Delegates Focus on Poverty Eradication, International Financial Architecture Reform, as Second Committee Begins Its General Debate
Facing a cascade of climate disasters, conflicts and economic strains, the world is sliding backwards on poverty, hunger, gender equality and education — requiring immediate concerted action as the Sustainable Development Goals (SDGs) recede out of reach for developing countries - speakers stressed today as the Second Committee (Economic and Financial) opened its annual general debate.
Navid Hanif, Assistant Secretary-General for Economic Development in the Department of Economic and Social Affairs, affirmed that achieving the SDGs demands investment in systemic transformations — with special focus on small island developing States, landlocked developing countries and least developed countries. Developing countries do not have access to affordable financing at the required scale, meaning the Goals need a substantial investment push — both public and private. Urgent action is also required to significantly accelerate reforms in the international financial system, strengthening the meagre global financial safety net for developing countries, while enhancing their voice and representation in economic governance.
He called for stronger debt crisis prevention, and progress on developing a more effective debt crisis resolution mechanism. The Pact for the Future has laid the foundation for architectural changes, while countries can build on it during the Fourth International Conference on Financing for Development next summer. He noted that, despite progress in areas such as international tax cooperation and transparency, substantial challenges persist in fully addressing illicit financial flows. Further, “We must foster a global economy that unlocks the positive development of migration” with policies that make it safe, orderly and regular.
Professor Jeffrey Sachs, Director of the Center for Sustainable Development at Columbia University, in his keynote address via video link, noted that in achieving the SDGs, education is the single most important investment — especially for low- and lower-middle-income countries, because their scholastic completion rates fall far short of what is needed for economic success. However, “The problem for poor countries is clearly the money is not there within the national budgets,” he said.
He illustrated that when the finance minister of a low-income country with a $1,000 per capita income invests 20 per cent of the gross domestic product (GDP) in education, the entire budget is merely $200 per person — not enough to offer a basic education. By the “hard arithmetic of poverty,” the finance minister realizes either a tiny amount of money is spread over all children and nobody learns, or some is concentrated for a small proportion of the population and 20 per cent or 25 per cent reach upper secondary education completion.
The good news, he stated, is that for a low-income country, achieving sustained growth rates of 7 per cent or even 10 per cent per year is feasible if investment rates are adequate — which means “doubling GDP every 10 years”. However, access to funding is only available at exorbitant costly terms and very short maturities. This is a deep flaw in the current global financial architecture, as credit rating agencies’ methodologies do not understand that poorer countries have a higher growth potential than richer countries.
Further, “the IMF [International Monetary Fund] and the World Bank have it wrong”, as they tell finance ministers not to take on debt, rather than helping them to raise 30-year maturity loans at reasonable interest rates. If African kids graduate high school, there will be a transformation of the continent “economically before our eyes within 20 years,” he stated. Alongside 5G coverage and access to electricity, a definitive breakthrough to upper-middle-income status is possible within 30 years and high-income status within 40 years.
Muhammad Abdul Muhith (Bangladesh), Chair of the Second Committee (Economic and Financial), noted that it begins work after the Pact for the Future laid out “a unified vision for our world on many topics”: climate change, sustainable development and international financial architecture reform. Noting that the Committee will negotiate almost 40 draft resolutions on the general debate theme of “Fostering resilience and growth in an uncertain world,” he emphasized that the global economy is grappling with sluggish, uneven growth and rising geo-economic fragmentation.
In the ensuing debate, delegates expressed regional and bloc concerns under the session’s theme, with the representative of the European Union, speaking in its capacity as observer, highlighting its priorities. The first is concrete action to advance sustainable development, which includes accelerating financing for development. Second, the international community must address the triple planetary crisis of climate change, biodiversity loss and pollution. Urgent, collective action is required to fully implement the Paris Agreement on climate change and keep the 1.5°C temperature goal within reach.
Uganda’s delegate, speaking for the Group of 77 and China, stressed the need to eradicate poverty, still the greatest global challenge; reform the international financial architecture; and strengthen the participation of developing countries in international economic decision-making. Developing countries face challenges including external debt, which reached a record level of $11.4 trillion in 2022, requiring an urgent review of the sovereign debt architecture.
The representative of Chad, speaking for the Group of African States, noted that while real GDP on the continent has grown at 3.8 per cent annually over the past four decades, real GDP per capita has lagged behind. Foreign direct investment (FDI) to Africa declined by 3 per cent to $53 billion in 2023, representing only 3.5 per cent of global FDI. He reiterated the call to “turbocharge” the SDGs with a dedicated global fund to support developing countries, and reallocation of $100 billion of special drawing rights to Africa.
