STATEMENT ON BEHALF OF THE GROUP OF 77 AND CHINA BY H.E. MR. PEDRO L. PEDROSO CUESTA, AMBASSADOR EXTRAORDINARY AND PLENIPOTENTIARY, CHAIR OF THE GROUP OF 77, AT THE GENERAL DEBATE OF THE 2023 ECOSOC FINANCING FOR DEVELOPMENT FORUM (New York, 17 April 2023)
Excellencies and Colleagues,
It is my honor to deliver this statement on behalf of the G77 and China.
We gather again this year at the FfD Forum in a context of huge challenges and uncertainties. Confronted with the reality of leaving entire populations behind because of the failure of the international community to reach the SDGs, exorbitant debt burden that has deeply impacted economies in the Global South, especially in low and middle income countries, and the increasing global challenges, including the negative effects of climate change that threatens the very survival of many small island developing states and deepen the vulnerability of others, the G77 expects to have a meaningful debate on the centrality of development finance to overcome those challenges.
Concrete actions by developed countries to deliver on previous commitments, as well as on the reform of the international financial architecture are essential for that transformation.
It has been almost a decade since the adoption of the Declaration of Addis Ababa on Financing for Development. Multiple pledges have been made since then.
Contrary to the notion of progress, we find ourselves in a situation where our people is even more in need now than years before. The IMF is forecasting that a third of the global economy will be in recession in 2023. For the first time, UNDP has found that human development is falling in nine out of 10 countries.
The high cost of borrowing prevents the capacity of developing countries to invest in the SDGs and it also raises the risk of debt default. For countries in the Global South interest rates can be eight times higher than those in developed countries, as highlighted by the Secretary General, who has pointed out as well that today 25 developing economies are spending over 20 per cent of government revenues solely on servicing debt. It is necessary a comprehensive review of the IMF surcharge policy due to its regressive and pro-cyclical character. The review should consider a suspension of surcharges to support countries with severe balance of payments constraints, a significant permanent reduction in surcharges or their elimination.
Since its inception, the G77 and China has been advocating for a new international economic order. Now it´s more evident than ever that these transformations cannot wait any longer. The UN Secretary General recently recognized that the Global Financial System is biased, morally bankrupt and skewed to benefit wealthy countries. This is not a plea anymore of developing countries.
The G77 and China has repeatedly underline what are the main actions to take in order to build a more inclusive world.
To this aim, the reform of the international financial architecture cannot continue to wait. We need to strengthen the participation of developing countries in decision making on economic and financial matters. This implies:
a) Further governance reform in IFIs, especially the IMF and the World Bank;
b) An improved global sovereign debt architecture with the meaningful participation of developing countries;
c) The voluntary rechanneling of unutilized Special Drawing Rights (SDRs) to developing countries and a new allocation of SDRs;
d) Inclusive and effective platforms to design and discuss international tax rules and norms at the UN.
e) An early and sizeable recapitalization of the Multilateral Development Banks to meet the significant financial needs of developing countries.
Second, we call upon the international community to follow up and support the UN Secretary-General's proposal for an "SDG Stimulus" for developing countries, in particular the most in need and distressed countries, which aims at massively scaling up affordable long-term financing for development and aligning financing flows with the SDGs.
Third, we urge developed countries to fulfill their unmet ODA commitments to developing countries to achieve the target of 0.7 % of gross national income and 0.15 to 0.20 % of ODA to the least developed countries.
Fourth, the Group emphasizes the need for special and differential treatment for developing countries in harnessing the developmental benefit of international trade and the importance of a multilateral trading system that relies on universal, rule-based, open, transparent, inclusive and non-discriminatory rules as embodied in the WTO agreements.
In this connection, the Group remains deeply concern and rejects the increasing trend by developed countries partners to impose unilateral and protectionist measures that undermine the multilateral trading system and negatively impact the access of developing countries' exports to the global markets.
Fifth, the climate change agenda must be fully implemented in accordance with the UNFCCC and its Paris Agreement and upholding the principle of equity and common but differentiated responsibilities and respective capabilities. In this regard, it is critical to materialize the mobilization of resources by developed countries to tackle climate change. It is deeply disappointing that the goal to mobilize 100 billion dollars by developed countries per year up to 2020 was never met.
Finally, we emphasize that as stated in the 2030 Agenda, States are strongly urged to refrain from promulgating and applying any unilateral economic, financial or trade measures not in accordance with international law and the Charter of the United Nations that impede the full achievement of economic and social development, particularly in developing countries.
As we have just outlined, the solutions to address the current critical inequalities are there. It only requires political will to make this happen.
I thank you.