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Panels Seek Ways to Avoid Global Post-COVID Recovery That Leaves Some Behind, as Forum on Financing for Development Continues

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The Economic and Social Council continued its annual Forum on Financing for Development today, holding two interactive panel discussions, during which speakers proposed potential solutions to COVID-19’s devastating impact on infrastructure investment — lagging even before the novel coronavirus struck — and sought ways to avoid a global post-pandemic recovery that leaves some behind.

Munir Akram (Pakistan), President of the Economic and Social Council, opened the meeting by emphasizing the global need for increased investment in sustainable infrastructure to meet development goals. Noting the untapped potential of the private sector to that end, he suggested that the upcoming investment fair based on the Sustainable Development Goals — which will allow Governments to present specific projects and concrete opportunities to the investor community — could evolve into a permanent fixture that promotes public-private partnerships to finance infrastructure development.

The President’s remarks set the tone for the subsequent panel on “Accelerating infrastructure investments for a sustainable and resilient recovery and restoring trade”, with many speakers concurring on the merits of such a public-private approach to infrastructure investment.

Leila Fourie, Chief Executive Officer of the Johannesburg Stock Exchange and Co-Chair of the Global Investors for Sustainable Development Alliance, said that, while the strain placed on Governments by COVID-19 compromised their ability to respond to an increasing infrastructure backlog, spending on infrastructure development can chart a path to recovery. Public-private partnerships are essential to such an endeavour, she emphasized, urging the public sector to support investment by establishing policy certainty in relevant sectors to assuage the concerns of potential investors, among other measures.

Offering a counterpoint, Maria José Romero, Policy and Advocacy Manager for Private Finance of the European Network on Debt and Development, highlighted civil society’s concerns about private sector investment in infrastructure, and emphasized that mobilizing private capital should not be seen as a goal in itself. Such a development strategy, she cautioned, could skew the selection of infrastructure development projects towards those that generate revenue and cause States to prioritize the protection of investors against risk instead of protecting the rights of their own citizenry.

The day’s second panel, on “Embracing shared solutions to finance sustainable development in a challenging environment”, saw experts from the Bretton Woods institutions, among other speakers, grapple with the spectre of divergent global recovery after the pandemic.

Merza Hussain Hasan, Dean of the Board of Executive Directors of the World Bank Group, cited data indicating that the pace of recovery is both diverging and positively correlated to vaccine rollouts. Pointing to the significant risks to the global economy posed by the emergence of vaccine-resistant variants of the coronavirus, he said the World Bank is allocating resources towards social safety nets, especially in fragile, conflict-affected and small States.

Ita Mannathoko, Chair of the International Monetary Fund’s (IMF) Liaison Committee with the World Bank, United Nations and other international organizations, said the world is facing a multi-speed recovery, with many low‑income countries suffering larger scarring. Estimates indicate that an additional 120 million people could fall into extreme poverty as a result of the crisis, she cautioned, declaring: “We must ensure this does not happen.” Developing countries need treatments, therapies, tests, continued debt relief and concessional financing, she stressed.

The panel also discussed how debt will influence recovery, with speakers noting that COVID-19 has caused an unprecedented rise in public debt.

Louise Levonian, Executive Director for Canada at the International Monetary Fund, pointed out that most low-income countries — already debt-distressed before the pandemic — now face a potential second wave of defaults, capital flight and austerity. She called for greater public-debt transparency, emphasizing that “without a complete picture of what a country owes, debtors and creditors cannot make good decisions”.

The Forum will reconvene at 9 a.m. on Wednesday, 14 April, to continue its work.

Opening Remarks

MUNIR AKRAM (Pakistan), President of the Economic and Social Council, opened the virtual interactive panel discussion by emphasizing the need for global infrastructure transformation across sectors, including energy, transportation, housing and agricultural production models. Investments in sustainable infrastructure in the amount of $120 trillion are needed over the next 30 years if the target of zero carbon emissions by 2050 is to be reached. While pointing to private capital’s considerable desire to invest in sustainable infrastructure projects, he also noted its historical reluctance to invest in long-term projects with sizeable up-front payments and uncertain returns.

