GENEVA, May 27 (IPS) – Rebeca Grynspan is UNCTAD Secretary-General Climate change, COVID-19, the war in Ukraine – these crises threaten to derail the development of 1.7 billion people most vulnerable in the world. The international community must quickly take coordinated action now to get the SDGs back on track.
In just two short years, a double blow of external shocks has skewed global development and left the ambitions of the 2030 Agenda uncertain. In the aftermath of the COVID-19 pandemic, developing countries are particularly vulnerable and exposed – a situation where the war in Ukraine has now turned into a “perfect storm” of crises. panic. The consequences are worrisome, not only for developing countries themselves, but also for the success of sustainable development globally.
Before the shot was fired in Ukraine, the pandemic had left deep scars across the developing world. Since 2019, the number of people experiencing hunger has increased by 46 million in Africa, by about 57 million in Asia, and by about 14 million in Latin America and the Caribbean.
An additional 77 million people are now living in extreme poverty. School closures have resulted in up to $17 trillion in losses in the lifetime earnings of this generation of students. Meanwhile, more than six million lives have been lost to COVID-19.
After a strong though uneven economic recovery in 2021, marked by supply chain disruptions and rising inflation for decades, the war in Ukraine caught the world economy off guard. , rocking global markets for food, fertilizer and fuel, with both Russia and Ukraine playing an oversized role. This has led to a historic rise in commodity prices and a general tightening of global financial conditions.
The magnitude of the “unique punch” that the war in Ukraine has inflicted on developing economies in the wake of the COVID-19 crisis is only mitigated by the complexity of the transmission channels through which the shock spreads. through commodity and financial markets.
Rising prices of energy commodities, food and fertilizers lead to higher rates of inflation. These are tightening the budgets of households, especially in the poorest families, who spend most of their incomes on food and energy. Higher energy costs and lower spending are destroying demand while shutting down production. Already congested supply chains are being disrupted by abrupt trade transitions due to sanctions, and competition for goods in general, increasing the cost of trade.
Higher inflation causes interest rates to rise, which increases the cost of debt. And all of this is affecting the most vulnerable – women facing economic insecurity, children forced to leave school to work, the poor before the war began. head.
Multiple channels of exposure means billions of people around the world are exposed. The United Nations Global Crisis Response Team estimates that 107 developing economies are severely impacted by at least one of these three transmission channels – rising food prices, rising energy prices, and rising food prices. tight financial conditions. About 1.7 billion people live in these countries, 553 million of whom are already poor and 215 million of them are malnourished.
And yet, even if just one transmission channel is enough to cause a crisis, overexposure and overlap are the rule, not the exception. Indeed, of these 107 countries, 69 are exposed to significant or severe exposure to all three transmission channels at the same time, presenting enormous challenges to their 1.2 billion residents. .
The strength of the global economy to respond to crises on such a large scale already exists, as the developed economies’ response to the COVID-19 pandemic demonstrates. While the decline in global GDP during COVID-19 was more than double that of the Great Recession in the late 2000s, the pandemic’s impact on major economies quickly dissipated thanks to efforts to unprecedented stimulus of the richest nations.
But it is important to note that developing economies do not possess the same size of firepower. They have seen their debt burdens pile up during the COVID-19 crisis, and now they fear being pushed over the edge by a crisis caused by the war in Ukraine – a crisis not caused by the war in Ukraine. they create themselves. The International Monetary Fund (IMF) finds that more than 60% of low-income developing countries are currently experiencing or at risk of falling into poverty.
Lay the foundation for reform
The challenge facing our international financial architecture today is that it was built primarily to insulate the global economy from crises at the individual country level. But faced with the “perfect storm” of cascade crises – including climate change, pandemics and war – that hit so many developing countries at once, the system is limited in how it can deliver a systematic global response that supports all countries. all sizes.
We must harness the strengths of that system today to lay the groundwork for further reform tomorrow, a foundation on which progress towards the Sustainable Development Goals is reintroduced. right direction. A roadmap for system improvement is implicit in the ambitions of the SDGs, but to achieve that transition goal over the medium term, we must first avoid neglecting our steady progress toward that goal so far. , as happened with the pandemic. Therefore, we must use all the tools available to us to avoid the same thing happening as a result of this war.
We have to silence the gun. All countries must work together to limit the increase in food and energy prices fueled by the war in Ukraine, ensuring that essential goods go to those who need it most, not those who need it most. willing to pay a higher price.
We must commit to continuing to trade and avoid export bans on critical items. We have to make sure that this year’s harvest can be shipped from the Black Sea, and that next year’s harvest has enough fertilizer to plant when needed, especially on small-scale farms. And we must work with the private sector and civil society to extend much-needed support to the most vulnerable populations in our countries.
This means using all the means available at the IMF and World Bank, including Reliability and Resilience of the IMFand small island developing countries now have an IDA Facility, but also seriously engage in a multilateral dialogue on debt sustainability before it is too late.
The only way to weather the “perfect storm” is together. The international community has the means to parry and prevent enormous human suffering, an unacceptable increase in inequality, and the world is entering an era of social and political instability. The solutions and resources are all there. Now we need the political will to reach them. I know it’s not easy. But the world is waiting. And time is up.
First published by Action SDGan initiative of the United Nations Sustainable Development Solutions Network.
© Inter Press Service (2022) – All rights reservedOrigin: Inter Press Service
