New York, March 25 – The United Nations called for spending US$70-120 billion in the next two years and US$20-40 billion annually thereafter in sustainable and smart investment in order to significantly reduce the possibility of another pandemic.

It said such a spending contrasted with the economic losses worth trillions of dollars to the world economy inflicted by the pandemic.

The call followed the release of The Financing for Sustainable Development Report 2021, which said the pandemic has widened the already unequal world and led to the elimination of development gains achieved in the last decade by millions of people in poor countries.

 The report, a joint product of 60 United Nations agencies, said the pandemic has caused the worst recession in 90 years to the global economy and has affected disproportionately the world’s most vulnerable people. The pandemic has also eliminated 114 million jobs and pushed about 120 million people in extreme poverty.

The report said, “sustainable and smart investment, for example in infrastructure, would reduce risks and make the world more resilient to future shocks. It would create growth; allow better life for millions; and combat climate change. “

“Provide ultra-long-term financing [e.g., over 50 years] to developing countries, at fixed interest rates, to take advantage of current historically low interest rates; 

“Better use public development banks as a tool for sustainable development investment; 

Reorient capital markets toward aligning with sustainable development by removing short-term incentives along the investment chain and mitigating the risk of Sustainable Development Goals-washing. “

The report recommended to: 

“Find a global solution for taxation of the digital economy to combat corporate tax avoidance, reduce harmful tax competition; and better use technology to combat illicit financial flows. 

Create a global reporting framework to hold companies accountable for their social and environmental impact and incorporate climate risks into financial regulation.”

“Review regulatory frameworks, such as antitrust regulations, to reduce the market power of large digital platforms. 

Modernize labour market and fiscal policies to reflect the reality of a changing global economy, including an increasingly digitalized world. “

Only immediate action can prevent a lost decade for development for many countries.”

“What this pandemic has proven beyond all doubt is that we ignore global interdependence at our peril. Disasters do not respect national boundaries,” UN Deputy Secretary-General Amina Mohammed said. “A diverging world is a catastrophe for all of us. It is both morally right and in everyone’s economic self-interest to help developing countries overcome this crisis.” 

“The growing gap between rich and poor countries is troublingly retrogressive, and requires an immediate course correction,” said UN Under Secretary-General Liu Zhenmin, Under-Secretary-General of the Department of Economic and Social Affairs, which produced the report. “Countries must be helped to not only stay afloat financially, but to invest in their own development. To rebuild better, both the public and private sectors must invest in human capital, social protection, and sustainable infrastructure and technology.” 

The world’s response to the pandemic has been highly uneven and has widened the gap between rich and poor. The report cited a historic total of US$16 trillion in stimulus and recovery funds have been approved to fight the pandemic and restore the economy, but less than 20 per cent of that amount was spent on developing countries. It said by January 2021, all but nine of the 38 countries rolling out vaccines were developed countries.  

The report urged immediate action from governments, including: 

Reject vaccine nationalism and step up contributions to the Access to COVID-19 Tools Accelerator to close the remaining funding gap of over US$20 billion for 2021; 

Meet the 0.7% Official Development Assistance (ODA) commitment and provide fresh concessional financing for developing countries, especially least developed countries; 

Avert debt distress by providing liquidity and debt relief support so developing countries can fight COVID-19 and its economic and social fallout. 

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