2021 ECOSOC Forum on Financing for Development (3rd Meeting)

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13-Apr-2021 04:08:25
Panels seek ways to avoid global post-COVID recovery that leaves some behind, as Forum on Financing for Development continues.

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The Economic and Social Council continued its annual Forum on Financing for Development today, holding two interactive panel discussions, during which speakers proposed potential solutions to COVID-19’s devastating impact on infrastructure investment — lagging even before the novel coronavirus struck — and sought ways to avoid a global post-pandemic recovery that leaves some behind.

Munir Akram (Pakistan), President of the Economic and Social Council, opened the meeting by emphasizing the global need for increased investment in sustainable infrastructure to meet development goals. Noting the untapped potential of the private sector to that end, he suggested that the upcoming investment fair based on the Sustainable Development Goals — which will allow Governments to present specific projects and concrete opportunities to the investor community — could evolve into a permanent fixture that promotes public-private partnerships to finance infrastructure development.

The President’s remarks set the tone for the subsequent panel on “Accelerating infrastructure investments for a sustainable and resilient recovery and restoring trade”, with many speakers concurring on the merits of such a public-private approach to infrastructure investment.

Leila Fourie, Chief Executive Officer of the Johannesburg Stock Exchange and Co-Chair of the Global Investors for Sustainable Development Alliance, said that, while the strain placed on Governments by COVID-19 compromised their ability to respond to an increasing infrastructure backlog, spending on infrastructure development can chart a path to recovery. Public-private partnerships are essential to such an endeavour, she emphasized, urging the public sector to support investment by establishing policy certainty in relevant sectors to assuage the concerns of potential investors, among other measures.

Offering a counterpoint, Maria José Romero, Policy and Advocacy Manager for Private Finance of the European Network on Debt and Development, highlighted civil society’s concerns about private sector investment in infrastructure, and emphasized that mobilizing private capital should not be seen as a goal in itself. Such a development strategy, she cautioned, could skew the selection of infrastructure development projects towards those that generate revenue and cause States to prioritize the protection of investors against risk instead of protecting the rights of their own citizenry.

The day’s second panel, on “Embracing shared solutions to finance sustainable development in a challenging environment”, saw experts from the Bretton Woods institutions, among other speakers, grapple with the spectre of divergent global recovery after the pandemic.

Merza Hussain Hasan, Dean of the Board of Executive Directors of the World Bank Group, cited data indicating that the pace of recovery is both diverging and positively correlated to vaccine rollouts. Pointing to the significant risks to the global economy posed by the emergence of vaccine-resistant variants of the coronavirus, he said the World Bank is allocating resources towards social safety nets, especially in fragile, conflict-affected and small States.

Ita Mannathoko, Chair of the International Monetary Fund’s (IMF) Liaison Committee with the World Bank, United Nations and other international organizations, said the world is facing a multi-speed recovery, with many low‑income countries suffering larger scarring. Estimates indicate that an additional 120 million people could fall into extreme poverty as a result of the crisis, she cautioned, declaring: “We must ensure this does not happen.” Developing countries need treatments, therapies, tests, continued debt relief and concessional financing, she stressed.

The panel also discussed how debt will influence recovery, with speakers noting that COVID-19 has caused an unprecedented rise in public debt.

Louise Levonian, Executive Director for Canada at the International Monetary Fund, pointed out that most low-income countries — already debt-distressed before the pandemic — now face a potential second wave of defaults, capital flight and austerity. She called for greater public-debt transparency, emphasizing that “without a complete picture of what a country owes, debtors and creditors cannot make good decisions”.

The Forum will reconvene at 9 a.m. on Wednesday, 14 April, to continue its work.

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