The Secretary General's Remarks to High-level Meeting on Financing for Development in the era of COVID-19 and Beyond: Jobs and Social Protection for Poverty Eradication

The pandemic has not only confirmed but deepened existing inequalities.  

In developed countries, access to vaccines has allowed economies to reopen, while stimulus payments and investments herald projected growth of 5 or 6 percent this year.  

In sub-Saharan Africa, that figure is just about 2.5 percent.  

A recent report by UNCTAD, the United Nations Conference on Trade and Development, forecast that the cumulative cost of delayed vaccination alone will amount to $2.3 trillion US dollars by 2025, with developing countries bearing the brunt.  

This could lead not only to a lost decade for development, but to a lost generation of poorly educated, unemployed, disaffected young people.  

Across the developing world, the pandemic has caused lasting damage, while debt burdens prevent governments from investing in recovery.  

Advanced economies are investing nearly 28 per cent of their Gross Domestic Product into economic recovery.  

For middle- and low-income countries, that number is between 2 and 6.5 per cent – a tiny proportion of a much smaller amount.  

Many of these same developing countries are facing the worst ravages of the climate crisis, which they did nothing to create.  

Global solidarity so far has been inadequate.  

This uneven, unfair recovery is eroding trust between the developed and developing world – trust that is essential to global cooperation in other areas.  

Today’s meeting is an opportunity to change course and build a recovery that benefits all.  

The pandemic is set to increase the number of extremely poor people by up to 224 million around the world. More than three-quarters of these ‘new poor’ are in middle-income countries. 

Many developing countries face crippling debt service costs while their domestic budgets are stretched and their ability to raises taxes is reduced. 

These countries urgently need a helping hand.  

But many, particularly vulnerable middle-income countries, do not qualify for aid and debt relief under current rules.  

I welcome the recent issuance of $650 billion in Special Drawing Rights by the International Monetary Fund. But obviously they are distributed, by quotas, largely to the countries that need them least.  

It is important that there is a significant amount of these SDRs to be rechanneled to the countries in greatest need, as I have urged. 

Likewise, the G20’s Debt Service Suspension Initiative, and the Common Framework for Debt Treatment, have potential to ease the debt crisis. But they are not sufficient.  

The DSSI should be extended into next year, and made available to all Middle-Income Countries that need it.  

Private finance must also be part of the solution. 

More generally, we must stop trying to adjust the crisis to the tools, and start adjusting the tools to the crisis. 

The current dynamics of global debt mean rich countries can borrow cheaply and spend their way to recovery, while low- and middle-income countries struggle to keep their economies afloat.  

Without debt relief, many countries will be in an unsustainable financial situation.  

Their people will pay with their lives, and with years of poverty and hunger, for this failure of global solidarity.   

No government should be forced to choose between servicing its debts and serving its people.  

In the longer term, I renew my call for reforms to remedy long-standing weaknesses and injustices in the international debt architecture and end the deadly cycles of debt waves, global debt crises and lost decades.  

This starts with a time-bound, open dialogue with all stakeholders to build trust and transparency.   

Our initiative on Financing for Development, convened jointly with the governments of Canada and Jamaica, yielded many innovative options. 

Excellencies, ladies and gentlemen,  

The forthcoming meetings of the International Financial Institutions, the G20, the UN Conference on Trade and Development, and COP26 will be a pivotal moment to put the world on a sustainable, resilient, and inclusive path. 

Global cooperation is indispensable to building resilience to future shocks, through economies that work for everyone.   

I wish you an excellent debate.  

Thank you.