United Nations Secretary-General António Guterres, the best Minister of Canada, Justin Trudeau and the Prime Minister of Jamaica, Andrew Holness, will convene world leaders and international organizations today inside a joint initiative to sharpen and accelerate our global response to the significant economic and human impacts of COVID-19, and advance concrete solutions to the expansion emergency. This pandemic requires a large-scale, coordinated, comprehensive multilateral reaction to support countries in need of assistance, enabling these to recover better for more prosperous and resilient and inclusive economies and societies.
With more than 50 Heads of State and Government participating, the High-Level Event on Financing for Rise in the Era of COVID-19 and Beyond is easily the most inclusive gathering of nations to pay attention to the socio-economic recovery and financing needs in the pandemic. We must continue to coordinate these efforts to avoid a devastating impact on people's lives and livelihoods. All of us face economic strain in answering this pandemic, particularly low- and middle-income countries, many of which are seeing their efforts to achieve the Sustainable Development Goals (SDGs) set back.
The High-Level Event examines six urgent areas of action to mobilize the financing required for the response and recovery. These include expanding liquidity across the global economy; addressing debt vulnerabilities; stemming illicit financial flows; increasing external finance for inclusive growth and job creation; and techniques for countries to recover better, achieve the SDGs, address global warming and restore the total amount between the economy and nature.
“The pandemic has demonstrated our fragility,” said UN Secretary-General Antonio Guterres. “We have been in an unprecedented human crisis, because of a microscopic virus. We need to respond with unity and solidarity, and a key facet of solidarity is financial support.” Jamaica's Pm Andrew Holness said “the COVID-19 pandemic demands that people act right away to address its impacts on the economies of countries, in every region around the globe and at every stage of development.” He added he welcomes the six thematic regions of focus, such as the “necessity to deal with the urgent need for increased liquidity, designed for low- and middle-income countries.”
Canada's Prime Minister Justin Trudeau asserted “all countries are being tested through the COVID-19 pandemic, and it threatens to undermine our hard-won development gains. We know the best way to help all our people and economies rebound would be to interact like a global community. We want to support collective and individual actions to enable a recovery that leads to more inclusive, sustainable and resilient economies, where no one is left behind.”
The price of the pandemic
World Health Organization (WHO) figures show that the COVID-19 pandemic has claimed more than 340,000 lives, using more than 5.4 million cases globally. Unless we act now, UN projections indicate that the pandemic could slash nearly $US8.5 trillion in the global economy within the next 2 yrs, forcing 34.3 million people into extreme poverty this season, and potentially, one more 130 million people during this decade. Failing companies are already causing a surge in unemployment. The International Labour Organization (ILO) expects that global working hours in the second quarter of 2023 is going to be 10.5 per cent lower than prior to the crisis, equal to 305 million full-time jobs. Women are particularly affected, because they are overrepresented in sectors that have been the most affected with initial job losses. They are also the majority of those used in the informal sector globally and on the whole have a tendency to hold less secure jobs with fewer protections, less savings, and are more likely to live in, or near to, poverty. The pandemic causes economic distress even just in countries that have not yet experienced the impact in good sized quantities. Falling exports and growth are rapidly undermining the debt sustainability of many developing countries, specially those that are heavily dependent on commodities, tourism revenues or remittances. Growing debt distress poses an enormous challenge to those countries, further constraining their ability to implement stimulus measures. Even before the outbreak from the pandemic, nearly half of all least developed and other low-income countries were in, or close to, debt distress. Debt servicing costs for these countries a lot more than doubled between 2000 and 2023, to 13 percent of presidency revenue, and reached more than 40 percent in a quarter of all Small Island Developing States (SIDS). Effective domestic resource mobilization is going to be crucial for rebuilding economies. Yet trillions of money is regarded as locked in undeclared offshore financial holdings. The cost of money laundering has been estimated around $US1.6 trillion a year.
Meeting the challenges
In the face area of the unprecedented health, social and financial crisis, many governments around the globe have rolled out large fiscal stimulus measures equivalent to an estimated 10 % of national gross domestic product (GDP). But most developing economies are finding it difficult or impossible to apply sufficiently large fiscal packages, that have to date averaged less than 1 percent of the GDP. In April 2023, the G-20 agreed to suspend debt service on bilateral official debt to 76 low-income developing countries to increase liquidity to handle the impacts from the crisis. The International Monetary Fund (IMF) offered further debt service relief to 25 of the poorest countries, and also the World Bank continues to be coordinating with regional banks to go over COVID-19 support, joint initiatives, co-financing, and ways to maximize net flows to the poorest and many vulnerable countries. But far more is needed, and quickly. The High-Level Event will discuss a wide range of inclusive solutions, seeking input from the countries feeling probably the most impacted.
Rebuilding sustainably
In the first containment and crisis phase from the pandemic, nations have prioritized the healthiness of people before turning to the economic and labour market consequences. As each nation charts its very own course to recovery, countries are seeking to limit the economic fallout if you take steps to protect enterprises, jobs and incomes, and also to stimulate the economy, and to do so in a manner that protects women and families, young people, and also the most vulnerable in our societies. We must raise our ambitions to be able to recover better, by building more prosperous, inclusive, resilient and sustainable economies and societies. Countries can't afford to leave unattended the actual fragilities fundamentally of our current economic and social systems. We can't wish away systemic risks, from the climate crisis to high and chronic inequality. Everyone will benefit when we address these risks by investing up front. The Event includes a High-Level Segment in which Heads of State and Government will express their commitment to finding multilateral solutions to the global economic crisis and its effects around the most vulnerable. Additionally, a High-Level Panel of leaders from international institutions will talk about the difficulties and opportunities for urgent, decisive action. Following the Panel, the High-Level Segment among Heads of State and Government, and partners continues.
Six critical regions of focus
The Event will also launch a collaborative effort to enable discussions on concrete proposals to overcome challenges in six areas, and progress is going to be reported back in the margins of the High Level Political Forum in July, the overall Assembly in September, and at no more the entire year which include:
- The have to expand liquidity in the global economy and maintain financial stability to safeguard development gains.
- The need to address debt vulnerabilities for all developing countries to save lives and livelihoods for vast amounts of people around the world.
- The need to create a space by which private sector creditors can proactively participate in effective and timely solutions.
- Prerequisites for enhancing external finance and remittances for inclusive growth and creating jobs.
- Measures to grow fiscal space and foster domestic resource mobilization by preventing illicit financial flows.
- Ensuring a sustainable and inclusive recovery by aligning recovery policies using the Sustainable Development Goals.
The outcomes of the High-Level Event include the formation of six discussions groups, a collaborative effort that is aimed at providing concrete proposals by mid-July. There is no time to lose. Solutions cannot wait, and decisive action is required.
