A second chance for global development

GENEVA – Second chances are not common in this world, but they are happening now. The COVID-19 pandemic has tested the responsiveness of governments and the resilience of economic systems around the world, and has altered social behavior and personal habits in ways previously unthinkable. There were also reasons for hope in the midst of suffering. The dedication of essential workers has been inspiring, as the global scientific community has harnessed the power of collaborative research and public money to develop safe and effective COVID-19 vaccines at breakneck speed.

A global economic recovery began in the second half of 2020, as countries found less drastic ways to manage the health risks of the pandemic and launched vaccination programs. Global growth is expected to reach 5.3% this year, the highest rate in nearly half a century. But the outlook beyond 2021 is uncertain, given disparities in countries’ financial resources, the prospect of new coronavirus variants and very uneven vaccination rates.

A return to the pre-pandemic political paradigm, which spawned the decade of the weakest global growth since 1945, would be a disaster. This is especially true for developing countries, where the economic damage caused by COVID-19 has surpassed that resulting from the global financial crisis a decade ago, in some cases by far.

The new US administration’s support for the recent allocation of $ 650 billion in Special Drawing Rights (SDRs) from the International Monetary Fund, as well as a global minimum corporate tax rate and waiver of corporate rights. intellectual property related to the COVID-19 vaccine, suggests a possible renewal of multilateralism. Progress will depend on better policy coordination among major economies as they strive to maintain the momentum of the recovery, build resilience against future shocks and address the growing climate crisis. urgent. But better coordination will not be enough to rebuild better. Above all, developing countries need renewed international support. Many of them face a spiraling public health crisis as a result of the pandemic, even as they grapple with a growing debt burden and face the prospect of a lost decade of economic growth. .

The donation or on-lending by high-income countries of unused SDRs, including more of the recent allocation of $ 650 billion, could help finance developing countries’ efforts to meet the Sustainable Development Goals. Despite recent setbacks, UN Secretary-General António Guterres recently stressed that “we have the knowledge, the science, the technology and the resources” to get the SDGs back on track. “What we need is a common goal, effective leadership from all sectors and urgent and ambitious action.

The American Marshall Plan, which enabled Europe to rebuild itself after World War II, has been rightly referred to as a model for such efforts. But what is missing today is a bold, human-centered narrative that abandons the outdated tropes of the free market and instead connects shared global political challenges to improving people’s daily lives, which they may live in Bogotá, Berlin, Bamako, Busan or Boston. .

This means creating more jobs that guarantee a secure future for workers and their families. This means not only expanding fiscal space, but also ensuring that the taxes people pay translate into adequate public services and social protection. In addition to responsible sovereign borrowing, policymakers should ensure that the debts people incur to put a roof over their heads or send their children to school are not a lifelong burden. Finally, governments must not only price carbon appropriately, but also preserve the natural environment for future generations.

Forty years ago, the first Trade and Development Report of the United Nations Conference on Trade and Development called for a new paradigm “to take explicit account of the fact that questions concerning the management of the world economy , on the one hand, and long-term development goals on the other, are intertwined. Instead, policymakers have since relied far too much on market forces to make that connection. This approach failed. Worse, the corrosion of public services, the grip of the state by vested interests and the deregulation of labor markets over the past four decades have taken their toll on citizens’ trust in their political representatives.

Today, building back better depends on the emergence of a new political paradigm, this time around to help guide a just transition to a carbon-free world. The crucial question is whether governments will jointly adopt the necessary measures. If they act separately, this crisis will be just another missed opportunity. Project union


Rebeca Grynspan is a former Vice President of Costa Rica. She is Secretary General of the United Nations Conference on Trade and Development.

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