Economic Recovery across Regions Severely Uneven, UNCTAD Secretary General Underscores as Second Committee Addresses Macroeconomic Policy Questions

With COVID‑19 sending shockwaves through trade and supply chains and pushing developing countries further behind, speakers called for urgent reform of the global trade system that ensures an equitable and inclusive recovery for all, as the Second Committee (Economic and Financial) took up macroeconomic policy today.

Rebeca Grynspan, Secretary‑General of the United Nations Conference on Trade and Development (UNCTAD), introduced the Secretary‑General’s report on “International trade and development” (document A/76/213), stating that while signs of economic recovery are already visible, the process has been worryingly uneven across regions.  Low-income countries are lagging in recovery, particularly with the slow progress of a global “vaccine for all”.  Enhancing global trade is indispensable for recovery from this crisis, and it must be both green and inclusive, she said.

The representative of Morocco, speaking on behalf of the African Group, highlighted that her continent is facing its worst economic recession in 25 years largely due to the pandemic.  Thus, urgent macroeconomic policy action is needed to overcome the impacts of the COVID‑19 pandemic.  Given its central role in sustainable development, trade is the vehicle with which the international community can build forward better and achieve an inclusive and green economy.  In that regard, she reaffirmed commitment to the multilateral trade system and the World Trade Organization (WTO).

Joerg Weber, Chief of the Investment Policies Branch in the Division on Investment and Enterprise, UNCTAD, introduced the dedicated chapter on promoting investments for sustainable development in the World Investment Report 2021, as transmitted in the note by the Secretary‑General (document A/76/243).  Noting that developing countries are bearing the brunt of the economic downturn, he warned that attaining the level of investment required to achieve the Sustainable Development Goals in those countries by 2030 is now seriously in doubt due to the pandemic.  In that regard, he said the sustainable investment market needs to transition from market niche to market norm by making sustainability integration a universal norm.  It needs to transform from a developed country phenomenon to a global market, so it benefits all countries, particularly developing economies.

With many delegations calling for increased investments and financing for development, the representative of Guinea, speaking on behalf of the “Group of 77” developing countries and China, noted that more than 150 million people are expected to join the ranks of extreme poverty by the end of 2021.  Highlighting the impact of high debt levels on countries’ abilities to withstand the consequences of the pandemic, he called on the international community to provide sufficient liquidity and fiscal space to all developing countries in order to facilitate implementation of the Sustainable Development Goals.

The representative of Kazakhstan, speaking on behalf of the Group of Landlocked Developing Countries, also expressed concern about high debt levels and fulfilment of official development assistance (ODA) commitments.  She said increased ODA is vital for landlocked developing countries to support their national responses to the pandemic.  Noting that foreign direct investment (FDI) has recently dropped by $35.2 billion, she said there is a pressing need to support landlocked developing countries with debt relief to free up resources for economic and social recovery to address the pandemic’s impact as well as climate action.

The representative of Jamaica, speaking on behalf of the Caribbean Community (CARICOM), said the international financial system should be positioned to provide liquidity when and where it is most needed in times of systemic crisis, he said, describing the International Monetary Fund’s (IMF) decision to approve $650 billion in special drawing rights as a step in the right direction.  He further expressed support for calls made by the Economic Commission for Latin America and the Caribbean (ECLAC) to reform the international financial architecture and help build resilience for Caribbean small island developing States.

The representative of Antigua and Barbuda, speaking on behalf of the Alliance of Small Island States, said the debt problem for his group of countries is more than a temporary liquidity issue linked to the COVID‑19 crisis — it is more deeply rooted.  Noting that his bloc’s mounting debt burdens are directly linked to the negative effects of climate change, he called on the international community to prioritize climate finance as it looks ahead to the upcoming twenty-sixth session of the Conference of the Parties to the United Nations Framework Convention on Climate Change in Glasgow.

Also speaking today were the representatives of Indonesia (for the Association of Southeast Asian Nations (ASEAN)), Qatar, Thailand, Ethiopia, China, Syria, Ecuador, El Salvador, Iran, Egypt, Ghana, Cuba, Burkina Faso, Bangladesh, Zimbabwe, Malaysia, Costa Rica, Cameroon, Dominican Republic, Senegal, Maldives, Russian Federation, Belarus, Venezuela, Nigeria, Zambia, Angola, Togo, Saudi Arabia, Lesotho and Paraguay.

Statements were also made by the observer of the Holy See and a representative of the International Trade Centre.

Reports were presented by the President of the Trade and Development Board; Chief of the Debt and Development Finance Branch in the Division on Globalization and Development Strategies of UNCTAD; Chief of the Policy Analysis and Development Branch in the Financing for Sustainable Development Office of the Department of Economic and Social Affairs; Officer-in-Charge of the Division on International Trade and Commodities of UNCTAD; Chief of the Strategic Engagement and Policy Integration Branch in the Financing for Sustainable Development Office of the Department of Economic and Social Affairs; a representative of the Department of Economic and Social Affairs; and the Secretary‑General of UNCTAD.

The Committee will meet again at 10 a.m. on Thursday, 14 October, to take up operational activities for development.

Introduction of Reports

MAIMUNA TARISHI (Tanzania), President of the Trade and Development Board, presented the reports of that body (document A/76/15).  She noted that the global community is still witnessing inequalities in access to vaccines for COVID‑19 and much‑needed finance in combating the health and economic impacts of the pandemic.  Advanced economies are reaching or approaching pre‑pandemic gross domestic product (GDP) levels, but the reality is very different for developing countries.  If this trend continues, those nations face another lost decade of development, with many more lives and livelihoods lost, the development gains of recent years reversed or erased and the failure of the 2030 Agenda for Sustainable Development a very real danger.