He went on to stress that it will require a range of measures to utilize the private sector’s untapped potential to expand the pipeline of bankable projects in developing countries. Calling upon the international community to support private sector investment with specific action, he said the upcoming investment fair based on the Sustainable Development Goals will allow Governments to present specific projects and concrete opportunities to the investor community. He suggested that the fair could be turned into a standing forum, serving as an umbrella under which to bring together similar platforms to promote a comprehensive approach to similar types of investing.

Introduction of Report

LIU ZHENMIN, Under-Secretary-General for Economic and Social Affairs and Chair of the Inter-Agency Task Force on Financing for Development, presented the findings of that body’s 2021 report (document E/FFDF/2021/2). The report — the second published amidst the COVID-19 pandemic — represents an urgent call for an international response to a historic crisis with a bold package of actions, he said. However, while historic fiscal support measures amounting to $16 trillion have been vital in addressing the immediate health crisis and preventing an even deeper economic downturn, they have also been highly uneven, with developed countries accounting for more than 80 per cent of the global fiscal stimulus. In contrast, developing countries are responding to the crisis under tight fiscal constraints which, in turn, limit their ability to protect their citizens and invest in recovery.

That inequity — linked to the lack of fiscal space and liquidity constraints — could exacerbate the medium- and long-term development prospects of many countries, putting the Sustainable Development Goals out of reach, he warned. Calling for immediate action to support the crisis response of developing countries, he emphasized the need to “rebuild better” in a more sustainable and risk-informed way. To wit, he continued, the international community should consider ultra-long-term fixed-rate financing to allow all countries to take advantage of low global interest rates. It should also make use of debt swaps and buy-backs to free fiscal space for investment in the Sustainable Development Goals. He went on to stress the importance of reforming the tax, trade and debt systems, and aligning them with the 2030 Agenda.

Panel I

The Forum then opened its first interactive discussion, on the theme “Accelerating infrastructure investments for a sustainable and resilient recovery and restoring trade”. Moderated by Amar Bhattacharya, Senior Fellow at the Center for Sustainable Development at the Brookings Institution, it featured: Ken Ofori‑Atta, Minister for Finance of Ghana; Muhammetgeldi Serdarov, Minister for Finance and Economy of Turkmenistan; Jehanzeb Khan, Vice‑Minister and Deputy Chairman for the Planning Commission of Pakistan; Marcia Bernicat, Senior Official for Economic Growth, Energy and the Environment and Acting Assistant Secretary to the Bureau of Oceans and International Environmental and Scientific Affairs of the United States; Leila Fourie, Chief Executive Officer of the Johannesburg Stock Exchange and Co-Chair of the Global Investors for Sustainable Development Alliance; and Stephanie von Friedeburg, Senior Vice‑President, Operations, at the International Finance Corporation, World Bank Group. The lead discussant was Maria José Romero, Policy and Advocacy Manager for Private Finance of the European Network on Debt and Development.

Mr. BHATTACHARYA, opening the discussion, agreed with the points laid out in the President’s opening remarks. Investment in infrastructure will allow the world to meet its climate objectives, he said, while pointing out the international community’s inability to meet the necessary scale and quality of investment, in part because it has not yet been able to successfully mobilize private financing to that end. Investment in sustainable infrastructure will help to end the current crisis and achieve the transformation necessary for future success, he added.

Mr. OFORI-ATTA, delivering a video message, underscored the importance of robust, reliable infrastructure, pointing out that, according to the International Monetary Fund (IMF), Africa faces a $1.2 trillion financing gap over the next three years as COVID-19 pushes an additional 40 million of the continent’s people into extreme poverty. He urged the use of development banks as catalysts to fill the gap and provide the opportunity for all countries to meet the goals of the 2030 Agenda. Ghana’s investment in infrastructure covers sustainable mass transportation and watershed management, he said. Pointing out that African economies are losing 3.5 per cent of their annual gross domestic product (GDP) to the adverse effects of climate change, he warned that number will only increase and urged all States to implement climate-sensitive strategies in their COVID‑19 recovery plans.

