Amid A Global Crisis Of Economic Inequality, Gathering At UN To Call For Bold Measures To Close Finance Divide
With more than 50 countries held hostage by debt distress or at the risk of debt distress — triggering a great finance divide world leaders, senior government officials and high-level representatives from businesses, civil society and other sectors will gather at the UN ECOSOC Forum on Financing for Development from 17 to 20 April at UN Headquarters in New York to urgently set in place concrete measures to scale up financing for the Sustainable Development Goals, the pathway to a more inclusive, prosperous and stable world.
The Forum takes place at a time of unprecedented global challenges. The war in Ukraine, the climate emergency, the lingering effects of the COVID-19 pandemic and tightening financial conditions have upended the global economy and deepened the great finance divide between developing and developed countries and derailed progress on the SDGs.
If left unaddressed, the finance divide will translate into a lasting sustainable development divide, as emphasized by the 2023 Financing for Sustainable Development Report, which will be presented at the Forum.
Fifty-two low- and middle-income developing economies are either in debt distress or at high risk of debt distress, accounting for more than 40% of the world’s poorest people. Developing economies cannot fund progress on the SDGs if they are borrowing up to 14% while also paying more than 20% of revenue for debt servicing.
“One recent report on inequality found that since the pandemic, the richest one per cent of people around the world have captured nearly twice as much new wealth as the rest of the world combined,” said António Guterres, UN Secretary-General. “Inequalities within some countries are regressing towards early 20th century levels – to a time before women were allowed to vote; and before widespread acceptance of the concept of social protection. This shames us all.” he added.
While mobilizing sufficient financing for sustainable development has become more challenging, the resources do exist. This year’s Forum is an opportunity to channel the resources in the right direction, while reinvigorating commitments to Official development assistance and climate finance. The Forum will echo the call for an SDG Stimulus of $500 billion a year, launched by the UN Secretary-General in February 2023, to scale up affordable long-term financing for countries in need. The Stimulus stresses the importance of reforming the international financial system, including the business model of the multilateral development banks. The international financial system is one in which most of the world’s poorest countries saw their debt service payments skyrocket by 35% in 2022.
“In the longer term, we will not solve today’s challenges by relying on the financial system that helped to cause them. The global financial architecture was created for a world that no longer exists. It cannot address the challenges faced today by developing countries,” said the UN Chief.