In the lead‑up to the fifteenth session of the United Nations Conference on Trade and Development (UNCTAD), she said Member States emphasized the importance of revitalizing global consensus on development, given how the pandemic has created a whole new set of vulnerabilities and inequalities, which require a transformative agenda.  This was the guiding principle of the Bridgetown Covenant’s theme and the four transformations it foresees, which include transforming economies through diversification, transforming to a more sustainable and more resilient economy, transforming how development is financed and transforming multilateralism, all supported by an UNCTAD better suited to a world of transformation.

STEPHANIE BLANKENBURG, Chief of the Debt and Development Finance Branch in the Division on Globalization and Development Strategies of UNCTAD, introduced the report of the Secretary‑General on “External debt sustainability and development” (document A/76/214) and briefed the Committee on implementation of the resolution on the promotion of international cooperation to combat illicit financial flows and strengthen good practices on assets return to foster sustainable development.  On external debt sustainability, she said the external debt sustainability of developing countries as a group has clearly deteriorated further in 2020, and external debt stocks continued to grow by $500 billion in 2020 to reach a new record high of $1.3 trillion.  The collapse in export earnings as well as escalation of debt servicing costs have particularly impacted small island developing States.  Similarly dire is the situation faced by low and middle-income countries where external debt stocks account for more than double of export earnings with servicing costs.

Noting that the deterioration of external debt sustainability in developing countries is increasingly marked by “a two‑tier recovery” from the pandemic, she stressed that those countries are further hampered by their limited fiscal space.  It is suggested that the Committee take forward a comprehensive strategy around reforming the international debt architecture, including restructuring or reducing debt especially for middle‑income countries to help them avoid deadly cycles of debt waves.  The report also suggests a transparent and predictable framework for debt standstills as well as the provision of credit and unbiased debt sustainability assessments, among other suggestions for the Committee’s consideration.

On the promotion of international cooperation to combat illicit financial flows, she said considerable progress has been achieved in advancing the statistical measurement of such flows, including the publication in October 2020 of a conceptual framework for the statistical measurement of illicit financial flows.  As well, measurement methods developed are currently being tested by pioneering countries in Africa, Asia Pacific, Latin America and Europe in coordination with the regional commissions.

SHARON SPIEGEL, Chief of the Policy Analysis and Development Branch in the Financing for Sustainable Development Office of the Department of Economic and Social Affairs, introduced the Secretary‑General’s report “International financial system and development” (document A/76/230).  She noted that the report refers to the increased impact of special drawing rights during the current crisis and the opportunity to rethink their use as tools for development.  Such loans could be invested in climate resiliency to lower future risks.

The report also notes an increase in leverage in financial markets, as interest rates were lower prior to crisis.  It states that the crisis has highlighted the fact that risk management is both economic and non‑economic, especially when it comes to environment and climate.  The report underscores increased understanding of the links between these aspects of risk management and economic stability and how to take this concept forward.

MIHO SHIRATORI, Officer-in-Charge of the Division on International Trade and Commodities of UNCTAD, introduced the Secretary‑General’s report on “World commodity trends and prospects” (document A/76/215).  He noted that several factors contributed to price movements of individual commodities from January 2020 to February 2021.  A decline in commodity prices was influenced largely by a plunge in demand, owing to reduced economic activity triggered by the COVID‑19 pandemic, while an increase in prices was driven largely by rising demand due to an improvement in economic activity, and tightening supply.

High price variations have significant implications for commodity-dependent developing countries, he said.  They can contribute to revenue fluctuations in such nations, hindering budgetary planning and delivery of basic goods and services.  High price volatility also undermines development, as it could discourage investment, widen trade deficits and aggravate household poverty.  Apart from the agricultural raw materials subgroup, which dropped slightly, all commodity subgroup indices rose from March to August 2021.  For Governments of commodity‑dependent countries (importers and exporters), price risk can be a key determinant of expenditure or income, or both.  Governments may benefit from a careful analysis of their exposure to price risk and an evaluation of available instruments for risk mitigation.  Ultimately, only economic diversification away from the commodity sector is the best way to address the perennial problems associated with commodity dependence.

JOERG WEBER, Chief of the Investment Policies Branch in the Division on Investment and Enterprise, UNCTAD, introduced the dedicated chapter on promoting investments for sustainable development in the World Investment Report 2021, as transmitted in the note by the Secretary‑General (document A/76/243).  He said investments in the Sustainable Development Goals collapsed in several sectors throughout the developing world.  The pandemic slowed down existing investment projects and the prospect of a recession led multinational enterprises to reassess new projects.  Noting that developing countries are bearing the brunt of the investment downturn, he said foreign direct investment (FDI) recovery will be highly uneven with most developing countries trailing behind, affecting investment in the Sustainable Development Goals, which is not expected to recover before 2022.  Attaining the level of investment required to achieve the Sustainable Development Goals in developing countries by 2030 is now seriously in doubt.

On capital markets and sustainable development, he said the steady increase in those markets sidelines developing countries in their Sustainable Development Goals sectors.  The sustainable development market has expanded rapidly and steadily, accelerated by the pandemic.  However, most of the funds in this market are domiciled in developed countries.  In that regard, the sustainable investment market needs to transition from market niche to market norm by making sustainability integration a universal norm.  It needs to transform from a developed country phenomenon to a global market, so it benefits all countries particularly developing economies.

MARIANGELA PARRA‑LANCOURT, Chief of the Strategic Engagement and Policy Integration Branch in the Financing for Sustainable Development Office of the Department of Economic and Social Affairs, presented the Secretary‑General’s report on “Follow-up to and Implementation of the Outcomes of the International Conferences on Financing for Development” (documents A/76/79 and A/76/229).  She noted that the pandemic has dramatically set back progress on the Sustainable Development Goals and affected all aspects of financing for development.  The effects of climate change are compounding risks, particularly among the world’s most vulnerable economies.  Policymakers need urgently to invest in mitigation, adaptation and resilience. Developed and developing countries are increasingly seeing divergent growth prospects, amid highly uneven vaccine rollout and policy stimulus.  Many developing countries are under increased fiscal pressures, constraining their ability to effectively manage the pandemic’s fallout and to invest in sustainable development.

