Amid a global crisis of economic inequality, gathering at UN to call for bold measures to close finance divide

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19 April 2023
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United Nations Economic Commission for Africa (Addis Ababa)
press release

NEW YORK, 17 April –  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.

Deliberations at the Forum will focus on taxation, food and commodities, bolstering private sector investment in developing countries and climate financing for adaptation among other areas. The Forum will be flanked by  the  SDG Investment Fair  on 18 to 20 April where six participating countries will present concrete investment opportunities, which taken together, represent several billion dollars in potential deal flow, and the opportunity to advance SDG action in key sectors such as sustainable food systems, clean energy, and transportation. The Forum will also include a Special High-Level Meeting with the Bretton Woods Institutions, UNCTAD and WTO on 18 April 2023.

-Ends-

About the United Nations Economic Commission for Africa

Established by the Economic and Social Council (ECOSOC) of the United Nations (UN) in 1958 as one of the UN's five regional commissions, the United Nations Economic Commission for Africa's  (ECA's) mandate  is to promote the economic and social development of its  Member States , foster intraregional integration and promote international cooperation for Africa's development. ECA is made up of 54 Member States and plays a dual role as a regional arm of the UN and as a key component of the African institutional landscape.

For more information, visit:  www.uneca.org

 

Issued by:

Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org

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