Echoing that urgency, Nepal’s delegate, speaking for the Group of Least Developed Countries, noted that over 380 million people in these countries were living in extreme poverty in 2023 — almost 15 million more compared to 2019. Six countries are in debt distress, 15 are at high risk and interest payments outweigh public health expenditures in 19. The average debt service burden for such countries stood at 12 per cent of Government revenue in 2023, the highest since 2000, while exports and Government revenues fell by around 6 per cent.
In a related vein, the representative of the Dominican Republic, speaking for the Like-Minded Group of Countries Supporters of Middle-Income Countries, said 62 per cent of the world’s poor live in those States — explaining the urgency of a systematic systemic paradigm shift. Effective, inclusive cooperation with middle- income countries is crucial in catalysing co-benefits for the developing world.
Samoa’s delegate, speaking on behalf of the Alliance of Small Island States (AOSIS), stressed that those countries have spent 18 times more in debt repayments than they receive in climate finance — while the annual cost of damages from hazards is equal to 1 to 8 per cent of GDP. She called on the international community to adopt urgent, effective measures to eliminate the use of unilateral coercive economic measures, which only “create undue hardship on populations”.
The representative of Botswana, speaking on behalf of the Group of Landlocked Developing Countries, noted that the second half of implementing the Vienna Programme of Action and the SDGs was marked by lingering impacts of the COVID-19 pandemic, climate change, geopolitical tensions, inflation and commodity price hikes. The international community must reinforce solidarity and reaffirm its commitment to those States “to help them not only recover from the effects of global crises but also leapfrog our economies towards 2030, and beyond”.
Similarly, Iraq’s delegate emphasized the importance of international solidarity and multilateral cooperation in resolving current crises and achieving the 2030 Agenda. He stressed the importance of facilitating access to financing through international development banks, adding that any solutions to climate challenges must consider the needs of developing countries.
Meanwhile, Argentina’s representative stressed the need for an effective international financial architecture, in which middle- and low-income countries can access development financing under favourable and flexible conditions. He also called for strengthening the rules-based system in the World Trade Organization (WTO) to reverse imbalances in agriculture, which will ultimately contribute to food security and address environmental degradation.
Addressing climate change, New Zealand’s delegate, also speaking for Canada and Australia, noted that in much of the world, including the Pacific and Caribbean, that issue remains the single greatest threat to livelihoods, security and wellbeing. The international community must respond urgently to that global challenge of climate change, fulfilling commitments under the Paris Agreement, and accelerate mitigation and adaptation efforts.
Echoing that, Grenada’s delegate, speaking for the Caribbean Community (CARICOM), noted that “our inherent vulnerabilities, including small size, remoteness, climate change impacts, biodiversity loss and narrow resources, mean that progress for many continues to be hampered”. He recalled the severe impact of Hurricane Beryl on the northern parts of Grenada, Saint Vincent and the Grenadines, Barbados and Jamaica in July — which broke several records including the earliest Category 4 hurricane ever recorded in a hurricane season.
Also on climate change, the representative of Lao Peoples Democratic Republic, speaking for the Association of Southeast Asian Nations (ASEAN), noted that the bloc aims to uphold the principle of equity and common but differentiated responsibilities and respective capabilities in light of different national circumstances. It is also working to enhance disaster resilience by strengthening the alignment of national and regional disaster management frameworks, and improving disaster management capabilities.
Turning to terrorism, Yemen’s delegate underscored hindrances to development posed by the Houthi group, saying more heed must paid to countries in conflict, supporting them with resilience mechanisms. Emphasizing that the Houthis have destroyed Yemen’s economy and created a large-scale humanitarian crisis, he called on the international community to support reconciliation and rebuilding, as well as offering technical support for damaged basic infrastructure, including education and healthcare.
The representative of Israel noted that today marks exactly a year since Hamas invaded his country with the aim of genocide — not resistance or a two-State solution, and with the most inhumane means such as mass murder, sexual violence and kidnapping. While 101 innocent hostages remain in Hamas tunnels, with no sign of life provided, the international community must unequivocally demand their immediate unconditional release. However, “in these difficult times, we remain fully committed to the vital work of this Committee”, and together with global partners, Israel will continue to promote sustainable development, the eradication of poverty and gender equality during this session.