The Secretary‑General’s report highlights five policy issues that the international community must act upon.  First, public and private debt levels are rising, leading to increased risk of sovereign debt distress in many developing countries and heightening financial stability risks amid growing leverage in the corporate sector.  Bolder actions are needed to create more fiscal space for countries to invest in a sustainable recovery, as well as to address structural deficiencies in the international sovereign debt architecture.  Second, reviving domestic and international private sector activity and investment is critical to recover from the crisis.

Third, adoption of automation and digitalization technologies and acceleration of existing trends in new technologies has led to a widening digital divide, social and economic inequalities, and other unintended consequences.  The report calls on policymakers to ensure affordable Internet access for all and increase digital literacy as well as employ regulatory frameworks and address financial stability risks of fintech.  Critically, it says that every tool to increase manufacturing capacity of the COVID‑19 vaccine, including technology transfers and patent pooling, should be considered.  Fourth, additional official development assistance (ODA) is urgently needed for pandemic response, as well as climate finance flows.  Finally, the report emphasizes that mobilization of domestic resources is necessary to build social protection systems, which have been key to pandemic response.

KENNETH IVERSEN, Department of Economic and Social Affairs, presented the Secretary‑General’s report titled “Unilateral economic measures as a means of political and economic coercion against developing countries” (document A/76/310).  Noting Member States’ diverging views on unilateral measures, he said some States view such unilateral economic measures as admissible in certain circumstances, while others disagree with the imposition of unilateral economic measures, regarding them as an instrument of political and economic coercion against developing countries.

He said countries affected by unilateral economic measures at present reported adverse impacts of such measures on their economies and development, in particular in the health, education and infrastructure sectors.  The most vulnerable segments of the population are often the victim of the negative impact of the unilateral measures, as stated by several Member States.  Those measures also hinder the strengthening of global trade and investment linkages, which is all the more significant in the light of the 2030 Agenda, which identified international trade as an essential means of implementation.

Despite the General Assembly’s call for the adoption of effective steps to eliminate the use of unilateral economic measures against developing countries, the number of such measures has been on the rise, he said.  Further, some of the affected countries pointed out that unilateral economic measures have made it harder for them to achieve the goals and objectives in the 2030 Agenda.  Also, Member States affected by such measures highlighted that in the context of COVID‑19, unilateral coercive measures have had a negative effect on access to diagnostic tests and inputs for the production of vaccines as well as on their ability to import basic medical supplies.

He noted that, under the Charter of the United Nations, the Security Council can take mandatory sanctions as an enforcement tool when peace has been threatened and diplomatic efforts have failed.  The sanctions include comprehensive economic measures as well as more targeted ones.  However, unilateral economic measures are, indeed, inconsistent with the principles of international law as set forth in the Charter, he said.

REBECA GRYNSPAN, Secretary‑General of the United Nations Conference on Trade and Development, introduced the Secretary‑General’s report on “International trade and development” (document A/76/213).  The report outlines how COVID‑19 has significantly affected both levels and patterns of global trade.  World trade contracted by about 9 per cent in 2020, with international merchandise trade values falling by more than 7 per cent and international trade in services falling by a massive 20 per cent.  Preliminary data for the first half of 2021 indicates an increase in merchandise trade value of about 30 per cent compared to 2020 and of about 15 per cent compared to 2019.  UNCTAD projects trade to further recover during the second half of 2021.  Overall, for 2021 the value of global trade is forecasted to be about 20 per cent and 28 per cent higher than in 2019 and 2020, respectively.

While signs of economic recovery are already visible, the process has been worryingly uneven across regions, she noted.  Low-income countries are lagging in recovery, particularly with the slow progress of a global “vaccine for all”.  Export levels of the poorest countries are still lower than pre‑pandemic levels by an average of almost 5 per cent, while levels of goods exports of the world’s smallest economies remain, on average, 25 per cent below pre-pandemic levels.  Efforts to renationalize production systems will severely impact low- and middle-income countries, making it difficult for them to access or upgrade along the development ladder.  Nevertheless, Governments can support businesses developing risk management and resilience strategies and provide incentives to supplier diversification in existing trade agreements and investment regimes.  Enhancing global trade is indispensable for recovery from this crisis, and it must be both green and inclusive.

Ms. Grynspan, in a pre‑recorded video presentation, briefed the Committee on the outcome of the fifteenth session of the United Nations Conference on Trade and Development, which was hosted by Barbados in October under the theme “From inequality and vulnerability to prosperity for all”.  She said the session was a historic conference due to a “a number of firsts”.  It was the first UNCTAD conference hosted by a small island developing State, which allowed UNCTAD to highlight the plight of small island developing States and the overlapping pandemic and climate crisis they face.  As well, it was the first UNCTAD conference led by a female Secretary‑General and hosted by a female Prime Minister.

Noting that the conference was a great success with over 2,300 delegates from 139 countries joining, she said there were clear mandates derived for UNCTAD.  First among those mandates is the need to reinvigorate UNCTAD’s inter-governmental mechanism and particularly its trade and development body.  The Bridgetown Covenant outlines Member States’ desire to UNCTAD’s capacity for consensus building to be meaningfully reinvigorated.  Noting the need to address many issues related to trade and development, she said that through that framework Member States have mandated UNCTAD to contribute to international dialogues on those issues, including vaccine equity, property rights waivers, enhanced manufacturing and shipping, and investments for trade and infrastructure resilience.

Statements

The representative of Guinea, speaking on behalf of the “Group of 77” developing countries and China, noted that more than 150 million people are expected to join the ranks of extreme poverty by the end of 2021.  Highlighting developing countries’ dependence on commodities and their vulnerability to price fluctuations, he called for transformative action to promote investments and financing for development in order to build productive capacity in such economies.  Also stressing the need to support technology transfer and stimulate job creation, he called for a shift away from a commodity-driven growth model.  It is crucial to redirect development finance and emphasize the productive sectors of the economy.  Stressing the need for international support and access to concessional financing, he said it is essential to help developing countries improve national health systems and progress towards universal health coverage.