Mr. SERDAROV, also delivering a video message, said Turkmenistan is following the principle of leaving no one behind, with the Government implementing measures to improve the economy and develop market relationships with medium-sized and large countries in various sectors. Emphasizing the importance of ensuring liquidity for national enterprises and providing stability in financial markets, he said the Government is also working to establish priorities for encouraging investment through various ministries. He went on to detail Turkmenistan’s desire to work with WTO to help increase the availability of capital in the country.

Mr. KHAN, agreeing with the President’s opening remarks, cited World Bank estimates that investments of more than $1 trillion will be needed for developing countries to achieve the Sustainable Development Goals, while investments of $100 trillion to $120 trillion will be required to meet carbon-emissions targets. He said COVID-19 has forced policymakers in developing countries to make difficult policy choices, balancing the need for stabilization imperatives and stimulus measures, and allowing economic activity to function despite the health challenges posed by the novel coronavirus. To help ameliorate the situation, the Debt Service Suspension Initiative should help to create fiscal space for developing countries, including Pakistan, to support their populations in the current difficult environment, he said. Pakistan calls upon the international community to work towards reducing illicit financial flows, redirecting the money saved to finance development and infrastructure, he added.

Ms. FOURIE, noting the enormous strain that the pandemic has placed on Governments, said the world economy contracted by 4.3 per cent overall, with emerging markets — excluding China — shrinking by 5 per cent and her own South Africa by 7 per cent. That has compromised the ability of Governments to respond to a growing infrastructure backlog, she said, pointing out, however, that many countries — including the United States — are now utilizing infrastructure spending to bolster post-pandemic recovery efforts. According to the World Bank, every 1 per cent increase in infrastructure spending raises GDP by the same amount, she added. Emphasizing the importance of investing more in infrastructure for advancing the Sustainable Development Goals, she said public-private partnerships are essential in that regard. She urged the public sector to support private sector investment through such measures as ensuring policy certainty in the mining and energy sectors, among others.

Ms. FRIEDEBURG noted that financing for infrastructure projects in developing countries fell by 44 per cent in 2020, with every sector except water and digital experiencing a decline. The response should include bankable projects that attract long-term institutional investors in order to build on existing financial platforms to accelerate projects and to embrace new technology like battery storage and smart grids, she said. Emphasizing the importance of de‑risking tools like blended finance in the poorest and most fragile countries, she also called for the involvement of multilateral development banks in the recovery process, since the development of bankable projects and financing development is the core function of such institutions.

Ms. ROMERO detailed civil society’s concerns about investment in infrastructure, emphasizing that public investment will continue to dominate infrastructure spending in many areas, especially in those sectors where public interventions are critical for reasons of social equity or where social returns exceed private ones. She cautioned that, while it can be advantageous to involve the private sector in the pursuit of the Sustainable Development Goals, mobilizing private capital should not be seen as a goal in itself because the type of financing prioritized can impact the types of projects chosen. For example, strong private finance could lead to a focus on building transportation networks for goods that perpetuate colonial divisions of labour and are primarily sensitive to profit concerns, she explained. A development agenda focused on incentivizing private investment might, in practice, undermine public‑policy objectives as States seek to protect investors from risks rather than protecting the human rights of their own citizenry, she warned, calling instead for careful consideration of how private finance can play a positive role in the post-pandemic recovery.

