BRIDGETOWN, Barbados (CMC):
The United Nations Secretary-General Antonio Guterres on Monday warned that the recovery from the coronavirus (COVID-19) pandemic must be sustainable and inclusive, unveiling “an urgent four-point debt crisis action plan”.
Addressing the 15th session of the United Nations Conference on Trade and Development (UNCTAD) here, Guterres warned that the pandemic is putting decades of development progress at risk and urged greater support for vulnerable nations, as they tackle the challenges of debt distress, lack of investment, unfair trade and the climate emergency.
He supported the call for vaccine equity, adding it is but “the first step in a much longer race”, and that an uneven recovery is leaving much of the world behind.
“We need to turn this around with a bold, sustainable and inclusive global recovery,” Guterres said, adding “one that benefits the many, rather than the few.
“One that delivers hope to people – and healing to our planet. And one that levels the playing field for all countries as they support their people during this extraordinary moment in history.”
He said countries cannot build back from the pandemic if they are held down by debt, describing it as “a dagger through the heart of global recovery”.
While welcoming the recent issuance of US$650 billion in Special Drawing Rights (SDRs), a type of foreign reserve asset created by the International Monetary Fund, he appealed for “a quantum leap in support”.
Guterres told the meeting that his four-point debt action plan calls for reallocating unused SDRs to vulnerable countries, including middle-income nations, and for the G20 wealthy economies to extend their debt suspension initiative, established in May 2020, through next year.
The secretary-general also reiterated his call to reform “the international debt architecture”, particularly for middle-income countries, to examine innovative measures such as debt swaps, buybacks and exchanges.
“Fourth and finally, we need private finance to help fill the gap. It is deeply unfair that rich countries can borrow cheaply and spend their way to recovery, while low and middle-income countries struggle to keep their economies afloat.”
PEOPLE ABOVE PROFITS
He said that with the COVID-19 pandemic putting development at risk, countries must be supported in making “bold investments” in education, social protection, healthcare and decent work.
“We need to put people above profits, including through fair tax burdens, and ending tax evasion, money laundering, and illicit financial flows,” he said, speaking in French.
In this regard, the G20, the UN and international financial institutions should work with the Organisation for Economic Cooperation and Development (OECD) to push forward in implementing a global framework for corporate taxation so that “taxes benefit people in places where economic activity actually happens. In communities – not distant boardrooms”.
Guterres said that the world’s poorest countries should also benefit from trade and investment, both of which have been derailed by the pandemic.
“We need open and fair trade rules, so all countries can compete on a level playing field no matter their position on the development ladder. And we also need to help developing countries modernise their infrastructure and trade flows – reducing costs and increasing efficiencies.”
He said these measures are vital to support countries as they transition to “green” economies, grounded in renewable energy, which also entails modernising the transport sector, particularly the vital global shipping industry, responsible for some 80 percent of trade.
Guterres said that building a global green economy is the fourth challenge the international community faces, as the countries strive to minimize global temperature rise, in line with the Paris Agreement on climate change.
He urged commitment to achieve carbon neutrality by mid-century through measures such as phasing out subsidies for fossil fuels. Richer countries were also reminded of their decade-old promise to provide US$100 billion annually in climate finance to support the developing world.
“For countries like Barbados on the front lines of the climate crisis, adapting and building resilience is not a luxury – it is an urgent priority,” the secretary general said, underlining the need to fund adaptation.
“So, today, I repeat my call to donors and multilateral development banks to allocate at least 50 per cent of their climate support towards adaptation and resilience.”
The UNCTAD ministerial conference, which takes place every four years, is a platform for dialogue on key and emerging issues affecting the global economy, and Gueterres described it as “the Olympics of trade, development, investment, policy and technology discussions”.