Highlighting the impact of high debt levels on countries’ abilities to withstand the consequences of the pandemic, he called for credible measures to address liquidity problems.  The international community should provide sufficient liquidity and fiscal space to all developing countries in helping them to implement the Sustainable Development Goals, he said, urging developed countries to eliminate tariff peaks, tariff escalations and increase market access for agricultural and industrial products from developing countries.  Also calling on developed countries to fulfil their unmet ODA commitments, he reiterated that international development cooperation, especially North‑South cooperation is the main channel of development financing, with South‑South cooperation as a complement to, rather than a substitute for it.  Stressing the principle of “common but differentiated responsibilities” he added that developed countries should bear the primary responsibility in financing for development.

The representative of Kazakhstan, speaking on behalf of the Group of Landlocked Developing Countries, noted that her bloc has been severely affected by the recent pandemic-related commodity price shock.  Adding that international trade has also been pushed back during the pandemic, she said the country suffered an export decline of 40 per cent or $37 billion in 2020.  This is compounded by high trade costs due to transit difficulties, she said, stressing the need for increased integration into international and regional trade routes.

Emphasizing that increased ODA is vital for landlocked developing countries to support their national responses to the pandemic, she noted that FDI has recently dropped by 35.2 billion.  Moreover, there is a pressing need to support landlocked developing countries with debt relief to free up resources for economic and social recovery to address the pandemic’s impact as well as climate action.  Urging development partners to ramp up support from triangular and South‑South cooperation, development banks and the private sector, she stressed the need for the United Nations system to mobilize support in ensuring her group of countries are able to emerge from COVID‑19.

The representative of Morocco, speaking on behalf of the African Group and associating herself with the Group of 77, said urgent macroeconomic policy action is needed to overcome the impacts of the pandemic.  Stressing that Africa is facing its worst economic recession in 25 years largely due to the pandemic, she called on the cooperation of the international community and its stronger commitment to financing for development.  Trade is central to sustainable development and is the vehicle with which the international community can build forward better and achieve an inclusive and green economy.  In that regard, she reaffirmed commitment to the multilateral trade system and the World Trade Organization (WTO).

With “no end in sight” to the pandemic, she stressed the need to remove export barriers, so that African countries can access COVID‑19 vaccines, adding that those vaccines should be made a global public good.  On a different note, she said Africa’s free trade area is a key tool for inclusive sustainable development in the continent, noting its focus on improving the lives of African women.  Noting that financing for development remains a concern, she stressed the need to rechannel special drawing rights to countries of utmost need, extending the duration of the Debt Suspension Service Initiative and addressing liquidity needs.

The representative of Indonesia, speaking on behalf of the Association of Southeast Asian Nations (ASEAN), stressed that vaccination remains the top priority to sustain the momentum of economic recovery.  While stressing the importance of continued fiscal and monetary stimulus, he underscored that making COVID‑19 vaccines available and affordable to all will facilitate the return to normalcy.  Outlining the ASEAN Comprehensive Recovery Framework, which aims to mitigate the impact of the pandemic, he highlighted its five broad strategies around health, human security, economic integration, digital transformation and sustainability.  The recovery period is a time to build forward better, to develop and put into practice policies for inclusive and sustainable development.

Given the region’s reliance on trade and vulnerability to external shocks, he continued, it is vital to increase intra‑ASEAN trade and investment to strengthen supply chain resilience and regional value chains.  Emphasizing the importance of reviving transport and regional connectivity while also assisting affected sectors such as tourism and micro-, small and medium-sized enterprises, he noted that ASEAN has established a post‑COVID‑19 recovery plan for tourism that will provide detailed regional plans, new mandates and innovative measures for the safe reopening of that sector.  The Alliance is also endeavouring to promote digital transformation in the region, by prioritizing e‑commerce, digital economy, e‑governments and e‑services, he said.

The representative of Jamaica, speaking on behalf of the Caribbean Community (CARICOM) and associating himself with the Group of 77 and the Alliance of Small Island Developing States, said nations such as his continue to face complex development challenges in the midst of the global climate emergency.  Those are related to their small size, vulnerability to external shocks, import dependence and narrow resource and export bases, among other factors.  “Coupled with the unremitting socioeconomic challenges exacerbated by the pandemic, the Caribbean’s recovery will require decisive action and transformative multilateral cooperation,” he said, stressing that development finance remains an indispensable lynchpin for the achievement of the internationally agreed development goals.

He spotlighted the pernicious impact of developing countries’ graduation status on small island developing States and middle-income countries more broadly, emphasizing that the denial of access to concessional financing has forced many of those nations to meet their development needs by resorting to more volatile non‑concessional private capital markets, via sovereign bond issuance.  Pressing for the broader acceptance of the multidimensional vulnerability index for small island developing States, he added that innovative financing is also crucial to facilitating inclusive, resilient and sustainable recoveries.  The international financial system should be positioned to provide liquidity when and where it is most needed in times of systemic crisis, he said, describing the International Monetary Fund’s (IMF) decision to approve $650 billion in special drawing rights as a step in the right direction.  He further expressed support for calls made by the Economic Commission for Latin America and the Caribbean (ECLAC) to reform the international financial architecture and help build resilience for Caribbean small island developing States.

The representative of Antigua and Barbuda, speaking on behalf of the Alliance of Small Island States and associating himself with the Group of 77, said that while all economic sectors within small island developing States have been impacted by the pandemic, the tourism and resource‑based economies are the most severely affected.  While developed countries were able to transition activities to a digital economy, this was not possible for his bloc, given its challenges with Internet connectivity.  As a result, Governments are forced to balance repaying debts, ensuring social safety nets and protective measures to curb the fallout from the pandemic.  Those challenges necessitate undertaking new loans in a volatile market, he said.  Moreover, the levels of external debt for some small island developing States surpasses 100 per cent of GDP in 2020, he stressed, calling upon developed countries to move swiftly with the reallocation of special drawing rights.