Ms. BERNICAT said private sector investment in infrastructure plummeted by 56 per cent in 2020, according to World Bank data, but emphasized nonetheless that investment is critical if countries are to build back better and greener. “We must make the right investments,” she said, with countries meeting internationally accepted standards and improving local resilience against climate change and natural disasters. The International Development Financing Corporation mobilizes private capital to support inclusive economic growth, with a focus on emerging markets, she explained, adding that it incorporates International Finance Corporation standards on environmental and social protection. In addition, she continued, the Blue Dot Network — launched in 2019 by the United States, Japan and Australia — promotes quality investment in infrastructure by certifying projects that are environmentally responsible, open and inclusive. She went on to stress the importance of a conducive environment in attracting investment, including fair and predictable legal and regulatory frameworks. For Governments, it will be important to create legal frameworks that reduce risks for investors; structure public-private partnerships to ensure that projects offer a return on investment throughout their life cycle while attracting reputable investors; and manage debt wisely. Pointing in particular to the Organisation for Economic Co-operation and Development (OECD) Policy Framework for Investment, which provides guidance on creating a competitive investment climate, she urged all stakeholders to support multilateral investment banks, which have wide experience in development finance and adhere to the highest standards.

In the ensuing dialogue, the representative of Guatemala, speaking on behalf of the Like-Minded Group of Countries Supporters of Middle-Income Countries, detailing the many sectors improved by infrastructure investment, including employment, food systems, supply chains and availability of essential services. However, middle-income countries lack affordable access to information and communications technology (ICT), which are essential to overcoming the pandemic, he noted, calling for increased cooperation and technology transfer to that end. He went on to emphasize that South-South and triangular cooperation should be seen as a complement to, not a substitute for, North-South cooperation.

The representative of Bangladesh pointed out that lack of infrastructure, especially in the health, education and supply-chain sectors, was acutely felt during the pandemic, and that the crisis also revealed the importance of digital infrastructure. Calling for urgent, significant investment in infrastructure, she emphasized the importance of grants and long-term concessional financing to that end. The international community should explore the untapped opportunity of public-private and blended financing to meet those goals, she urged.

The representative of Sudan said that international trade promotes inclusive global economic development, contributes to ending poverty and facilitates sustainable development. The Transitional Government views it as the main driver for sustainable development in Sudan, he added. Emphasizing the need for a multilateral system of trade based on openness, transparency, predictability, inclusiveness and equality, within the framework of WTO, he called upon the international community to help developing countries overcome the challenges preventing them from joining that agency.

The representative of Indonesia pointed out that her country halted many infrastructure projects as the national budget was reallocated to support health, social protection and economic recovery efforts. There is now a need to accelerate investment in infrastructure in order to promote sustainable, resilient recovery, she said. Strengthening public-private partnerships is essential to bridging the infrastructure financing gap, she added, emphasizing that blended finance must become a mainstream part of the international financing paradigm.

The representative of Nigeria said that, as the COVID-19 crisis wanes, the international community must improve stimulus measures and public policy actions to increase trade, facilitate long-term investment in sustainable development and ensure recovery for all countries. He called upon all relevant stakeholders to help developing countries build e-commerce capacity, to strengthen investment in the 2030 Agenda and to increase cooperation in addressing rising inequalities around the world.

Several speakers representing civil society organizations then addressed the session.

A speaker representing the Civil Society Financing for Development Group highlighted the need to “ask the right questions” when considering infrastructure investment and focus on the quality, rather than quantity, of infrastructure. He cautioned that the development impact of blended financing is largely unknown and focuses on maximizing returns. Furthermore, realities on the ground show that such “business as usual” can lead to nominally “green” projects that lead to rights violations and land grabs, he said, citing a project in the Philippines that eroded mountains and destroyed the livelihoods of indigenous people to build a so-called “green city”. He went on to call for the rights-based democratization of investment decisions and broader development planning.

A speaker representing the NGO Committee on Financing for Development emphasized that no technology proved more valuable during the last 13 months than the Internet as people went online to receive crucial information and to work and learn remotely. Noting that barriers to Internet access in low- and middle-income countries leave nearly half the world’s population offline, she called for increased investment in digital infrastructure, such as submarine communications cables, to build a more resilient global economy.

