2022 International Think Tank Forum
Remarks by Siddharth Chatterjee, UN Resident Coordinator in China (pre-recorded)
A recording of these remarks can be found on YouTube and Tencent Video
Distinguished Guests,
Ladies and Gentlemen,
Greetings,
I thank the Counsellors’ Office of the State Council of China for the invitation to address the “2022 International Think Tank Forum” on the topic of the “Current Macroeconomic Situation and Policy Coordination.”
I also congratulate this Forum for bringing together leaders from diverse institutions to share their thoughts on how we can address global challenges, and accelerate the implementation of the 2030 Agenda for Sustainable Development, including through the potential of the Global Development Initiative (GDI).
Today, global economic recovery remains fragile and uneven amid the lingering impacts of the COVID-19 pandemic. The global impact of the pandemic severely reduced many components of human development, including health, income and education. We are also seeing the pace of the recovery slow substantially, with reduced projections in both global economic growth and trade flows.
This tepid recovery from the pandemic has been exacerbated by the macroeconomic impacts of the war in Ukraine. While not the sole cause of the current macroeconomic climate, the war in Ukraine has led to a global spike in energy prices, which is particularly concerning as we enter winter in the northern hemisphere. We also see high inflation rates in much of the world, particularly for key food items, as a result of Ukraine and Russia being critical global suppliers of cereals and fertilizers; and a tightening of monetary policy by Central Banks in much of the developed world, increasing borrowing costs and devaluing exchange rates in many developing countries.
The current economic challenges arise in a situation where progress on eradicating poverty, ensuring universal access to social protection, and transitioning to greener economic models was already lagging behind the necessary pace for us to achieve the Sustainable Development Goals (SDGs) and fulfil the commitments of the Paris Agreement on Climate Change.
Conventional wisdom has generally promoted economic growth as the best, and, in many cases, the sole solution needed to reduce problems like poverty, hunger and unemployment.
Not only has this idea that economic growth is a panacea for solving these social issues been proven false, but we have also seen how this development model has been accompanied by terribly high costs, such as greenhouse gas emissions, biodiversity loss and pollution, leading to an environmental crisis that disproportionally impacts the same people (those in poverty, other vulnerable groups) that we were hoping to help, while also destroying our ability to achieve the SDGs.
Given the challenging macroeconomic conditions we currently face, how can we create an economic policy environment that will promote inclusive and sustainable development and provide developing countries with the tools and support they need for the world to achieve the commitments outlined in the 2030 Agenda?
First, and most importantly, we must view the pandemic as an inflection point in our thinking and planning and resist the temptation to return to the same development models and frameworks promoted in the past. We must ensure that the macroeconomic decisions developed countries make do not inadvertently lead to negative repercussions in developing countries.
For example, the recent tightening of interest rates in much of the developed world is leading to increased borrowing costs for many developing countries, making it even more expensive for them to finance needed programmes and investments.
As Mr. António Guterres, the Secretary-General of the United Nations recently stated, “Developing countries are drowning in debt, with no fiscal space or access to financial resources to invest in recovery. We need urgent action on debt to increase liquidity and easy the pressure on developing countries. Credit and financing facilities, both public and private, need to go into crisis mode.”
In addition to working to resolve issues around debt, a refocus on the entire financing for development architecture, more broadly, is needed if we hope to achieve the SDGs. Based on analysis from the United Nations Sustainable Development Group in 2018, financing from public and private sources of between 3.3 and 4.5 trillion USD annually is needed if we hope to achieve the 2030 Agenda, meaning that developing countries currently face an annual funding gap of 2.5 trillion USD.
Increased coordination between countries in the development and implementation of new instruments, such as debt swaps to fund SDG implementation, increased concessional funding from Multilateral Development Banks, and more generalized reform of the international financial system that expands lending criteria beyond GDP and takes into account the vulnerabilities faced by developing countries are needed.
Ladies and gentlemen,
While many challenges need to be addressed, there are also opportunities we can take advantage of.
For example, the transition to clean energy is expected to generate 10.3 million net new jobs globally by 2030, more than offsetting the 2.7 million jobs expected to be lost in the fossil fuel sector.
Aligning our development frameworks with a low-carbon, climate resilient future requires us to adopt emerging innovations and technologies, promote investment in sustainable solutions, increase employment in green industries and sectors, and forge new supply chains, all of which are critical components of a green transition that will allow us to protect lives and livelihoods in a way that is fair to all and leaves no one behind.
We live in a world of profound and rapid change in which no country can stand alone. Sustainable development cannot be achieved unilaterally. Global challenges require global solutions forged through international cooperation.
Multilateral structures and institutions that accelerate sustainable development and reduce inequality are more vital than ever. We need to be coherent to leverage our rapidly advancing frontiers of knowledge and experience; Weneed to unleash the creativity of public and private investments and work together to make our globalized value chains more sustainable.
Here, the GDI offers the potential to help meet this financing gap to accelerate global progress on the SDGs, so long as it is firmly anchored and in compliance with recognized international norms and standards.
We stand ready to provide our best possible technical expertise and support to ensure this initiative is well aligned with the 17 Goals, while stressing that the key pillars that underpin the 2030 Agenda, namely peace and security, human rights and development, must be equally prioritized along with its central promise, to leave no one behind.
The UN in China remains committed to working with the people and Government of China to advance these efforts, share lessons learned, and collaborate in new partnerships as envisaged by the 2030 Agenda.
The vision articulated in the SDGs is ambitious, but it can be achieved through renewed passion, energy, and innovation.
I wish this forum great success. Thank you.