UN SG: Unless we act now, COVID-19 will cause unimaginable devastation and suffering

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United Nations Secretary-General António Guterres delivered the following remarks today to a high-level event on financing for development. The Prime Ministers of Canada and Jamaica co-hosted the meeting.

Excellencies, ladies and gentlemen, distinguished guests,

I thank you all for your solidarity, and I thank the Prime Ministers of Canada and Jamaica for co-hosting this meeting.

Unless we act now, the COVID-19 pandemic will cause unimaginable devastation and suffering around the world.

Hunger and famine of historic proportions.

Sixty million more people pushed into extreme poverty.

Up to half the global workforce – 1.6 billion people – without livelihoods.

A loss of $8.5 trillion in global output – the sharpest contraction since the Great Depression of the 1930s. We must avoid it.

The pandemic has demonstrated our fragility. Despite all the technological and scientific advances of recent decades, we are in an unprecedented human crisis, because of a microscopic virus.

We need to respond with unity and solidarity. A key aspect of solidarity is financial support.

I welcome the swift actions that have already been taken by the International Monetary Fund, the World Bank Group, the regional development banks and other international financial institutions and the G20.

But many developing countries lack the means to fight the pandemic, and to invest in recovery.

Excellencies,

Today, we are asking for immediate, collective action in six critically important areas.

First, global liquidity. A rush to safety has triggered an outflow of capital from some key emerging economies.

Many other countries have seen their fiscal space reduced by the virtual standstill of economic activity, preventing them from being able to import essential medical supplies.

This is where the health crisis meets the economic crisis, in a dangerous nexus that could prolong and deepen both.

Existing mechanisms are stretched to capacity, and the resources of the International Monetary Fund may not be enough.

We have the tools to enhance global liquidity; I urge you to use them, and especially to consider a new issuance of Special Drawing Rights.

Second, sovereign debt. The economic fallout from the pandemic threatens to cause a wave of defaults in developing countries.

Widespread debt crises will set back the response to COVID-19 and impede sustainable development for many years to come. The countries affected would have no prospect of achieving the Sustainable Development Goals.

The G-20 debt moratorium is a first step. But it only covers the Least Developed Countries.

I recently had the opportunity to visit several Caribbean and Pacific islands – middle-income countries that have made steady economic progress, despite being on the front lines of the climate crisis.

Thanks to early and decisive action, they have largely been spared the health impact of COVID-19.

But many are heavily indebted, and their economies are now in freefall.

Small island states rely heavily on tourism and remittances. Both are now at a standstill. Households that had a secure income are at imminent risk of poverty and hunger.

Many developing and even middle-income countries are highly vulnerable and already in debt distress – or will soon become so, due to the global recession.

Alleviating crushing debt cannot be limited to the Least Developed Countries.

It must be extended to all developing and middle-income countries that request forbearance as they lose access to financial markets.

We urgently need durable solutions on debt, to create space for investments in recovery and the Sustainable Development Goals.

My third point concerns the private creditors who hold a growing share of developing countries’ sovereign debt. Any comprehensive solution on debt must include constructive dialogue towards engaging these creditors to find solutions.

We need creative ways and incentives to encourage commercial creditors to join debt relief efforts.

Fourth, external finance. Direct investment, exports and remittances are dropping sharply. We cannot allow this decline to become entrenched.

We need a clear signal of confidence boost to relaunch investment in sustainable development. Aligning incentives in global financial systems with the SDGs would send just such a signal.

Fifth, illicit financial flows.

Tax avoidance, tax evasion, money-laundering, and corruption already deprive developing countries of hundreds of billions of dollars every year.

We must plug the leaks. And in the medium term, we need the courage and determination to revise national systems and international networks.

Sixth, we must recover better.

COVID-19 has exposed and is exacerbating deep inequalities and injustices that we must tackle – including gender inequality. The economic impacts are worse for women, who typically have fewer savings and lower incomes than men.

All our efforts must go towards building sustainable and resilient pathways that enable us not only to beat COVID-19, but to tackle the climate crisis, reduce inequality and eradicate poverty and hunger.

The 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change address precisely the failures that are being exposed and exploited by the pandemic.

The United Nations is mobilized to support countries in implementing these agreements throughout and beyond COVID-19.

Excellencies,

These are challenging and dangerous times. We must face them with all urgency, seriousness and responsibility.

Getting through COVID-19 and recovering better will cost money. But the alternative will cost far more.

This is a global crisis, and it’s up to all of us to solve it.

Let’s do it together and I thank you.