A speaker representing the Convention of Independent Financial Advisors said the lack of financial inclusion perpetuates the wealth gap among nations and individuals. While the private sector can play a significant role in infrastructure investment, the roadblocks are numerous, he emphasized, noting that lack of confidence in the public sector’s ability to protect investor rights prevents otherwise willing investors from becoming involved. Achieving financial inclusion requires coordinated efforts by the private, public and social sectors, he said, adding that resolving issues requires both financial resources and “a change of heart”. He declared: “If you have the heart resources, you will find the financial resources.”

Special High-Level Meeting

The Forum then held an interactive dialogue with the Executive Directors of the World Bank and International Monetary Fund. Moderated by Masood Ahmed, President of the Center for Global Development, the panel featured presentations by: Mia Amor Mottley, Prime Minister of Barbados and Chair of the Development Committee; Magdalena Andersson, Minister for Finance of Sweden and Chair of the International Monetary and Finance Committee; and Federico Villegas, President, Trade and Development Board, United Nations Conference on Trade and Development (UNCTAD).

Serving as lead discussants were Merza Hussain Hasan, Dean, Board of Executive Directors, World Bank Group; Ita Mannathoko, Chair, International Monetary Fund Liaison Committee with the World Bank, the United Nations and other International Organizations; Koen Davidse, Executive Director, EDS19, World Bank Group; and Satyendra Prasad, Permanent Representative of Fiji to the United Nations

Ms. MOTTLEY reported on the meeting of the Development Committee on 9 April, in which the President of the World Bank Group and the Managing Director of the International Monetary Fund participated. Discussion focused on broadening the international response to COVID-19 to include issues of vulnerability, climate resilience and inclusive development, she said, adding that rising poverty was a key area of focus, with Committee members underscoring that COVID-19 has caused an unprecedented economic and social crisis, with some developing countries registering deep losses. There were calls for sustained financial and technical support for an adequate policy response, with further support to the private sector, she reported. Committee members urged IMF and the World Bank to jointly tackle COVID-19’s impact, and the Bank, in particular, to continue its focus on boosting shared prosperity. Committee members also stressed that the timely delivery of safe and effective vaccines is critical to ending the pandemic, notably as new variants emerge, she said, adding that they also called for greater transparency in the contracts between private manufacturers and Member States. They also requested that the Bank help countries prepare for future pandemics, with support for stronger health systems and universal coverage. They supported a final extension of the Debt Service Suspension Initiative through 2021, which was also agreed by the Paris Club, and for multilateral development banks to consider their participation in that endeavour, she said. With fragility, conflict and violence having worsened in many regions, Committee members also stressed the importance of addressing the drivers of forced displacement and migration, as well as related issues.

Ms. ANDERSSON, recounting discussions during the IMF spring meetings last week, said global growth is recovering faster than expected, thanks in part to the rapid enactment of fiscal and monetary policies. However, the health and economic crises are ongoing and uncertainty remains high, which may exacerbate poverty, she cautioned. Countries must therefore ensure that recovery is not only robust, but inclusive and green. Participants agreed that strong international cooperation is instrumental to accelerating vaccine production and distribution, she said, declaring: “I can find no better way to spend tax money right now than to ensure rapid global vaccination.” She cautioned, however, against withdrawing macroeconomic policy support too early. In addition, the International Monetary and Finance Committee endorsed an ambitious set of actions to support poor countries, including a general allocation of $650 billion in special drawing rights, she reported. “This is truly an historic achievement,” she said, adding that there was also support for extending the Debt Service Suspension Initiative. Members also committed to tackling the impact of climate change, she noted.

