European Commission; Lia Tadesse, Minister for Health of Ethiopia; Matilda Ernkrans, Minister for International Development Cooperation of Sweden; Bounleua Sinxayvoravong, Deputy Minister for Finance of the Lao People’s Democratic Republic; and Bo Li, Deputy Managing Director at the International Monetary Fund (IMF); with lead discussant Bhumika Muchala of the Third Word Network.

Speaking during the interactive discussion were representatives of Colombia (on behalf of the Like-Minded Group of Countries Supporters of Middle-Income Countries) and Philippines.

Also speaking were representatives from civil society, from the Food and Agriculture Organization of the United Nations (FAO); the NGO Committee on Financing for Development; the Society for International Development, speaking on behalf of the Civil Society Financing for Development Group, including the Women’s Working Group on Financing for Development.

In the afternoon, the forum held its second panel discussion, focused on the theme of “Aligning the global debt architecture with the SDGs:  What will it take?”.  Opening with a keynote address by Keith Mitchell, Prime Minister and Minister for National Security, Public Administration, Home Affairs, Information Communication Technology and Minister for Finance, Planning, Economic Development and Physical Development of Grenada, it was moderated by Rebeca Grynspan, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD).  The afternoon panellists were Aiyaz Sayed-Khaiyum, Minister for Economy, Civil Service and Communications of Fiji; Abdulaziz Alrasheed, Assistant Minister for International Affairs and Macro-fiscal Policies of Saudi Arabia; Werner Hoyer, President of the European Investment Bank and Chair of the Multilateral Development Banks; and Clay Lowery, Executive Vice-President for Research and Policy at the Institute of International Finance; with lead discussant, Iolanda Fresnillo of Eurodad.

Speaking during the interactive discussion were representatives of Costa Rica, Indonesia, Spain, Russian Federation, Malawi and Zimbabwe.

Also speaking were representatives from civil society from the Global Policy Forum, also speaking on behalf the Civil Society Financing for Development Group and the Women’s Working Group on Financing for Development; the Civil Society Financing for Development Group and the Women’s Working Group on Financing for Development; and Gestos.

The forum will reconvene again at 10 a.m. on Tuesday, 26 April, to continue its work.

Opening Statements

COLLEN V. KELAPILE (Botswana), President of the Economic and Social Council, opened the 2022 forum on financing for development follow-up, stating the ambition of sustainable development for all is facing perhaps its greatest threat since the adoption of the 2030 Agenda seven years ago.  The COVID-19 pandemic has exacerbated trends contributing to cataclysmic effects on development progress, with millions of people around the world pushed deeper into extreme poverty, and a growing gap between developed and developing countries.  Meanwhile, the world continues to see the impacts of carbon emissions on global climate, and a geopolitical crisis that is driving refugee flows, causing severe disruptions on global supply chains for essential commodities and contributing to food insecurity.

While developed States have been able to borrow at low costs to fund pandemic recovery efforts, he noted that developing countries face a huge barrier in the cost of debt servicing — limiting their ability to invest in critical drivers of development, including infrastructure, housing and social services.  “The situation is dire,” he stressed.  Over half of least developed countries and other low-income States are now in or at risk of debt distress, while many are experiencing slow economic recovery, with estimates that 1 in 5 of them will remain below pre-pandemic levels by the end of 2023.  He noted this same group of countries continue to face hurdles in access to vaccines, as well as therapeutics and diagnostics that are critical for bringing a decisive end to the pandemic.

Considering those complex challenges, he called for international cooperation and multilateralism in driving urgent and coordinated action to mobilize the resources needed to turn the trajectory around, lift people out of extreme poverty, prevent the worst effects of climate change and achieve the Sustainable Development Goals.  Noting the forum is the global platform needed to advance action on these challenges, he stressed that an ambitious outcome is critical, thanking co-facilitators and all the Member States and other stakeholders for their dedication in reaching consensus on the forum outcome document on 22 April.

MOKGWEETSI ERIC KEABETSWE MASISI, President of Botswana, noting that the pandemic has relegated many countries to unprecedented debt and expenditure, said conflicts across the globe, as well as climate change, have further incapacitated most economies and diminished their ability to provide services to their citizens.  Stressing the need for progressive fiscal systems, he said all countries must foster the necessary breakthroughs in unlocking financing for development, including fulfilling international commitments, enhancing domestic revenue mobilization, and establishing good governance institutions and systems.  As well, Member States must ensure full adherence to the guiding principles of the Addis Ababa Action Agenda, he said, noting that his country is committed to the implementation of that framework.  With the support of the United Nations system, Botswana is developing a Sustainable Development Goal financing strategy to tap into domestic and international public and private sustainable development financing, diversify the economy and increase the Government’s revenue-generating capacity to support the realization of the Goals at the national and subnational level.

Noting that 120 million people globally have been driven into extreme poverty, he stressed that in Africa alone, many States have not been able to mount any robust fiscal policies to combat regressing economies or any pivotal health sector policies because of pending debts and increased interest rates and service fees.  In that regard, the international community should find progressive solutions to remedy that situation.  For instance, to avoid debt distress, he said Governments should borrow conservatively to have sufficient financial resources to effectively spend on implementation of the Sustainable Development Goals and productive investment, calling on global financiers to consider reducing borrowing costs to ease debt burdens.  Looking ahead to the Economic and Social Council high-level political forum and the voluntary national reviews, he called for stakeholders’ concerted efforts to devise solutions on how to bridge financing between developing and developed countries, especially on reducing heightened borrowing costs, and prioritizing sustainability, particularly environmental sustainability.

ABDULLA SHAHID, President of the General Assembly, said the pandemic has altered the development trajectory for developing countries, with uneven impacts at best and tragic at worst — deepening political cleavages, social inequalities, and macroeconomic fragilities.  This is particularly the case for least developed countries, landlocked developing States and some middle-income countries, many of which risk losing an entire generation’s worth of hard-won development gains.  For countries in special situations, he stressed that short-term response measures to address inflation, vaccine inequity and gender equality gaps must be complemented by longer-term strategies that account for multidimensional vulnerabilities, with international support including increased investments, trade facilitation and reallocation of special drawing rights.

Shrinking fiscal space and debt burdens are major bottlenecks for development, he noted, requiring that debt sustainability, restructuring and transparency be prioritized, looking forward to the thematic debate on debt to be held in late May.  He called for full implementation of commitments in agreed-to multilateral frameworks, such as the 2030 Agenda for Sustainable Development, Addis Ababa Action Agenda on Financing for Development, the Paris Agreement on climate change and COVAX.  Countries in special situations must be placed at the centre of the recovery efforts of the international system, along with vulnerable middle-income States, as “the 2030 Agenda will be won or lost in these countries,” he said.

