By Haruna Gimba
A major new United Nations report has called for the revamping of the Global Financial System.
Over 60 international organisations led by the United Nations including the International Monetary Fund (IMF), the World Bank and the World Trade Organisation jointly sounded the alarm in the report on Thursday at New York, United States.
The organisations warned that unless national and international financial systems are revamped, the world’s governments will fail to keep their promises on such critical issues as combating climate change and eradicating poverty by 2030.
In their 2019 Financing for Sustainable Development Report, the international organizations find some good news: investment has gained strength in some countries and interest in sustainable investing is growing, with 75 per cent of individual investors showing interest in how their investments affect the world.
“And yet, greenhouse gas emissions grew 1.3 per cent in 2017; investment in many countries is falling; and 30 developing countries are now at high risk or already in debt distress. At the same time, global growth is expected to have peaked at around 3 per cent.
“Changing the current trajectory in financing sustainable development is not just about raising additional investment,” says the report. Adding that, achieving global goals depends on supportive financial systems which includes conducive global and national policy environments.
The report warns that creating favorable conditions is becoming more challenging.
“Rapid changes in technology, geopolitics, and climate are remaking our economies and societies, and existing national and multilateral
institutions, which had helped lift billions out of poverty, are now
struggling to adapt.
“Confidence in the multilateral system has been undermined, in part because it has failed to deliver returns equitably, with most people in the world living in countries with increasing inequality.”
In his foreword to the report, the Secretary-General of the United Nations, António Guterres said trust in the multilateral system itself is eroding, “in part because we are not delivering inclusive and sustainable growth for all.”
“Our shared challenge is to make the international trading and financial systems fit for purpose to advance sustainable development and promote fair globalization,” he said.
The international agencies recommended concrete steps to overhaul the global institutional architecture and make the global economy and
global finance more sustainable, including supporting a shift towards long-term investment horizons with sustainability risks central to
Others are revisiting mechanisms for sovereign debt restructuring to respond to more complex debt instruments and a more diverse creditor
landscape; revamping the multilateral trading system; addressing challenges to tax systems that inhibit countries from mobilizing adequate resources in an increasingly digitalized world economy; and addressing growing market concentration that extends across borders, with impacts on inequality.
At the national level, the report puts forward a roadmap for countries to revamp their public and private financial systems to mobilize resources for sustainable investment. It introduces tools for
countries to align financing policies with national sustainable development strategies and priorities.
Under-Secretary-General for Economic and Social Affairs and Chair of the Task Force that issued the report, Mr. Zhenmin Liu said there is a major opportunity to overcome bottlenecks in sustainable financing in 2019.
“The responsibility rests with governments to recommit to multilateralism, and to take policy actions that will create a sustainable and prosperous future.”
Health Reporters gathered that the report is a joint product of the Inter-agency Task Force on Financing for Development, which is
comprised of more than 60 United Nations Agencies and international organizations.
The Financing for Sustainable Development Office of the UN Department of Economic and Social Affairs serves as the substantive editor and
coordinator of the Task Force, in close cooperation the World Bank Group, the IMF, WTO, UNCTAD, and UNDP. The Task Force was mandated by
the Addis Ababa Action Agenda and is chaired by Mr. Zhenmin LIU, Under-Secretary General for Economic and Social Affairs.
This report is the basis for discussions at the ECOSOC Forum on Financing for Development (April, 15-18 2019), where Member States agree on measures necessary to mobilize sustainable financing. The SDG Investment Fair, which brings together government officials and
investors, will also be held 15-16 April at the UN Headquarters.