Mr. VILLEGAS noted that, whereas the global economy is expected to grow faster in 2021, it will be $4.7 trillion smaller than it could have been. UNCTAD‑15, in October, will offer an opportunity to embrace cooperation in forging a path forward, he said, while pointing out that the transformative aspirations of the Monterrey Consensus have not received as much attention as other aspects of financing for development. With major changes under way in how people work and produce, “we are at an inflection point in history”, he said, emphasizing the urgent need to find durable solutions to debt issues after the pandemic. He called for the creation of a single sovereign debt authority to address the manifold flaws of sovereign debt restructuring.

Urging “expansive” use of special drawing rights, he described the $650 billion general allocation as a “step in the right direction”. He called for the allocation of new special drawing rights to countries in need of liquidity, pointing out that the lion’s share goes to advanced economies that need it least, while the needs of developing countries remain unmet. Furthermore, debt suspension should be extended on the basis of need, independent of income level, he proposed, adding that a publicly controlled credit rating agency should also be considered. He said additional finance can be secured by establishing a financial transaction tax. While blended finance is seen by many as “the way to go”, the small amounts involved, strong concentration on revenue-generating sectors and lack of transparency are all concerns, he cautioned. Reigniting global trade — through a universal, free, open, inclusive, non-discriminatory, predictable, fair and equitable trade system — is another part of the solution, he stressed, declaring: “It is crucial that we advance together.”

An interactive dialogue with Bretton Woods experts ensued.

Mr. HASAN, lead discussant, cited the emergence of vaccine-resistant variants of the coronavirus as one of the significant risks facing the global economy. Distribution of vaccines must be accelerated, he emphasized. He pointed to the OECD report “Strengthening the Economy: The Need for Speed”, which indicates that the world is leaving small countries alone and that the pace of recovery is both diverging — and positively correlated to the pace of vaccine rollouts. To address the global crisis, the Bank is pushing resources towards social safety nets, he said, adding: “We need to move countries from crisis mode to green, inclusive recovery,” with a focus on fragile, conflict-affected and small States, and front-loaded resources. He went on to recommend final debt service suspension through 2021.

Ms. MANNATHOKO, lead discussant, noted that the world is facing a multi‑speed recovery, characterized by serious divergences. Many low-income countries face larger scarring, with divergence seen within several economies, particularly for low-skilled and female workers. World Bank estimates show that 120 million more people could fall into extreme poverty, she said, emphasizing that “we must ensure this does not happen”. Developing countries need treatments, therapies, tests, continued debt relief and concessional financing, she added. Urging Governments to avoid protectionist trade measures and address gaps in infrastructure investment, she said strategies will need to leverage private sector finance and take advantage of public-private partnerships. She pressed international finance institutions to step up their financing, policy advice and technical assistance to developing countries, and to foster collective action to meet climate change mitigation commitments.

Mr. DAVIDSE said the World Bank’s lending and grant-making reached record levels in 2020, starting with the replenishment of the International Development Association. Agreeing that “access to vaccines is key to economic recovery”, he said the Bank is providing support to health systems and some 50 countries for the purchase of vaccines. He called for more centralized production, something the International Finance Corporation — a sister organization of the World Bank and member of the World Bank Group — is also advocating. Noting that country, climate and development reports provide a good platform for helping countries meet their commitments, he said that, to ensure an inclusive recovery, it will be crucial to focus on human capital, social protections and job creation, with a particularly priority on young people. He also advocated a laser focus on Sustainable Development Goal 5 on gender equality.

Mr. PRASAD, estimating recovery time frames, noted that “you do not have to be a rocket scientist to think some countries face 5- [to] 10-year perspectives”. The questions revolve around how to support them, he said. Vaccine distribution likely requires more discussion between the World Bank, IMF and the United Nations, as not all the pieces are fully in play, he added, emphasizing that markets will respond sharply if they believe vaccination plans are credible and look capable of being implemented. He went on to call for attention to the compounded nature of a “K‑shaped” recovery if countries and regions fall further behind.