Access to long-term financing, including international public finance, lending by development banks and commercial financing, will enable countries to respond better to the crisis and recovery more sustainably, he continued.  “We need to build capacities, build stronger institutions and support better governance to ensure that financing for development is sustainable and stimulates growth,” he said.  Citing the importance of the tourism sector in providing livelihoods for hundreds of millions of people, he noted that he will next week convene a high-level thematic debate on how tourism can advance recovery for people, planet and prosperity.  One thing is clear:  the international community must strengthen efforts to shore-up support to prevent a vastly unequal global recovery.

AMINA MOHAMMED, United Nations Deputy Secretary-General, noting the challenges of an uneven recovery from the pandemic, the climate crisis, vaccine inequities, and with the war in Ukraine sending shockwaves through global food, energy and financial markets, said many economies are at the brink of a downward spiral of insolvency, cuts in critical investments, economic contraction and rising unemployment.  Stressing that the Sustainable Development Goals need urgent rescue, she said the Secretary-General established the Global Crisis Response Group on Food, Energy and Finance to ensure high-level political leadership; get ahead of “the perfect storm” of food security, energy and financing challenges; and implement a coordinated global response.  Turning to the Group’s recommendations for immediate action, she said finance must be mobilized quickly and flexibly from all sources.  The international community must fulfil its official development assistance (ODA) commitments and support rapid access to long-term sustainable finance.  International financial institutions must prioritize flexibility and speed, she said, adding that countries with strong external positions should channel their unused special drawing rights to others in need.

Urging the international community to address rising debt risks, she called on the G20 to reactivate the Debt Service Suspension Initiative for two years and reschedule maturity for two to five years.  Outlining other recommendations, she said new mechanisms to increase fiscal space, such as debt swaps, should also be explored.  Turning to pandemic recovery, she said full funding is needed for the COVID-19 Tools ACT Accelerator and its COVAX Facility, calling on countries to step up and share technical expertise and intellectual property to end the pandemic and strengthen resilience for the future.  Underscoring that half of climate finance should go to adaptation, she said national budgets and tax systems must also be aligned with the Sustainable Development Goals and the Paris Agreement; address greenwashing; and rethink incentives in the international financial system.  Developed countries should urgently fulfil their commitment to mobilize $100 billion annually for climate action in developing countries.  “The international financial system has deep pockets.  We have the capacity to make sure all countries get through this crisis with their development prospects intact,” she said, urging the forum to be ambitious and muster the leadership and political will to resolve the substantial financing challenges before it, salvage hard-won development gains and rescue the Sustainable Development Goals.

NISREEN ELSAIM, Chair of the Secretary-General’s Youth Advisory Group on Climate Change, said she spoke with a huge burden, representing all young people and their aspirations, but especially those with no hope but for the Sustainable Development Goals.  Young people feel they are falling far behind in reducing inequalities, many of them losing hope for development itself.  This is an urgent time in restoring trust, she said — with action, not just promises and speeches, that everything will be fine in achieving equity.  The pandemic was a huge shock to humanity, but “it did not start everything we are suffering from”, she said — it just increased inequality.

Building back better is very important, but so is addressing future pandemics — which, along with the situation in Ukraine, means this is the most crucial time for humanity, requiring action-oriented strategies and financing.  As a young person, unlike the Secretary-General and Deputy-Secretary-General, “we don’t urge you to do something right now because we are running out of time,” she stressed.  She demanded big steps for recovery and a better future, to restore hope that the world’s young people are dreaming of is happening.  As a Sudanese, she noted that countries like hers need good governance to fight corruption, to ensure financing for development goes to the right places.  The world is surrounded by challenges, but also many intelligent young people, who must be included in all strategies, given their innovative ideas.  “It’s time for action, and it’s now or never,” she demanded.

Panel I

In the morning, the forum held its first panel discussion, focused on the theme of “Financing the SDGs by increasing fiscal space for an inclusive and sustainable recovery”.  Opening with keynote addresses by Joko Widodo, President of Indonesia, and Pedro Sánchez, President of Spain, it was moderated by Achim Steiner, Administrator of the United Nations Development Programme (UNDP).  Featured panellists were Marjeta Jager, Deputy Director General for International Partnerships at the European Commission; Lia Tadesse, Minister for Health of Ethiopia; Matilda Ernkrans, Minister for International Development Cooperation of Sweden; Bounleua Sinxayvoravong, Deputy Minister for Finance of the Lao People’s Democratic Republic; and Bo Li, Deputy Managing Director at the International Monetary Fund (IMF); with lead discussant, Bhumika Muchala of the Third Word Network.

Mr. WIDODO said the pandemic has posed severe challenges for low-income and small island countries, with 38 low-income States reaching the “high risk” status for external debt burden.  Noting that the G20 has allocated $45 billion in special drawing rights for the most vulnerable countries, he affirmed that the Indonesia’s G20 presidency would continue that effort.  Digitalization, as well as the empowerment of micro-, small and medium-sized enterprises, women and youth, are key to enhancing new sources of growth.  For a more resilient supply chain, developing countries’ access to the global value chain must be increased.  Indonesia’s G20 presidency will advance international tax reform to support development.  Noting the potential of blended financing to fill the funding gap with respect to the Sustainable Development Goals, he noted that between 2005-2019, $131 billion of blended financing was mobilized, with total funding deals increasing by 1,124 per cent from 41 in 2005 to 502 in 2019.  His country is committed to promoting Sustainable Development Goals funding through blended financing, including through the Indonesia One SDGs scheme, green sukuk, and other instruments.

Mr. SÁNCHEZ said the unprecedented crisis due to the unjustified illegal war in Ukraine is causing even greater repercussions for those who have already suffered the most from the pandemic.  If the world has learned anything from COVID-19, it is the need for a stronger, more consistent multilateral system with United Nations at the centre to work towards the Sustainable Development Goals and the 2030 Agenda.  He noted that Spain is working towards allocating 0.7 per cent of its gross national income towards financing for development.

The international community must question how to increase the fiscal margin of the most vulnerable countries — facilitating their access to financing, reducing their costs and implementing adequate mechanisms to reduce debt.  He noted that Spain is voluntarily channelling 20 per cent of special drawing rights towards the fund set up.  The international community must also intensify progress towards the Sustainable Development Goals, working with public and private creditors, especially bilateral ones, on a case-by-case basis.  It is crucial to restructure capital markets, and to ensure countries will not be unfairly penalized for alleviating debt.  Without a sound fiscal basis, he stressed countries cannot sustain financing for development, expressing support for building more equitable fiscal systems.  He noted that debt and the Ukraine war have highlighted the importance of working towards the Addis Ababa Plan of Action.