However, the debt problem of small island developing States is more than a temporary liquidity issue linked to the COVID‑19 crisis — it is more deeply rooted, he continued.  The unintended consequences of graduating small island developing States to middle and high-income status requires immediate revision.  As such, it is time for the international community to accept that a multidimensional vulnerability index is a corrective measure to that malpractice, he said.  Furthermore, his bloc’s mounting debt burdens are directly linked to the negative effects of climate change, he said, calling on the international community to prioritize climate finance.

The representative if Qatar, aligning herself with the Group of 77, said challenges associated with the pandemic have placed strains on trade, especially for landlocked and least developed countries.  Adding that the climate crisis must also be urgently addressed, she said Qatar will contribute $100 million to support small island developing States and least developed countries in addressing this phenomenon.  Her country attaches great importance to multilateral cooperation, she said, and plans to play a key role in contributing to alleviate debt.  Qatar has supported several countries and organizations in alleviating pandemic effects, signing an agreement with the World Health Organization (WHO) to provide $10 million in support for access to COVID‑19 tools.

The representative of Thailand, associating herself with the Group of 77 and ASEAN, shared ways in which the international community can coordinate macroeconomic policies to build a more sustainable, resilient and inclusive future.  To get economies and livelihoods quickly back on track, she said efforts to reconnect global value chains and address inequalities in all forms must be redoubled.  Reiterating the need for an open, fair and equitable financial system, she welcomed further initiatives by the Group of 20, international financial institutions and the private sector in providing critical debt relief and liquidity for the most vulnerable nations in these challenging times.  In the longer term, she said the reform of global financial governance must be geared towards people’s well‑being to deliver prosperity for all.  Noting that the pandemic has revealed imbalances in the way individuals conduct business and treat the planet, she said Thailand has integrated the Bio‑Circular‑Green Economy Model in its post-pandemic recovery efforts.  With this green economy model, her Government strives to promote a balance between human and nature with a shift in mindset, the optimization of resources and the localization of low‑carbon technologies for more balanced and sustainable economic growth.

The representative of Ethiopia noted that lack of access to COVID‑19 vaccines is having a negative impact on global health and economic recovery.  Despite multiple challenges, however, major steps have been taken in his country to reach the Sustainable Development Goals.  The Government has developed a home-grown agenda and also taken measures to forge public and private partnerships, access external financial sources and implement a medium-term debt strategy.  Adding that debt and its servicing continue to present a challenge, he called on developed countries to step up on their ODA commitments of 0.7 per cent to ensure that development gains will not be completely reversed.

The representative of China said that with the pandemic still raging, the uneven recovery among countries is even more pronounced.  Noting the increased difficulties faced by vulnerable and low-income countries, he stressed the importance of upholding multilateralism and strengthening macroeconomic policy coordination to accelerate implementation of the 2030 Agenda and promote recovery of the world economy.  As well, development resources should be further mobilized, and economic measures implemented to increase liquidity for countries facing difficulties.  He said China’s lead in registering economic growth is giving a strong impetus to global economic recovery.  His Government is actively supporting countries in their fight against the pandemic by providing funds to the COVAX Facility and implementing debt relief to developing States.

The representative of Syria, aligning himself with the Group of 77, noting that trade is a vital tool for sustainable development, expressed regret that several States suffered challenges in using this vehicle in boosting national development.  His country’s development is compounded by other challenges, including economic terrorism and the imposition of unilateral coercive measures to suffocate populations and force their national agendas.  Such illegal and immoral measures have caused significant adverse consequences for all Syrians, affecting education, food security and fuel.  It has also constrained the Government’s ability to raise living standards, significantly undermined the national economy, led to a drop in trade volume and raised inflation to soaring levels.

The representative of Ecuador, associating himself with the Group of 77, reiterated his country’s support for a rules‑based, open, transparent, inclusive, non‑discriminatory and equitable multilateral trading system within the framework of WTO.  Dependence on resources from commodities makes countries more vulnerable to price variations, he said, especially when there are high levels of indebtedness.  For this reason, the role of multilateral development banks and major creditors continues to be of crucial importance as they facilitate States to have the fiscal space to implement policies that encourage recovery and protect the progress made towards achieving the Sustainable Development Goals.  To minimize tax evasion and illicit financial flows, he said it is essential to maintain cooperation in fiscal and tax matters.  Noting his country’s commitment to the Addis Ababa Action Agenda, he called for coordinated efforts to mobilize new resources to finance socioeconomic recovery and sustainable development.

The representative of El Salvador called on the international community to bolster efforts to bring about economic recovery from the pandemic as well as achieve the 2030 Agenda.  He stressed to develop an action plan to guide financial policies in tackling COVID‑19 impacts affecting the world economy, especially in the most vulnerable countries.  The international community should increase ODA, extending access to international financing under favourable conditions to promote economic recovery to minimize the current crisis.  Adding that it should also ensure that supply chains of essential goods and services are strengthened, he stressed that COVID‑19 vaccines, as well as tools to fight the virus, should be considered global public goods.

The representative of Iran, associating himself with the Group of 77, expressed regret that the imposition of unlawful and illegitimate unilateral coercive measures — including unjustified and illegal sanctions with the extraterritorial impact imposed by some countries — have compounded the human suffering wrought by the pandemic.  Those rampant blows to multilateralism have generated enormous hurdles, he said, adding that unilateral policies by some major players cast doubt on the effectiveness of the multilateral financing and trading systems.  Against that backdrop, the international community should ensure that financing for development in no way becomes hostage to the coercive and restrictive agenda of financier countries and organizations.  Meanwhile, it remains the right of every sovereign State to be part of a universal, rules‑based, inclusive and non‑discriminatory multilateral trading system.  The WTO — to which Iran has been denied membership for more than two decades — is now a target of harsh unilateral behaviour which puts the whole international trading system at risk, he said, also underlining the importance of technology transfer.