The representative of China, calling for strengthened international coordination, expressed support for efforts to resolve questions around taxation of the digital economy by mid-2021. China also supports equitable burden-sharing in helping vulnerable groups, debt suspension through 2021, the $650 billion special drawing rights allocation, collective efforts on climate change issues, and restoring the role of trade to foster economic recovery, he said.

In the discussion on liquidity and debt, Armando Manuel, Executive Director for Angola, Nigeria and South Africa of the World Bank Group, and Louise Levonian, Executive Director for Canada of the International Monetary Fund, served as lead discussants.

Mr. MANUEL said 54 per cent of International Development Assistance countries were classified as either in or at high risk of debt distress, a problem that is extending to middle-income countries. Urging policymakers to focus on short-, medium- and long-term policy interventions, he said the World Bank is providing liquidity to help countries fight COVID-19 and supporting a range of small and medium-sized enterprises, some of which are dealing with underperforming loans. He noted that the $5.7 billion in debt service suspension achieved through the Debt Service Suspension Initiative benefitted 46 eligible countries — mainly those within the low- and middle-income category — and cited the G20 Common Framework as another commendable measure. “But, again, this is a temporary measure,” he clarified. Long-term solutions will require a focus on reducing debt vulnerability and greater reliance on technical assistance, he said, underlining that reduction of debt vulnerability is the responsibility of national authorities. “We need to focus on economic growth,” notably through public expenditure efficiency and improved governance over procurement, he added.

Ms. LEVONIAN agreed that the pandemic has caused an unprecedented rise in public debt, with most low-income countries already distressed and facing a potential second wave characterized by defaults, capital flight and austerity. Turning to the architecture for restructuring sovereign debt, she noted that, while the Debt Service Suspension Initiative offered a lifeline, it did not mobilize public creditors as hoped. The Common Framework represents a more tailored solution and efforts to make it operational should be the immediate priority, she emphasized. As for what more can be done, she called for the full participation of bilateral creditors, and over the medium-term, extension of the architecture to other countries in debt distress, with other efforts focusing on the contractual approach to debt restructuring. Majority restructuring provisions could be considered in loan agreements, she suggested, with clauses to reduce debt repayments in the event of natural disasters. She went on to say that collective efforts must be made to ensure greater public debt transparency, stressing that “without a complete picture of what a country owes, debtors and creditors cannot make good decisions”. G20 Operational Guidelines for Sustainable Financing, meanwhile, can prevent the build-up of hidden debt, she said, adding that, for private sector creditors, the proposal to create a voluntary debt disclosure depository is welcome.

The representative of Morocco welcomed the timely measures taken by the World Bank Development Committee to address the debt crisis, saying the extension of the Debt Service Suspension Initiative through 2021 also has allowed highly indebted countries to conserve liquidity. However, further debt relief and suspension are needed beyond 2021, including for low- and middle-income countries, he added.

The representative of Bangladesh welcomed the World Bank’s support for the COVAX Facility, adding that development partners are expected to facilitate technology transfer for the local manufacture of vaccines in developing countries. Calling for expansion of the Debt Service Suspension Initiative to include private creditors, he expressed concern that the funds available for vulnerable countries through the $650 billion in special drawing rights is inadequate. Bangladesh therefore calls for the reallocation of unused rights, he said.

The representative of the United States welcomed the action-oriented suggestions made by the discussants, while expressing serious concern over the potential for a permanent divergence in the global economy. The World Bank and IMF should continue to support national finance efforts with a focus on both transparency and sustainability, she said.

A speaker representing the FFD CSO Group called for a $3 trillion allocation of special drawing rights, explaining that the recent IMF proposal was limited to $650 billion only because that is the amount that the United States can appropriate without Congressional approval. She emphasized: “This is the only way developing countries will be able to lead their own way out of the crises imposed on them by COVID-19.” She went on to press WTO to urgently facilitate agreement on the suspension of so-called intellectual property rules that allow companies to maintain control over life-saving treatments that should be in the hands of States. “There is no issue of more moral imperative,” she stressed.