Prime Minister Trudeau,
Prime Minister Holness,
Distinguished Secretary General of the United Nations,
I would like to thank you for inviting me to this meeting as President of the UN Economic and Social Council, says a press release received here today from New York.
We will meet on the 16th of April in ECOSOC to press for universal, equitable distribution and availability of the COVID vaccine. I believe this is a vital first step in our efforts for global recovery.
Your deliberations since last May have identified numerous options for financial recovery from the Covid 19 induced recession. These have had a positive impact on global decisions.
I would like to welcome in particular the IMF Managing Director's indication of the intention to present a formal proposal by June for a new SDR allocation of $650 billion and also to examine the options to reallocate SDRs to support vulnerable and low income countries.
The IMF now has ample “firepower” to expand its emergency and recovery support to the developing countries.
The Multilateral Development Banks, especially the World Bank, are also in a position to expand their emergency lending to developing countries. In particular, the next IDA should be expanded from $30 to 60 billion.
It is also evident that the G20’s Debt Suspension Initiative ( DSSI) will need to be extended beyond June and expanded to cover the most vulnerable countries including some of the small island developing countries.
Excellencies,
Your consultations have identified several possible mechanisms for debt relief and restructuring including debt deferral, debt buyout, and debt swaps. All of these options should be implemented within the common framework, such as the guidelines adopted by the G20.
Private creditors hold the vast majority of developing country debt. Their participation in debt relief and restructuring is obviously essential. It may be necessary to adopt national and international measures to incentivize private creditor participation.
To ensure sustainable management of developing country debt, it is also essential to review and update the global debt architecture, and various proposals have been put forward including the possibility of creation of a public global rating agency.
Excellencies,
The creation of a Liquidity and Sustainability Facility to lower interest rates on loans to developing countries, as proposed by the Economic Commission for Africa, would be an important instrument to expand developing countries’ access to market capital.
There is also general consensus that the recovery from the Covid crisis offers an opportunity to transition to a sustainable growth model. To make this transition, the developed countries must fulfill their promise to mobilize $100 billion annually in climate finance.
It is also vital to find ways to access the $378 trillion held in private capital to mobilize at least $1 trillion annually -in sustainable infrastructure investment. Without sustainable infrastructure, we will not be able to achieve either the SDGs or the climate goals.
Finally, it is most concerning that an estimated $178 billion flowed out of the developing countries last year to the developed countries. I hope your deliberations will consider specific steps to halt and reverse this bleeding of resources from developing countries.
Excellencies,
The ECOSOC’s Financing for Development (FFD) Forum will hold a high level meeting on 12 April. It will seek to capture the conclusions of deliberations such as yours and other meetings in its outcome document which is currently under negotiations. I wish you all success in your important consultations today and look forward to your active participation in ECOSOC’s FFD Forum.
I thank you.
Background:
High-Level Meeting with Heads of State and Government on the International Debt Architecture and Liquidity - Financing for Development in the Era of COVID-19 and Beyond Initiative
On 29 March 2021, the United Nations Secretary-General António Guterres, together with the Prime Minister of Canada, H.E. Justin Trudeau, and the Prime Minister of Jamaica, H.E. Andrew Holness, will convene a virtual Meeting of Heads of State and Government to discuss the international debt architecture and liquidity as part of the Financing for Development in the Era of COVID-19 and Beyond Initiative (FfDI).
One year into the COVID-19 pandemic, insufficient global solidarity among countries threatens to leave entire regions behind. While some countries have been able to accrue new debt to build a bridge to recovery and reserve vaccines, others have been forced to allocate their limited fiscal space to servicing their debts rather than supporting their people. Six developing countries have already defaulted since the onset of the pandemic, with an increasing number of low and middle-income countries also likely to head into default this year.
This poses a significant threat to our collective effort to build back better. Until all countries have the fiscal ability and capacity to invest in a global recovery, including by securing vaccines and investing in climate action, inequalities will continue to grow to the detriment of humanity as a whole.
Ahead of the Annual Meetings of the IMF and World Bank, the G20 and G7 meetings and the Financing for Development Forum, this event aims to underscore the urgency of audacious and concrete action to provide liquidity and address debt vulnerability. Now is the time to build a bridge to recovery and re-design an international debt architecture that works better for all.
https://www.un.org/en/coronavirus/financing-development
https://www.un.org/en/coronavirus/debt-and-covid-19
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