The representative of Egypt said the pandemic threatens to reverse years’ worth of gains made by developing countries in implementing the 2030 Agenda.  In that regard, it is important to create synergies in the efforts of all development partners to create a more stable macroeconomic environment.  As well, there is a need to take all measures necessary to maintain the stability of financial markets and global supply chains to facilitate the free flow of trade and the global economic recovery.  More help and assistance should be provided to developing countries to guarantee international liquidity, she said, adding that technical support and financial lending will also help them to build resilience.  Noting the adverse impacts of the pandemic on budget revenues, she called on the international community and development partners to alleviate debt due from developing countries.  She also called for enhanced multilateral action to address illicit financial flows, which deplete the resources of developing countries.

The representative of Ghana, aligning himself with the Group of 77, drew attention to worsening pandemic-related economic and social conditions as well as soaring inflation.  Many developing countries are suffering from infections, deaths, lockdowns and declines in commodity prices, he said, urging international partners to ramp up support for their recovery.  Increased debt and vaccine inequity has widened the global inequality gap, perhaps leading to a lost decade for achievement of sustainable development.  To boost recovery, he said the international community must work to enhance global trade, reform the international financial architecture and ensure that green solutions are integrated into recovery efforts, especially for developing countries.

The representative of Cuba, associating herself with the Group of 77 and the Alliance of Small Island Developing States, said the pandemic has amplified pre-existing structural problems, with terrible socioeconomic consequences for most developing countries.  Therefore, their economies have seen a dramatic increase in inequality, an unsustainable increase in debt burden, reduction in tax revenues, capital outflows, a drop in remittances, tourism and exports, and lack of access to finance.  To reverse this reality, she said genuine political will is needed to mobilize sufficient additional, predictable and unconditional resources, so that developing countries can achieve their development goals.  Noting that very few developed nations fulfil their commitments to provide 0.7 per cent of gross national income as ODA, she said developing countries’ efforts must be backed by concrete action in the areas of technology transfer, foreign financing on fair terms, market access, capacity-building and North‑South cooperation.  As well, a comprehensive, sustainable and lasting solution to the problems of external indebtedness is urgently needed, as the excessive amounts hinders the efforts of the countries of the South to focus on their development.

The representative of Burkina Faso, aligning himself with the Group of 77, noted the COVID‑19 has cancelled hard-won development progress, as it sent economic indicators plummeting.  The growth rate of GDP in his country dropped from 6.2 per cent in 2016 to 2.5 per cent in 2020.  Burkina Faso aims to further strengthen its development framework and build resilience to external shocks in putting its economy back on track.  However, external obstacles prevent it from fully harnessing the benefits of international trade, including price volatility and the international economic recession, which has slowed down consumption.

The representative of Bangladesh, associating himself with the Group of 77, said the pandemic is preventing vulnerable and developing countries from borrowing funds, further increasing their debt burdens and making those debts unsustainable.  Noting that his country drew out $14.6 billion in stimulus packages, he said developed countries and international financial institutions must provide concessional finances to vulnerable countries, with a view to creating jobs and aiding economic recovery.  As well, ODA is critical to the sustainable development of many developing countries.  In this crisis, development partners should turn their 0.7 per cent commitment into a reality.  More innovative financing and trade benefits should be channelled to developing and middle-income countries.  Noting that remittances play a crucial role in many low-income countries, he called for the integration of migrant workers in the post-pandemic job market.

The representative of Zimbabwe noted that climate change, already high debt levels and lack of financing were hindering efforts to recover from the unexpected onslaught of the pandemic.  Even before the pandemic, developing countries had limited access to concessional financing, he said, emphasizing that allocation of special drawing rights would assist these nations to fund economic recovery.  The international community should also increase ODA and maintain trade flows, especially for food, medical supplies and vaccines.  Adding that unilateral coercive measures are also preventing countries to recover, he stressed the need to reform the global economic architecture and move to one beneficial to all.

The representative of Malaysia noted that her country has introduced several economic stimulus packages to cushion the impacts of COVID‑19, and its GDP has rebounded by 16.1 per cent in the second quarter of 2021.  Noting the recently approved Twelfth Malaysia Plan, she also stressed the need for bold reforms towards a resilient recovery.  Malaysia’s National Investment Aspirations policy will be the main framework for attracting quality FDI to the country, including advanced technology‑based investments which conform to environmental sustainability.  Voicing her country’s support for the call on the Group of 20 to extend its Debt Service Suspension Initiative, she stressed that trade protectionism is counter-productive to the global recovery efforts.  She went on to point out that Malaysia will work towards greater trade cooperation through ratification of new free trade agreements with strategic partners, highlighting the need for reform in areas such as export restrictions during COVID‑19.  In that regard, Malaysia echoes the call for temporary waiver on Trade‑Related Aspects of Intellectual Property Rights to increase global production of vaccines.

The representative of Costa Rica noted that the pandemic has strained budgets, increased debts and reversed development gains in her bloc, demonstrating gaping differences in recovery finances for all countries.  In her bloc, exports dropped 7 per cent, the greatest decrease in 20 years.  The region has attempted to minimize the pandemics impact through economic strategies for recovery, but the impact on trade and the tourist sector closure has been devastating.  The international community has adopted measures to allow developing countries a tax margin, but they also need debt relief for liquidity in recovering, she said, or the Sustainable Development Goals will be postponed.

The representative of Cameroon, noting that protectionist measures have an adverse impact on commodities reaching the global supply chain, said his country objects to such measures especially given the current instability of markets and foreign debt, which remains high because of the pandemic.  He emphasized the need for reform for a more cohesive trade system that is open and inclusive.  Also, policies that can funnel resources for the achievement of the Sustainable Development Goals should be implemented.  Noting that debt is an obstacle to development progress, he said sustainable solutions should be provided under the aegis of the United Nations, the World Bank and IMF.  Expressing concern that annual losses linked to corruption amount to approximately $150 billion, he said efforts to counter illicit financial flows should ensure the restoration of assets.  He urged development partners to comply with their commitments under the “Addis programme”, emphasizing the need for ODA.

