UN report: Financial systems must change or SDGs will fail

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The 2019 “Financing for Sustainable Development Report,” a project of more than 60 agencies in the U.N. system along with partner organizations, sounds the alarm and outlines some recommendations for a path forward.

UN Deputy=Secretary General Amina Mohammed
UN Deputy-Secretary General Amina Mohammed

If national and international financial systems don’t change, the Sustainable Development Goals will not be achieved, according to a new report out from the United Nations on Thursday. “The world cannot achieve the SDGs without a fundamental shift in the international financial system to address urgent global threats,” U.N. Deputy Secretary-General Amina Mohammed said in a press conference Thursday.

The 2019 “Financing for Sustainable Development Report,” a project of more than 60 agencies in the U.N. system along with partner organizations, sounds the alarm and outlines some recommendations for a path forward.

Despite some progress on poverty reduction, the picture the report paints is bleak. World economic growth is holding at about 3 percent and unlikely to rise, seven times more dollars’ worth of goods are subject to trade restrictions compared to a year ago, and about 30 least-developed or vulnerable countries are in, or at high risk of, debt distress.

“Achieving sustainable development requires multilateral action to address global challenges; revisiting the global institutional architecture; and strengthened regional and national action, including adjusting policies to the changing global landscape,” according to the report.

 

Here are five key takeaways from the report about what needs to be done:

1. The multilateral system is under strain in a rapidly changing global environment. While this poses a challenge, it also “opens the door” to ensure that multilateral institutions are “fit for purpose,” Mohammed said. They need to adapt and reform. “Rather than retreating, we must strengthen collective action in support of sustainable development,” she said.

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2. There needs to be a remaking of global financial architecture — from sovereign debt, to international tax norms, to the international trade system. With so many countries facing debt challenges, new instruments and nontraditional creditors have created gaps in the current systems. As reforms to debt reduction are discussed, they should consider whether debt restructuring or reduction programs can be tied to future social sector spending that less debt can unlock, Mohammed said. An increase of digitalization has also raised questions about how changes to the global tax system could be changed to address inequities.

3. Countries need to take action on the national level to create national financing frameworks that support their national development plans. These frameworks were introduced at the Addis Ababa financing summit, but it’s time to start creating and using them, Mohammed said.

 

This article was originally published on Devex; it appeared on the digital media platform on April 05, 2019  

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