STATEMENT ON BEHALF OF THE GROUP OF GROUP OF 77 AND CHINA BY MR. MUHAMMAD IMRAN KHAN, COUNSELLOR, PERMANENT MISSION OF PAKISTAN TO THE UNITED NATIONS, AT THE 6TH RETREAT OF THE GROUP OF FRIENDS OF MONTERREY (New York, 17 March 2022)
Ladies and Gentlemen,
Today the world is facing a triple challenge: recovery from the Covid-19 Pandemic; achievement of the SDGs; and combating climate change.
The pandemic has affected the developing countries disproportionately. Both because of weakened health systems and meager resources, millions in our countries have suffered enormously.
While the developed countries have been able to inject massive financial stimulus - of over $17 trillion, most of the developing countries are still in the grip of the most severe recession in a century and have not been able to generate $4.3tn per year required for recovery and achieve the SDGs during the remaining of the decade. At the same time, the tightening of monetary policy and rising of interest rates in major developed economies may have negative consequences in developing countries, including on access to capital and increasing the costs of future investments.
It is feared that owing to the extreme economic hardship, unsustainable debt burden, high borrowing cost, rising inflation, illicit financial flows, and difficulties in accessing concessional finance many developing countries would not be able to recover soon from the crisis and achieve the SDGs in the remaining of the decade.
The relief measures arranged by the G20, IMF and other financial are welcome but further work is required. The great financial divide referred by the Inter-Agency Task Force is also compounded by development divide, digital divide, and a vaccine divide.
In order to recover inclusive, resilient and sustainable, the developing countries need to uphold their commitments made under various multilateral instruments such as Addis Ababa Action Agenda, the Paris Agreement, and the 2030 agenda.
First and foremost, we stress the need to combat illicit financial flows from the developing countries. They are draining the ability of developing countries to achieve sustained growth and development.
We need to strengthen international cooperation on tax matters, and strengthen international coordination on illicit financial flows based on existing mechanisms.
Second, promoting investment in sustainable, resilient and quality infrastructure is critical for an inclusive COVID-19 recovery and for acceleration towards the achieving the SDGs.
Third, commitment by the developed countries of 0.7% ODA has never been achieved. All development partners should build trust with recipient countries and align their support with their national sustainable development.
Fourth, the time has come to urgently develop measurements of progress on sustainable development that complement GDP in order to have a more inclusive approach reflecting all kinds of vulnerabilities and to inform access to international cooperation and concessional finance, including the ongoing work on the creation of a multidimensional vulnerability.
Fifth, for international trade to serve as a powerful engine for economic development it is important that industrialized countries eliminate tariff peaks, tariff escalations and increase market access for agricultural and industrial products from developing counties.
Sixth, increasing debt vulnerabilities, and tightening of global financial conditions are a major cause of concern among developing countries. It is crucial to urgently reform international financial architecture for long-term debt sustainability.
Seventh, the new general allocation of $650bn SDRs by the IMF is a welcome development. Now advanced economies should voluntarily channel at least $250bn of their unutilized special drawing rights to the developing countries in need.
Eighth, credit ratings play important role in international capital markets as they provide creditors with assessments of a debtor Biased or inaccurate ratings can impact the cost of borrowing and the stability of the international financial system, as demonstrated during the 2008 global financial crisis.
Given the wide reach of private credit rating agencies and their decisive role in either facilitating or hampering progress on debt treatment and affecting the cost of borrowing, it would be important to proactively engage with the establishment of a publicly controlled credit rating agency.
Ninth, commitment by developed countries to provide US$100 billion per year by 2020 as climate finance is already overdue. It is important that developed countries honor their commitment and provide financial resources of at least USD 100 billion per year to assist developing countries, without innovative accounting.
As agreed at Glasgow, a new collective quantified climate finance goal from a floor of $100 billion per year and by 2024 must be set in order to adequately address the needs of developing countries. Also climate finance towards adaptation needs to be at least doubled.
I thank you.