The representative of the Dominican Republic, aligning herself with the Group of 77, said only joint planning can achieve the Sustainable Development Goals.  Global challenges require global action.  The Dominican Republic has vaccinated 70 per cent of its population and given 800,000 vaccine doses to neighbouring countries.  Inequality, violence, hunger and low rates of education continue to affect the Latin and Caribbean region.  The country’s capacity for debt is limited and it cannot sustain a financial crisis as a larger country is able.  There is not an equal agenda of economics and finances for the developing and developed world.  The small island developing States were impacted unequally by the pandemic’s impact on tourism, for example.  Efforts must be made to contribute to the well‑being of all citizens.  The way in which international aid is disbursed must be redesigned to reach the most vulnerable people.

The representative of Senegal stressed that the pandemic has revealed the urgent need to rethink and reform the international financial system in seeking fairer economic governance.  Debt must be reconsidered if the 2030 Agenda is to be implemented, as this burden will drag nations into crisis if relevant measures are not taken.  The global community needs a sustainable solution and bold measures, he said, like debt cancellation for the most vulnerable and long‑term loans for others.  An attempt must also be made to combat illicit financial flows, which impoverish developing countries, he said, adding that criminal and financial sanctions must be imposed on countries accessing these assets.  He also emphasized the need to end unilateral economic sanctions, which smother societies and have no place in the twenty‑first century.

The representative of the Maldives, associating himself with the Group of 77 and the Alliance of Small Island States, noted that developed economies used aggressive fiscal and monetary policies to avert a full‑fledged financial crisis caused by the pandemic.  However, developing countries lack the fiscal space to implement the complete suite of policies of many developed countries.  Collectively, the GDP of small island developing States fell by more than 6 per cent in 2020, compared with a fall of 2.2 per cent for all developing countries, he said.  Faced with this exceptional ordeal, small island developing States were still forced to spend almost 20 per cent of Government revenue on debt servicing.  In that context, he called for credit guarantee schemes to help reduce developing country borrowing costs and urged the international community to implement simplified access to finance for small countries.

The representative of the Russian Federation, calling upon the Member States to speedily conclude the multilateral trading system reform, emphasized the need to gain progress in the talks on agriculture, fishing subsidies and dispute settlement mechanism during the twelfth WTO Ministerial Conference.  He further urged to facilitate joining of the WTO by new members — a precondition for the regionalization of global trade.  Against this backdrop, he recalled the Green Corridors Initiative put forward by the Russian Federation, noting adverse impact of unilateral punitive measures on world trade and the global financial system.  Reiterating that international financial institutions should contribute to sustainable development in an unbiased and nonpartisan manner, he expressed support to the role of the UNCTAD/WTO International Trade Centre in increasing and diversifying exports in low-income countries.  Noting that his country will further strengthen the potential of reginal banks to expand soft loans, he detailed Russia’s debt‑for‑development initiative, which helped to waive public debt for Cuba, the Democratic People’s Republic of Korea, the United Republic of Tanzania and Mozambique.  He further urged Member States to consider his country’s initiative on the development of a new international instrument, which compliments the United Nations Convention against Corruption.

The representative of Belarus said that the international trade system requires more balance, while the reform of international financial architecture does not consider the interests and the role of middle-income and developing countries.  Drawing attention to the negative impact of the pandemic on the macroeconomic situation in middle-income countries, he stressed that post-pandemic economic recovery requires investments into sustainable development.  Against this backdrop, he recalled UNCTAD recommendations for refraining from promulgating and applying any unilateral economic, financial or trade measures that impede the full achievement of economic and social development, particularly in developing countries.  Detailing his country’s Integration Initiative, he noted that regional economic integration can become a way forward in the post-pandemic recovery and contribute to the achievement of the Sustainable Development Goals — a topic discussed during a recent conference organized jointly by Belarus and Barbados with support from UNICTAD.

The representative of Venezuela, associating herself with the Group of 77, said there is a need to establish a different international order.  Given the importance of trade in achieving growth, she said an international trade system that is just, equitable and inclusive and that considers the situations of and differentiates treatment of developing countries is urgently needed.  Financial institutions persist in increasing structural imbalances that benefit only developed countries.  In that regard, she called for democratization in the decision-making processes in international financial institutions to ensure greater participation by developing countries.  Debt relief as a catalyst to sustainable development should consider the true payment capacity of developing countries.  She called for the faster mobilization of resources to help implement the 2030 Agenda and urged developed countries to meet their commitments.  Noting the harmful effects of unilateral economic measures on development outcomes, she urged the immediate cessation of the blockade imposed on her country by the United States.

The representative of Nigeria, associating herself with the Group of 77 and the African Group, said facilitating access to financial resources, technology, innovation, capacity‑building and a fairer international trading system — as well as addressing illicit financial flows — are critical to achieving the 2030 Agenda.  There is also an urgent need to address the systemic imbalance and institutional deficiencies in the global tax treaties and structure, particularly the lack of an inclusive and normative foundation framework, which hinders efforts to combat tax abuse by multinational corporations — a genuine dilemma for developing countries.  Welcoming the report of the High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda, known as the FACTI Panel, she also stressed the importance of improving stimulus measures to increase the flow of long-term trade and investment, and promote investment opportunities in developing countries.  Meanwhile, in the face of dwindling ODA, all actors must collectively promote a non-discriminatory, equitable trading system under the WTO and recommit to advancing its necessary reforms.

The representative of Zambia, aligning himself with the Group of 77, the African Group and the Group of Landlocked Developing Countries, said his country is facing many economic challenges that have been compounded by its high debt level and the pandemic.  Zambia experienced negative growth in manufacturing and trade, for example, and tourism was down.  The treasury department lost tax revenues as manufacturing plants and businesses closed and/or were forced to spend money on pandemic interventions.  The Government attempted to reprofile its public debt to bring it to a sustainable amount.  For example, the Government applied to its creditors for a debt service suspension, under mechanisms established by the Group of 20 and Paris Club, and requested similar treatment from its commercial creditors.  He reiterated the Government’s support of the work of the Second Committee.