Mr. STEINER, opening the panel discussion, said the international financial architecture is struggling to act in advance, on scale and with speed, to address worsening outlooks for the global economy, especially for least developed and vulnerable countries.  Noting the broad spectrum of lessons learned from the pandemic, he said that for many countries, debt distress could become an existential challenge, calling on Member States to reflect on how they and financial systems can better respond adequately and quickly to multidimensional crises.

Ms. JAGER cited the drastic consequences of the pandemic and the war in Ukraine on financing for development, driving an uncertain global outlook.  In working together, she noted the European Union and its Member States have shared over 464 million doses of vaccines to low- and middle-income countries and are set to secure 700 million by mid-2022 — but speedy delivery is paramount.  She said that the Union is the lead contributor to the COVAX Facility, providing €5 billion in cash and loans.  She announced publication of the European Union Investing in Sustainable Development Report, providing a clear picture of contributions to financing for development.  She noted the European Union is leading efforts on international debt relief for the most vulnerable countries, citing the Addis Tax Initiative as an important milestone in advancing domestic revenue mobilization.  Emphasizing that the European Union is the world’s largest donor in grant budget support, she stressed that the private sector is also crucial in attracting foreign investment and increasing fiscal space through taxation.  “We need global solidarity,” she said.

Ms. TADESSE said the last three years have been very difficult for Ethiopians as they have tried to cope with the pandemic, fiscal issues, conflict, drought, flood and other challenges that have led to loss of lives and livelihoods.  Although more than 29.4 million vaccine doses have been administered in Ethiopia, she said this figure is far from the target of a 70 per cent vaccination rate by mid-2022, stressing the need to ensure access to these medicines for all.  Given the potential for an increase in shocks, the international community must work together to prepare countries for increased volatility in fiscal policy and space.  The pandemic and other challenges have reduced economic activity and led to dwindling tax collection and narrow fiscal space, while the health sector faces increased expenditures to address the pandemic.  In that regard, significant development assistance is needed to commit additional resources at long-term and ultra-low interest rates.  A more comprehensive regional financing operational arrangement is required to increase emergency liquidity for developing countries, she said, noting the important role of regional platforms like the Africa Centres for Disease Control and Prevention and their resource envelopes.  Noting the need for strengthened capacities in technology, innovation and local manufacturing, she said countries should create an enabling environment for investors and public-private partnerships in priority sectors.

Ms. ERNKRANS said poverty, inequality and increasing debt levels in low-income countries have been exacerbated by the pandemic and risk being worsened by global insecurity caused by the Russian Federation’s invasion of Ukraine.  The pandemic is also a reminder of the importance of a whole-of-society perspective.  Sweden has provided flexible funding to several international organizations to help them address the pandemic and its consequences, as well as large contributions to global vaccine access made with sustainability in mind, allowing COVAX to frontload funding, which her country provides over a 10-year period.  Citing record debt induced by the pandemic, she stated that a time of tightening financial conditions poses grave risks to vulnerable countries.  Domestic revenue mobilization is a key component, while effective taxation can help finance social security, tackle inequality and assist the resilience of nations.  Corruption is a major threat in building trust in societies, she said, requiring stronger efforts against it.  States must develop private sectors, creating decent jobs and paying taxes.  However, despite efforts to increase the mobilization of private capital, levels of private investment remain insufficient, she said, requiring new innovative partnerships.  Sweden will deepen its feminist foreign policy, she noted, including focusing on women’s economic empowerment.  Her Government stands by the commitment to earmark 1 per cent of gross national income to international development cooperation, and calls on the Member States to honour pledges of at least 0.7 per cent of gross national income for ODA.

Mr. SINXAYVORAVONG said the pandemic led to a sharp decrease in his country’s domestic revenue, forcing it to cut expenditures and hindering implementation of the Sustainable Development Goals.  Also, it faces difficulties in accessing financial markets to raise funds for the repayment of debt, as well as increased interest rate expenditure as a percentage of domestic revenue, which has increased from about 7-8 per cent to more than 15 per cent in 2021, drying out funds for development.  In 2022, his country faces other unexpected challenges, such as high oil and food prices, further affecting its economic growth.  In that regard, his Government has approved an economic recovery plan, prioritizing expansion of the service sector, promoting exports and reopening of the mining sector to mobilize resources for development.  The plan also aims to improve revenue administration by digitalizing tax administration to widen the tax base and reduce tax avoidance and evasion, he said, calling on the international community to increase cooperation on tax administration and share expertise on capacity-building.

Mr. LI said low-income developing countries, due to pandemic and economic shockwaves from the war in Ukraine, face an even steeper climb, with tighter fiscal space, and urgently need help.  He noted that pre-pandemic, IMF estimated most developing countries required much more external financing in health, education and infrastructure — notably an annual increase of 15 per cent of their combined gross domestic product (GDP) in 2030 — and the pandemic has made the situation much worse.  The IMF examined four countries and found they may need annual spending of over 14 per cent of GDP to reach the 2030 Agenda — 2.5 percentage points higher than before the pandemic.  Even with reforms, those countries can only fill half of the financing gap.  He called for domestic reforms to boost economic growth and improved spending efficiency and attracting more private financing by improving the business environment.  Support from the donor community is needed, as pre-pandemic financing was about half the United Nations target of ODA of 0.7 per cent of gross national income.  Meeting that figure would allow low-income countries to achieve the Goals by 2030 or soon after — but without increased external financing, this may be delayed by a decade, he said.  Research makes clear that “we can still achieve them if we step up”, he said.

Ms. MUCHALA said a systemic approach for global governance has never been more urgent.  A convergence of crises from the pandemic, war, economic downturn, food insecurity, climate change and gender inequality engulf the world and seriously threaten the Sustainable Development Goals.  Throughout the pandemic, liquidity provision and fiscal space for most developing countries has been severely shortcoming, although the lion’s share of 650 billion issuance of special drawing rights (SDRs) went to countries that needed it the very least, due to inequitable IMF quarter allocations.  Nonetheless, special drawing rights have been an effective response for pandemic recovery in developing countries.  However, a more systematic consideration of special drawing rights is required both as an instrument for responding to global crises, as well as to address asymmetries in monetary and fiscal support tools between developed and developing countries.  She said civil society urges developed countries to rechannel their unused special drawing rights and allow for more equitable allocation formulas.  She also called for a new allocation of SDR 2.5 trillion given the continuing impacts of the pandemic, as well as the war in Ukraine, stressing that the forum is well placed to develop proposals for broader use of special drawing rights for development and climate finance.

The representative of Colombia, speaking on behalf of the Like-Minded Group of Countries Supporters of Middle-Income Countries, stressed the need for concessional, non-concessional and blended finance to address the multidimensional challenges of sustainable development that go beyond per capita income.  Therefore, it is critical to advance a realistic assessment of implementation of current global initiatives to address debt sustainability and liquidity needs, namely:  the Debt Service Suspension Initiative, the Common Framework for Debt Treatments and the approval of SDR 650 billion.  The international community should consider expanding support of available debt treatment programmes beyond these initiatives to highly indebted developing countries to fairly address their needs.  He called for a joint conversation with international financial institutions to consider the temporary adaptation of fiscal risk criteria applied by credit-rating agencies to the unprecedented circumstances of the pandemic.

