Geneva, 24 February 2023 (TDI): The United Nations (UN) Sustainable Development Goals (SDGs) issued a report called ‘Building Blocks out of the Crisis.’ It calls for providing stimulus to developing economies to secure up to $148 billion in savings.
The building blocks to transform the global financial system are already being discussed at the #G20India but w/ the fracture between developed & developing countries escalating rapidly, we need to move from words to action.
— UN Development (@UNDP) February 24, 2023
It would happen if the international community restructured its existing debt and increases access to future affordable finance.
The report was issued ahead of the meeting of G20 Finance Ministers, and Central Bank Governors that are gathering in Bangalore, India, on 24th February 2023.
United Nations Development Programme (UNDP), called for action to protect developing nations from the impact of today’s overlapping crises. It also asked to ensure that financing is aligned to support a fair, inclusive, and equitable global transition.
Renovating global finance
Achim Steiner, the UNDP Administrator, said, “The building blocks to transform the global financial system will be discussed at the G20. With the fracture between developed and developing countries escalating rapidly, we need to move from words to action.”
The policy brief also identified 52 low and middle-income developing economies, that are facing debt distress or at high risk of debt distress. These countries account for more than 40 percent of the world’s poorest people.
High debt strains
According to UNDP, 25 countries are facing external debt strain that amounts to higher than 20 percent of total revenue.
Along these lines, Steiner said, “The countries most burdened by debt are also being battered by multiple other crises. They are most affected by the economic impact of COVID-19, poverty, and the accelerating climate emergency.”
“The time has come to address the deepening chasm between rich and poor countries & to change the multilateral landscape. We need to create a debt architecture that is fit for purpose in our complex, interconnected, and post-COVID world.” Steiner continued.
Additionally, George Gray Molina, UNDP Chief Economist, said that developing economies are not in a position of funding progress on the Goals or climate commitments.
“The billions of savings identified by UNDP can only happen if we collectively agree that it is time to de-risk development and climate financing.” He reiterated.