The representative of Angola, aligning herself with the Group of 77 and African Group, said the pandemic has exposed structural weaknesses in implementing the 2030 Agenda as well as the need to provide adequate assistance to developing countries.  Her country has put in place an extensive 4 million dose vaccination campaign, which should help in putting Angola on the road to recovery.  It is already showing the first signs, with a 1.2 per cent GDP growth in 2021, but is also feeling inflationary pressures due to fluctuating commodity prices on the international market.  The Government has implemented programmes to spark production, but these will depend on its economic viability, which has also been impacted by climate change and the debt burden.

The representative of Togo, aligning himself with the Group of 77 and the African Group, said the contraction in global economic activity in 2020 negatively affected his country’s economy, mainly due to a decrease in commodity trading.  It is also suffering a deficit due to higher expenditures and development programmes have been impacted by the COVID‑19 health crisis, although Angola is now more resilient due to positive impact a quick Government response.  Manufacturing is still suffering due to the decrease in home incomes, which has resulted in a decrease in revenue and renumeration.  The country’s export sector has also been affected, with production being scaled back and slower deliveries due to the closure of borders.

The representative of Saudi Arabia said the Government placed great emphasis on international cooperation and in 2020 coordinated an extraordinary summit to address the consequences of the pandemic and private debt relief for low-income countries.  Saudi Arabia promotes economic reform in its country to counter the fallout of the pandemic and to root out corruption and illicit financial flows.  Saudi Arabia seeks to eradicate corruption in all its forms as corruption carries many dangers and perils.  The Government has created local legislation and a global network to counter corruption.  It has contributed $10 million for international partnerships.  Saudi Arabia is fully committed to international development.

The observer for the Holy See said the Committee’s work on macroeconomic policy should carefully consider the ethical implications of development in order to achieve economic prosperity for all.  While developed countries have been able to fend off a financial crisis, developing and least developed nations have fallen further into debt and poverty.  Pope Francis recently emphasized “relieving the burden of debt of so many countries and communities today is a profoundly human gesture that can help people to develop, to have access to vaccines, health, education and jobs”.  In recovering from the pandemic, the goal should not be a simple return to past practices, especially those that exclude the poor from the benefits of economic activity, he said, also emphasizing the need to redouble efforts to eliminate corruption.

The representative of the International Trade Centre said that strengthening the capacity of micro-, small and medium-sized enterprises to compete in and integrate into the global economy should be an important priority in the post-pandemic recovery phase.  Participation by micro-, small and medium-sized enterprises in world trade is essential for global prosperity and the achievement of the Sustainable Development Goals, she said.  Noting that those enterprises, which employ the most vulnerable members of society, have been hit hardest during the pandemic, she emphasized the need to assist them in benefitting from green trade and to also strengthen women’s economic empowerment.  Detailing the Centre’s work in this area, she pointed to several initiatives — GreentoCompete and e‑connect — that seek to transition micro-, small and medium-sized enterprises to the rules based multilateral trading system as well as to the green and digital economy.  She further pointed to the Centre’s commitment to promote sustainable trade for women‑owned businesses through a SheTrades Initiative, connecting women to international markets.  In the lead up to the fifth United Nations Conference for Least Developed Countries, she urged Member States to develop an actionable plan to support those countries to use trade as an engine for resilience and sustainable growth.

Groups of Countries in Special Situations, Towards Global Partnerships

The representative of the Russian Federation stressed the need for enhanced production capacity and export creation to facilitate robust economic systems in landlocked and least developed countries to assist them in withstanding future shocks.  He also urged the international community to reinforce partnerships in assisting them to achieve the Sustainable Development Goals.  Even before the pandemic, private flows to such nations began to peter out, suggesting the approach to this type of funding is failing.  The interests of businesses should be borne in mind in building partnerships based on mutual benefit and respect in line with the United Nations Global Compact.  Stressing the tremendous potential in green investment and pooling of financial efforts, he urged the global community to harness cooperation with the private sector.

The representative of Lesotho, aligning himself with the Group of 77 and the African Group, said he remains optimistic that a comprehensive transformation of least developed country economies can be achieved, although this means the United Nations system must renew its commitments on development for vulnerable nations.  He expressed confidence the international community and its partners will honour their commitments to implement the Vienna Programme of Action.  Adding that Lesotho faces a myriad of challenges, including its landlocked status, adverse climate change, fragile health‑care system, pandemic affects and debt levels, he underscored the importance of solidarity in attaining the Sustainable Development Goals in least developed and landlocked countries.

The representative of Paraguay, aligning himself with the Group of 77 and the Group of Landlocked Developing Countries, said cooperation between groups of States in special situations is very important.  The pandemic created many challenges, yet it also helped forge best practices and lessons learned to help developing countries achieve the global goals.  In landlocked developing countries, the pandemic contributed to a decline in economic growth from 4.3 per cent in 2019 to -2.4 per cent in 2020.  This shows the vulnerabilities of landlocked developing countries.  The pandemic also showed the importance of the Vienna Programme of Action, which will be reviewed in 2024 and helps the least developed countries, the landlocked developing countries and small island developing States.  These countries need support to achieve the Sustainable Development Goals and build resilience.

The observer for the Holy See said the pandemic has diverted resources that landlocked developing countries need to achieve the global goals.  One area that requires urgent action is investment in people so as to eradicate hunger and strengthen health‑care systems to reduce the high rate of maternal deaths.  Trade is also important as it can help expand the economies of developing countries.  The next programme of action to support least development countries must address climate change.  The pandemic has exacerbated the vulnerabilities of people living in landlocked developing countries.  Mobility restrictions have disrupted the flow of essential goods, such as pharmaceuticals and medical goods.  These countries also need increased digital connectivity.  The initiatives of the Holy See around the world will help least developed, landlocked developing and small island developing States.

 

Source: United Nations