Citing challenges including strained health and education systems, indebtedness, refugees and displaced persons and other issues, he stressed that the current food security crisis is exacerbating socioeconomic challenges.  Developing countries, especially those with limited fiscal space, require the international community to adopt a systemic approach that enables them to access additional sources of financing, going beyond GDP.  He called for urgent complementary measures of progress in bilateral and multilateral channels of financial cooperation, including in multilateral development banks.  These measures are not going to be enough, however, without universal vaccination.  Despite global efforts to achieve vaccine equity, he noted the world will likely not meet the target to vaccinate 70 per cent of the population of every country by mid-2022.

The representative of the Philippines said prior to the pandemic, his Government had a strong position, introducing tax reform programmes, broadening the tax base by taxing sugary drinks and electronic cigarettes, and other measures.  Improved tax compliance is providing the Government with a tailwind to keep the country’s economy afloat, he noted.  Robust cooperation by multilateral partner institutions has also greatly helped procure vaccines, with COVAX allowing the poorest countries to access them.

The representative of the Food and Agriculture Organization of the United Nations (FAO) said the pandemic showed the international community the impact of underinvestment in the one health approach, which recognizes the interdependence of the health of humans, animals, plants and the environment.  Stressing the manifold return on investment of the one health approach, and its impact on ecosystems and biodiversity, he said FAO, World Organization for Animal Health, the United Nations Environment Programme (UNEP) and the World Health Organization (WHO) have recently adopted a joint plan of action for greater investment at all levels, calling on all countries and streams of international finance to invest in the one health approach.

The representative of the NGO Committee on Financing for Development said that, although the pandemic derailed global efforts to achieve the Sustainable Development Goals, he was encouraged by commitments to support those in vulnerable situations, raise domestic resources, establish transparent and progressive tax systems and combat illicit financial flows.  However, based on his organization’s survey, findings indicate that commitments made on the global level are not translating effectively on the ground.  Noting that the neediest remain unempowered and lack capacity to demand entitlements, he called on Governments to invest in building the capacity of rights holders to claim their rights.

The representative of the Society for International Development, speaking on behalf of the Civil Society Financing for Development Group, including the Women’s Working Group on Financing for Development, said the spectre of volatile capital flows from developing countries and phasing out of quantitative easing policies requires that capital account regulations are a permanent policy tool.  The developmental role of the State to mediate between the logic of global finance and the economic and social rights of citizens is severely affected on multiple fronts — from a new age of fiscal austerity as debt defaults proliferate to the lack of consensus on core financial regulation tools for food and energy futures, and digital currencies.  Noting the systematic reform of international financial architecture requires a new international conference on financing for development, she urged Member States to agree to hold one.

Mr. SINXAYVORAVONG said that to overcome challenges, the international community must work together on international tax cooperation to ensure improved tax administration in poor countries and fair tax paid to them.  He also called for long- and medium-term debt relief.

Ms. ERNKRANS agreed, calling for a focus on building tax systems, as well as creating decent jobs in the private sector.  With relevant frameworks already in place, the international community must remain focused on the 2030 Agenda, the Addis Ababa Plan of Action and the Paris Agreement.

Ms. TADESSE said the pandemic has taught lessons that could be leveraged going forward as countries face a multitude of challenges.  Stressing that working in solidarity is critical, she said it is important to look at the fiscal space, apply learnings from vaccine delivery, and align policies and solutions for the achievement of the Sustainable Development Goals.

Mr. STEINER said that as a global financial system, the international community has the means to respond.  However, its capacity to respond with the current international financial architecture remains a major challenge.  UNDP had estimated that if low-income countries had the same vaccination rate as high income States — around 54 per cent in September 2021 — their GDP would have increased by over $16 billion.  Noting that there are windows of opportunity, such as the forum, for Member States to act by design, rather than panic by default, he said the spotlight must be turned on countries who, through no fault of their own, face a situation of going into default, urging those who have the means to mobilize finance.

Panel II

In the afternoon, the forum held its second panel discussion, focused on the theme of ““Aligning the global debt architecture with the SDGs:  What will it take?”.  Opening with a keynote address by Keith Mitchell, Prime Minister and Minister for National Security, Public Administration, Home Affairs, Information Communication Technology and Minister for Finance, Planning, Economic Development and Physical Development of Grenada, it was moderated by Rebeca Grynspan, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD).  The afternoon panellists were Aiyaz Sayed-Khaiyum, Minister for Economy, Civil Service and Communications of Fiji; Abdulaziz Alrasheed, Assistant Minister for International Affairs and Macro-fiscal Policies of Saudi Arabia; Werner Hoyer, President of the European Investment Bank and Chair of the Multilateral Development Banks; and Clay Lowery, Executive Vice-President for Research and Policy at the Institute of International Finance; with lead discussant, Iolanda Fresnillo of Eurodad.

Mr. MITCHELL said the world is at critical juncture in its collective aim to recover from the socioeconomic crisis due to the pandemic, as well as the devastating impacts of climate change.  These conditions are exacerbated by geopolitical conflict and the consequences on energy and food insecurity, seriously affecting countries’ ability to achieve the Sustainable Development Goals.  Fiscal space is shrinking for many, limiting their ability to recover, with global public debt rising from already elevated levels, he said, stressing:  “The debt crisis is now at our doorsteps.”  Small island developing States are also struggling with higher interest rates, credit rating downgrades, de-risking and persistent revenue shortfalls.

Grenada and other Caribbean Community (CARICOM) States are vulnerable to shocks, he noted, experiencing amplified debt challenges and marginalization of debt assistance.  GDP per capita does not reflect the true vulnerability of small island developing States, he emphasized, recommending the convening of a high-level panel of experts on the multidimensional vulnerability index by the end of 2022.  It is also important to access concessional financing and grant funding to expand fiscal space to face developmental challenges and improve access to the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative.  He called for coordination with private creditors on debt restructuring and resolution, further citing innovative solutions like debt-for-nature swaps.  He emphasized that the international community must take critical steps now to achieve collective goals based on the bedrock principle of leaving no one behind.

