BANGKOK, 10 April 2020 – Governments must take immediate steps to prevent a potentially devastating debt crisis and address the economic and financial havoc wrought by the COVID-19 pandemic – says a new report from the United Nations-led Inter-Agency Task Force on Financing for Development.
The UN System’s 2020 Financing for Sustainable Development Report outlines measures to address the impact of the unfolding global recession and financial turmoil, especially in the world’s poorest countries. Its recommendations are based on joint research and analysis from the UN System, the International Monetary Fund, World Bank Group, and more than 60 UN agencies and international institutions.
Even before the outbreak of COVID-19, one in five countries – home to billions of people living in poverty – were likely to see per capita incomes stagnate or decline in 2020. Now, billions more are likely to be affected as governments struggle to cope with the pandemic.
“The global community was already falling behind in efforts to end poverty, take climate action and reduce inequalities,” said Deputy Secretary-General of the United Nations Amina Mohammed. “COVID-19 is the first of its kind development emergency and all countries must rise to the challenge to save lives and safeguard livelihoods in our response and recovery. We have one chance to build back better together for people and for the planet.”
Due to the COVID-19 crisis, global financial markets have witnessed heavy losses and intense volatility over the last month. Investors have moved around $90 billion out of emerging markets -- the largest outflow ever recorded.
Particularly alarming is the prospect of a new debt crisis, compounded by tumbling prices for oil and other key commodities. Many Least Developed Countries (LDCs) were already at high risk of debt distress and the fall-out from the current crisis could significantly increase the number.
In Asia and the Pacific, the 2020 Financing for Sustainable Development Report highlighted that the Covid-19 crisis has further subdued investment growth and tax revenues.
“To tackle COVID-19 in developing Asia-Pacific countries, ESCAP calls for an estimated increase in health emergency spending by $880 million per year through to 2030,” said Under-Secretary-General of the United Nations and Executive Secretary of ESCAP Armida Salsiah Alisjahbana.
“Fiscal support will be crucial in enhancing health responders’ ability to monitor the spread of the pandemic and caring for infected people,” she added.
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