Ms. GRYNSPAN warned that a systemic debt crisis could be unfolding, with the inflation level at a multi-decade high and instances of civil unrest brewing in various parts of the world.  It is expected that market conditions will tighten further as central banks increase interest rates, stressing the debt of many developing countries, due to factors out of their control. UNCTAD’s 2020 Trade and Development Report highlighted the magnitude of developing countries’ external debt, which doubled from 2011 to 2020, rising to almost 70 per cent of gross domestic product. It is utmost importance to reform a global financial architecture that is currently ill-suited to address daunting challenges faced by developing countries.  The international community thus must discuss what can be learned from past debt relief initiatives.  It must also consider steps that could be taken to facilitate fair and efficient write-downs, when necessary, to give countries greater room for investing in sustainable development.  Actions that could be taken by multilateral and official bilateral creditors to encourage private sector participation in debt renegotiations should be examined and the existing scope to address the procyclicality of sovereign credit ratings should be reviewed.

Mr. SAYED-KHAIYUM said Fiji was the first nation to sign the Paris Agreement, with cyclones since wiping out half the country’s GDP and further harm due to the pandemic and the war in Ukraine.  Fiji assisted its people to avoid them being driven into destitution by the combined crises and is now being punished by a system of debt architecture that was never built to serve their needs.  Developing countries on average spend five times more than developed to service their debt — a fundamental injustice at the heart of the global financial architecture.  The architects of that system perpetuated a centuries-old model for a system serving old dynamics of power.  Ignoring the vulnerabilities of former colonies only worsens the consequences for them, he said.  While Fiji borrowed hundreds of millions of dollars to deal with the pandemic, the country successful negotiated low-cost loans.  However, some 10 per cent of its debt burden is owed to climate disasters alone.  Fiji’s debts are sustainable, he said, but there is a serious flaw in the use of such crude analytical tools as the outdated debt-to-GDP ratio.  “The cost of debt is changing, so why isn’t our thinking?” he asked.  In 2018, he noted Fiji was the first emerging economy to issue a sovereign green bond and is building resilient coastal ecosystems and looking to establish the world’s first climate catastrophe response force.  “Big global solutions always start small,” he said, calling for the IMF and the World Bank to explore debt-for-nature swaps.

Mr. ALRASHEED said that as the pandemic unfolded during Saudi Arabia’s G20 presidency in 2020, addressing the urgent liquidity needs of low-income countries became a priority.  Accordingly, the historic debt service suspension initiative was borne in April 2020 when the G20 supported the time-bound suspension of debt servicing.  Recognizing the scale at which the pandemic structurally affected debt sustainability of the most vulnerable countries, the G20 endorsed the Common Framework for Debt Treatments.  Yet only a few have requested to use the G20 Common Framework, likely due to the potential ratings downgrade, as well as the changing composition of creditors which also vary widely across countries.  The international community must act urgently and in a collaborative manner to facilitate the Common Framework, so it can truly serve as a platform that offers timely debt resolution for debt troubled countries in their time of need.  Facilitating the Common Framework includes ensuring better coordination and confidence-building among all stakeholders, as well as enhancing communications with eligible countries to explain the process and seek their views on how to improve implementation of the Common Framework and encourage more countries to participate.  His country remains committed to comprehensive improvement of the Common Framework through active engagement with all stakeholders.

Mr. HOYER said the Sustainable Development Goals and climate obligations must be pursued despite the pandemic, the war in Ukraine and other challenges.  There are huge infrastructure financing gaps around the globe, as well as in multiple domains.  “The very last thing the world needed was this war,” he stressed, with the Russian Federation’s brutal invasion of its neighbour not only causing suffering in Ukraine, but indirectly in the world’s poorest countries, harming food prices, indebtedness, and also driving up inflation and interest rates.  The rise in borrowing costs compounds risks over debt positions, with the World Bank estimating that over the next 12 months, up to 12 countries will default on their debts.  He recognized that many developing countries in which multilateral development banks operate are in difficulty on their external debt, and he looked forward to the implementation of the Common Framework for Debt Treatments to help them return to a sustainable debt position.  The establishment of a new IMF Resilience and Sustainability Trust is a welcome step, he noted.  There is a need to crowd in private investors to achieve the Goals, and more private capital can be mobilized.  He noted the European Investment Bank invented the first green bonds in 2007 — an idea that seemed lunatic at the time and is now over $1 trillion strong.  He stressed that greenwashing needs to be stopped, in order for investors to feel confidence.

Mr. LOWERY, noting that his organization represents private and public sector financial institutions, including central banks, asset managers and sovereign wealth funds, said the private sector has been working on efforts and principles for stable capital flows and fair debt restructuring.  He underscored the importance of fostering timely flow of information and a close creditor-debtor dialogue to maintain capital flows.  In cases where debt restructuring becomes inevitable, he said principals look at actions based on good faith and aim for a fair treatment of stakeholders.  With investors now requesting environmental, social and governance factors to be included explicitly in investor relations programmes and investment decisions, it is important to consider debt with linkages to sustainability, adding that this would help provide more stable capital flows and help borrowers avoid costly restructuring.

Ms. FRESNILLO, speaking for the Civil Society Financing for Development Group and the Women’s Working Group on Financing for Development, said the world cannot wait for financial markets to declare a systemic crisis.  Debt cancellation works — a just solution that many countries need today.  The international community must go beyond the Common Framework and voluntary principles; they did not work in the past and they did not work with the Debt Service Suspension Initiative.  In 2020 and 2021, billions of dollars went into investors’ pockets while poor countries struggled with the pandemic.  She called for the building of a new debt architecture, beginning with the creation of an open-ended intergovernmental working group under United Nations auspices, with a view to creating binding multilateral framework on sovereign debt crises resolutions.  That initiative should be followed with a financing for development conference in 2024 the latest.  Civil society may seem too idealistic, she said, but the reality is that the G20, IMF and World Bank have not provided the solution to the debt crisis and the United Nations is the only forum where global South countries can make their voices heard.

The representative of Costa Rica said that the pandemic has resulted in a large transfer of funds from the North to the South to take care of the budget needs of those States, and stressed that supporting the fiscal space of Latin American countries is an urgent need.

The representative of Indonesia said the pandemic has posed setbacks on efforts to implement the Sustainable Development Goals.  Noting that the lack of fiscal space has made it more challenging to repay debt, he said no single country can pull itself out of its current situation on its own.  Indonesia’s G20 presidency will aim to create room for investing in the sustainable development agenda and innovative financing.  It is important to the difficulties faced by least developed, landlocked developing and small island developing States who are facing difficulties related to debt suspension and relief.

The representative of Spain said the crises pressure both low-income and middle-income countries, requiring a global framework for restructuring sovereign debt.  There must be clarity on timelines, deadlines and the process, with the possibility of suspending debt servicing during negotiations.  Countries with unsustainable debt must request restructuring without delay, with guarantees on greater cooperation from credit rating agencies.  National initiatives should only be used as a last resort, he said.

The representative of the Russian Federation, responding to the President of the European Investment Bank, said that attempts to shift blame for the current food and energy crisis are pointless.  It existed two years ago, and current statements are being used for political purposes.  The Western countries’ trade war have lost them trillions of dollars, actions that collectively could be called neocolonialism.  Unilateral coercive measures limit supply chains, affect financial transactions and lead to spikes in crises.  The Russian Federation is not benefiting from the conflict, he stressed; it is also a victim.  He expressed hope that UNCTAD and other international organizations in the Secretary-General’s group will provide a more objective and balanced version of the report.

The representative of Malawi said the best solution to the unsustainable debt situation is total debt cancellation.  Tackling debt is like chasing a moving target, he said, considering the impacts of the pandemic, climate change and other challenges that lie ahead.  The promotion of private sector participation is needed for more sustainable and transformative programmes going forward.  Recognizing concerns arising from countries becoming careless and borrowing heavily in the past, he said Malawi makes a commitment to itself and to the international community that it will see more sustainable process going forward and that resources would be directed towards the Sustainable Development Goals and inclusive wealth creation.

The representative of Zimbabwe, underscoring the issues of limited fiscal space and the issue of digitalization, called on Member States to deliberate on ways to handle taxation with respect to digital transactions and the informal sector.

The representative of the Global Policy Forum, also speaking on behalf the Civil Society Financing for Development Group and the Women’s Working Group on Financing for Development, said there are no institutions to make debt cancellation possible.  Debt suspension and the Common Framework did not help, he said, calling for an intergovernmental working group and a legal framework.

The representative of the Civil Society Financing for Development Group and the Women’s Working Group on Financing for Development, said the poorest populations pay the debt, including children and women.  Creating a systemic, comprehensive and enforceable process for sovereign debt resolution through the United Nations has never been more urgent.  Noting that the global South pays the global North, she stressed that debt is not sustainable if it puts vulnerable groups at risk.

The representative of Gestos said financial vulnerability is one of the main drivers of inequality, human rights violations and depletion in health and public services, stressing the urgent need for a debt workout mechanism and the need to create conditions for debt cancellation.

Mr. LOWERY, expressing hope that the Common Framework will work, said the international community, including the private sector, needs to figure out the best way forward to ensure that stable capital flows are going to countries that need them.

Mr. ALRASHEED said the main objective of any debt treatment is to help indebted States to stabilize their financial position.  Writing down debt is a last resort as it affects countries’ credibility going forward.  He noted that the Common Framework is the only way out but would consider any initiative to strengthen its implementation.  However, there has been a shift in debt architecture, and major creditors today are not the same as 20 years ago, requiring different coordination.  Welcoming any initiative for a cross-country discussion within the United Nations, he stressed that debt issues should be free from being politicalized.

Mr. HOYER said the international community must develop steps to facilitate fair and efficient write-downs, when necessary, to give countries greater room for investing in the Sustainable Development Goals.  Moreover, environmental, social and governance considerations need not apply only to climate-related issues related to more developed countries.  The international community should try to further develop those instruments of bond issuance to other Sustainable Development Goals and to activities in low- and middle-income countries.

MS. GRYNSPAN, underscoring the strong calls for a new global financial architecture, said that the international community is facing an emergency.  In that regard, there is an urgent need to push instruments available now to be more fit for purpose.  The current financial system has many instruments, she said, stressing that with flexibility and political will within the current framework, many countries and people that are suffering could be helped to alleviate their current situation.

LIU ZHENMIN, Under-Secretary-General of the Department of Economic and Social Affairs, presented the 2022 Financing for Sustainable Development Report of the intergovernmental task force, highlighting the backdrop of unprecedented multidimensional crises.  However, such circumstances do not affect all countries in the same way.  Many countries are struggling to recover from the pandemic, while the war in Ukraine is pushing up energy and food prices.  Unless there is immediate action, the fight against inequality may be set back by a generation, pushing the Sustainable Development Goals out of reach.  It is crucial to provide access to stable affordable long-term financing, and for recipient countries to use those resources well.

He pointed out that developed countries can borrow on low interest rates, but that developing countries have faced significantly higher costs, causing a pandemic recovery gap.  Debt has reached critical levels, with 3 out of 5 of the poorest countries already in debt distress and billions of dollars spent servicing loans instead of supporting development efforts.  The Report provides important recommendations, including for developing countries to have access to concessional financing and for ODA commitments to be met.  Major central banks must be aware of the effects of their policy decisions on other countries, and the international community must step up efforts to resolve unsustainable debt situations.  Enhanced transparency will enable countries to better manage risks and resources.  However, countries must ensure that they use additional financing well, aligned with the Sustainable Development Goals and climate action.

General Debate

MARTA LUCÍA RAMÍREZ, Vice-President and Minister for Foreign Affairs of Colombia, speaking on behalf of the Like-Minded Group of Countries Supporters of Middle-Income Countries, said that a successful outcome of the forum must recognize the multidimensional challenges faced by all developing countries to implement their socioeconomic recovery plans under increasing fiscal constraints and debt burden; geopolitical tensions that impact the stability of global trade and the economy; and the climate, biodiversity and pollution crises.  In that regard, international cooperation must be substantially scaled up to meet the target of 70 per cent of the global population vaccinated by the middle of 2022.  Moreover, the financial gap of the ACT-Accelerator must be closed and the capabilities of low- and middle-income countries to access, distribute and manufacture vaccines against COVID-19 must be enhanced, she said, stressing that vaccines must be treated as global public goods.

Noting that access to concessional finance must be based on measures of progress that go beyond GDP, she called on Member States to advance in constructive discussions, so that vulnerability is used as a criterion to develop indicators that allow a more useful, efficient and effective allocation of the global financial flows.  Developing and applying those measures will contribute to better address multidimensional challenges faced by its group of countries, she said, such as strained health and education systems; high levels of indebtedness; large influx of refugees and displaced persons; and dependence on imports of food and essential medicines.  Noting the need for increased lending capacity and capital funding of the multilateral development banks, she said those institutions play a pivotal role in providing countercyclical support and allowing access to finance in terms below the market for middle-income countries.  Expressing concern that that 60 per cent of the countries downgraded by credit rating agencies are middle-income States, she said the criteria to define minimum fiscal risks should be adapted to the unprecedented circumstances of the pandemic.

SAULOS KLAUS CHILIMA, Vice-President of Malawi, speaking for the Least Developed Countries, said the international community is fighting with three “C” monsters:  the COVID-19 pandemic, conflicts and climate change.  The pandemic alone has pushed 77 million people into extreme poverty in 2021, not taking into account the effect of the war in Ukraine.  Inequality prevails in debt burdens and in access to vaccines, he said, insisting vaccine equity is a must.  Least developed countries face unsustainable debt burdens, with rich countries paying 3.5 per cent of their public revenue towards interest while developing countries pay 14 per cent.  With ODA and other assistance needed more than ever, he also urged developed countries to deliver on the $100 billion goal in climate financing.  Noting that international trade faces growing challenges, he called on the World Trade Organization to implement all decisions made in favour of least developed countries so that they can double their share of exports by 2021.  While welcoming the allocation of SDR 650 billion, he called for at least SDR 100 billion to be specifically designated for least developed countries.  Further, with 73 per cent of the population in those countries without Internet access, the digital divide must be closed, he stressed.

ARIEL HENRY, Prime Minister of Haiti, said it is time to review the way in which the international community allocates assistance to less developed countries, given weak results seen when compared with volume of investments.  Stressing the need for concerted global action, he said that given the limited possibilities for mobilizing further national resources, the international community should step up efforts to honour their ODA commitments and foster access to financing in the long term.  The situation faced by least developed countries is a critical one and the challenges they find before them have never been so great, he said, stressing that it is “high time” to rebuild more inclusive economies and ensure better access to financial systems, in order to achieve the Sustainable Development Goals by 2030.

Mr. CHILIMA (Malawi), speaking on behalf of the African Group, noted the pandemic did not create the financing gap in Africa, which was already standing at $2.5 trillion until 2030, but it has exacerbated the crisis.  Vaccine inequity must be urgently addressed, with the pandemic having also impacted other sources of development finance inflows.  In addition, the impacts of other exogenous events such as global climate change and security expenditures continue to worsen the financing capabilities of most countries on the continent.  It is crucial to come up with a financing ecosystem that addresses the plight of African economies, he stressed — rethinking from a moral perspective to facilitate concessional and grants financing, private sector financing, provide access to guarantees for micro, small and medium-sized enterprises, and produce innovative and inclusive models that can make more low-cost financing available for low-income countries.

He called for a universal United Nations intergovernmental tax body and a United Nations Tax Convention to comprehensively address tax havens, tax abuse by multinational corporations and other illicit financial flows, with broad rights holders’ participation.  Welcoming the establishment of the African Continental Free Trade Area, he called upon development partners to support efforts by African Governments to leverage it to push for market consolidation and create economies of scale.  It is also urgent to address access to international climate finance, particularly the $100 billion fund.

HALA EL-SAID, Minister for Planning and Economic Development of Egypt, said her country has been actively engaged in addressing systematic issues in financing for development.  Its recently launched first national report worldwide on financing development, prepared through a participatory process, presents an objective in-depth analysis of the various dimensions of financing for development and traces Egypt’s aspirations and endeavours towards achieving the Sustainable Development Goals.  In collaboration with the Joint SDG Fund, it is working on setting an integrated national financing framework for costing the implementation of the Sustainable Development Goals at the national level, identifying gaps in that regard and ways to address them.  Moreover, she said her Government adopts a two-pronged approach with respect to financing, notably through enhancing the efficiency of public investments, while also actively pursuing innovative financing mechanisms, such as issuing green bonds and Islamic sukuks.  It also prioritizes advancing of public-private partnerships mainly through Egypt’s Sovereign Wealth Fund.  Looking forward to the 2022 United Nations Climate Change Conference, her country will spare no efforts to deliver ambitious outcomes for financing a green transition — one that is centred on renewable energy, clean mobility, water and food security, and underpinned by increased private investment in green activities.

GRAMAJO VÍLCHEZ, Secretary of Planning and Programming of the Presidency of Guatemala, said the pandemic and tropical storms have affected progress on the country’s 10 national priority targets.  In 2021, the country invested $2 billion in education, with other investments in health, environmental and social protection, to guarantee recovery from the pandemic.  However, she noted the UNCTAD report of 2020 cited massive income loss due to illicit financial flows.  She called for partner countries and multilateral organizations to incorporate their assistance into the national strategies of developing countries.  In addition, any evaluation framework to prioritize cooperation must use updated criteria in line with the unique features of economic inequality within middle-income countries.

MATILDA ERNKRANS, Minister for International Development of Sweden, stressed the need to invest in a green inclusive transition ahead of the fifteenth meeting of the Conference of the Parties to the Convention on Biological Diversity and the twenty-seventh session of the Conference of the Parties to the United Nations Framework Convention on Climate Change.  Stockholm+50 will aim to connect climate with environmental action and with development priorities and accelerate implementation of joint commitments.  The principle of leaving no one behind requires tackling social, economic and gender inequalities, she said, adding that the international community must ensure vaccines reach everyone.  Also, there is a need to build inclusive systems for social protection and well-functioning taxation systems.  On the debt crisis, she highlighted the need to engage all creditors and let debt instruments be a system for green recovery.  New forms of partnership and financing are needed for sustainable private sector investment to support the Sustainable Development Goals.  Member States must fulfil their aid commitments to ensure flexible funding to the United Nations system, she said, affirming her country’s commitment to provide 1 per cent of its gross national income to ODA and to engage as a partner and investor in multilateral and collaborative solutions.

FLEMMING MØLLER MORTENSEN, Minister for Development Cooperation of Denmark, noted that 120 million people have fallen into extreme poverty.  The world cannot afford inaction, he stressed, noting that for 45 years, his country has provided 0.7 per cent of its annual gross national income to development aid — and will further contribute at least 1 per cent of the collective target of a $100 billion climate commitment for developing countries.  Funding must be used wisely to push the world in a green direction, he said, and since the beginning of 2022, Denmark no longer supports investments, activities or projects that promote fossil fuels in the energy sector abroad.

FRANZ MAYOT, Minister for Cooperation and Humanitarian Action of Luxembourg, said the fragile pandemic recovery, the impact of climate change and a spike in global food prices caused by the Russian Federation’s aggression against Ukraine threaten the progress made, particularly in developing countries.  In that regard, as Member States prepare for the Fifth Conference on the Least Developed Countries, dedicated support and efforts must be scaled-up to achieve the Sustainable Development Goals.  Luxembourg will continue to dedicate 1 per cent of its gross national income to official development assistance, with a particular focus on the least developed countries and the most vulnerable populations.  Recognizing that grant-based assistance alone is not enough to close the existing financing gap, Luxembourg is putting into practice innovative and inclusive finance approaches as a complement to traditional development funding.  Spotlighting its expertise in sustainable finance, including green, social and sustainability bonds, he said Luxembourg is working with United Nations partners and key stakeholders on the introduction of gender bonds to advance gender equality and women’s empowerment.

SOSTEN GWENGWE, Minister for Finance of Malawi, said his country has been affected by tropical storms, and recent events in the Ukraine-Russian Federation conflict have also affected its growth prospects as the global supply chain is disrupted.  Less productivity means fewer exports, he said, which affects its ability to service debt, requiring immediate intervention.  However, the country remains resilient, aiming to be a self-reliant economy by 2063, and meet most of the Sustainable Development Goals and graduate to a lower-middle-income country by 2030.  Malawi seeks development and private partners in supporting recovery efforts, looking to advance infrastructure projects and attract private capital.

SIMON CUEVA, Minister for Economy and Finance of Ecuador, said 2021 was a year of economic recovery for his country with the support of multilateral financial institutions.  Due to responsible fiscal programmes, it managed to sustain social programmes and extend coverage.  In September 2021, Ecuador adopted an opportunity creation plan for 2021-2025, with which all public policies and programmes must align and budgets at the State level must be determined.  Ecuador’s tax reform published in November 2021 aims to improve State income by increasing direct taxation and increasing tax gradually.  His country has also managed to mobilize resources, open new budgetary spaces and undertake green initiatives.

SUHARSO MONOARFA, Minister for National Development Planning and Head of National Development Planning of Indonesia, said the pandemic has posed broad challenges, requiring collective action, and when it assumes the G20 presidency, the country will work under the principle of “recovering together”.  Indonesia aims for economic transformation, while his country’s focus on the Sustainable Development Goal targets must remain unchanged.  International support must be encouraged and strengthened to drive economic activity, he said, especially in developing countries, including through innovative methods like blended financing — a key to their financial capacity.  The large-scale vaccine distribution gap must be reduced with efforts mobilized towards more preventive health efforts, he stressed, noting the vaccine rate in Indonesia has reach 58.8 per cent of the population, due to the provision of free vaccines.  Indonesia’s economy grew by 3.7 per cent in 2021 after a decrease in 2020, he noted expressing confidence that it is on track to become a high-income country by 2045.

ARKHOM TERMPITTAYAPAISITH, Minister for Finance of Thailand, stressing that a new economic approach is needed to address the global economic challenges, highlighted his Government’s strategy to promote its Bio-Circular-Green Economy model, which capitalizes on the country’s strength in biodiversity and cultural richness and employs innovation to turn it into a value-based and innovation-driven economy.  Regarding environmental, social and governance investment and financing, his Government has continued to issue the sustainability bond since 2020, to finance green infrastructure projects that help reduce CO₂ emissions, as well as social projects.  He also highlighted the public services reform policy to digitalize all paperwork to minimize unnecessary face-to-face contact between government agencies and people, as well as businesses.  In addition, the launch of a mobile application for cash transfers and co-payment programmes during the COVID-19 pandemic helped people and small businesses who lost their incomes.

RODOLFO SOLANO QUIRÓS, Minister for Foreign Affairs of Costa Rica, said multilateralism is not an option but a need if the international community is to recover and build back better to ultimately achieve a more equitable world.  His country has launched an ambitious initiative to create a special financial fund called FACE that will collect contributions from the most powerful economies of the world, which will be channelled to a multilateral bank to support economic recovery.  The proposal aims to emphasize the importance of guaranteeing access to international finance by guaranteeing concessional finance irrespective of a country’s income level and with no conditions attached.  Moreover, credit loans, grant financing, investments and other such instruments must be granted by donors in line with stringent criteria for sustainable initiatives and in line with the specific needs of countries to enable them to close structural development gaps.

ANITA VANDENBELD, Parliamentary Secretary to the Minister of International Development of Canada, said the world stands at a critical juncture with the compounding effects of climate change, the pandemic and debt worsened by the global food and energy crisis caused by the Russian Federation’s unwarranted invasion of Ukraine.  Developing countries struggle with where to allocate their limited resources, she noted, undermining decades of development gains.  Canada will work on helping them to access needed financing along with innovative homegrown solutions.  She noted that Canada has doubled international climate change commitments to $5.3 billion over five years, provided nearly $100 million under the Debt Service Suspension Initiative and will dedicate nearly $1 billion in support for the IMF’s Poverty Reduction and Growth Trust.  Expressing concern over how the war deepens the global food crisis, she pointed to a further $82 million for gender-responsive humanitarian assistance to address needs and help avert famine in the Sahel and Lake Chad regions.

CHRISTOPHER COYE, Minister of State for Finance, Economic Development and Investment of Belize, said the international community cannot talk of recovery in small vulnerable States like his, when “where we were before COVID is not a place where we want to return”.  The path to sustainable development has consistently been an uphill climb as small island developing States bear the increasing brunt of the economic effects of the pandemic and the climate crisis — choking off an already limited fiscal space.  Supply shortages and inflation on essential commodities, along with global political insecurity, only further exacerbate the challenges.  As countries fall deeper into debt, solutions are needed now, he stressed.  By addressing debt sustainability, the international community is also addressing the development agenda with people at its core.  He stated that small vulnerable developing States like Belize cannot engineer a green transformation while taking on more non-concessionary debt when they are already drowning in it.

SOLTAN BIN SAAD AL-MURAIKHI, Minister of State for Foreign Affairs for Qatar, said his country has adopted ambitious measures at the national level to implement the 2030 Agenda, enjoying remarkable success.  At the international level, Qatar is a crucial partner providing aid through bilateral and multilateral agreements to implement development projects and help facilitate the growth of other countries.  Committed to supporting the least developed countries, his State is proud to host the fifth international meeting of the United Nations on least developed countries, with the second part to be held in Doha in March 2023.  Recognizing the importance of innovative initiatives, Qatar is a key partner of UNDP contributing $20 million to its Accelerator Labs network, which supports innovative work to resolve pandemic-related challenges.

MARINA SERENI, Vice-Minister for Foreign Affairs and International Cooperation of Italy, said the war in Ukraine not only puts lives at risk, but also disrupts livelihoods, economies, food security and health worldwide — particularly in developing countries still struggling with pandemic recovery.  She noted Italy has contributed €385 million to the COVAX Facility and 50 million doses of vaccines, and during its G20 presidency, sponsored the Debt Service Suspension Initiative that helped relieve the effects of the pandemic.  In 2021, the country also supported an unprecedented general allocation of SDR 100 billion by the IMF to help countries most in need to cope with the pandemic.  She noted efforts must now turn to implementing the common framework at the country level.  With the climate crisis at a crossroads, developed countries must deliver on commitments, and Italy has pledged $1.4 billion annually for the next five years.

PILAR CANCELA RODRÍGUEZ, Secretary of State for International Cooperation of Spain, said the cost of financing for developing nations, particularly those with the greatest difficulty in accessing private financing, remains disproportionately high compared to the cost of financing for developed economies.  Given that the “lion’s share” of countries’ financial resources is, or should be, found in their tax systems, the international community must move forward with reforms in financing and in many other areas already established in Addis Ababa.  Noting that a strong, inclusive and coherent multilateral system is needed to overcome the COVID-19 crisis, she said Spain is committed to increasing its contribution to official development assistance to 0.7 per cent of GDP, with a view to making it a legal obligation.  Stressing the need to usher in a new social contract, she said the new contract must have gender equality and human-based approaches at its core, protect public health and close financial gaps without increasing inequality.