A year into COVID-19 – how do we invest to recover better?
What have we learned from the ravages of COVID-19, with a global economic standstill and millions of people left reeling in its wake? How do we repair broken systems that failed to prevent this crisis? The upcoming Financing for Development Forum will explore how to invest to recover better.
The latest Financing for Sustainable Development Report (FSDR), released by 60 international agencies on 25 March, also attempts to answer some of these questions and advise the international community on how to scale up financing to achieve the Sustainable Development Goals (SDGs).
The key takeaway is that the pandemic could result in a lost decade for development, unless we invest in a recovery that is inclusive of developing countries and vulnerable groups. Due to the crisis, about 120 million more people were thrown into extreme poverty; over 114 million jobs were wiped out—disproportionately among women and youth; and over 2.5 million people lost their lives. Many of the SDGs are seriously threatened, while two-thirds of COVID vaccines are going to a few wealthy countries with many of the rest trailing years behind.
It is going to take a lot of money to bring us back on track, especially in developing countries. But the good news is that the resources can be found, and it will make a difference if invested in our sustainable future. The FSDR recommends:
- 50-year loans at low interest rates to struggling countries.
- International support for nations at risk of debt distress.
- Rich countries meet their 0.7% Official Development Assistance (ODA) commitment.
- Capital markets investing the money where it is needed the most.
- Removing fossil fuel subsidies while applying carbon pricing.
- Eliminating illicit financial flows, which deprive governments of billions of dollars every year.
- Better taxation models, especially of the digital economy, to prevent tax avoidance.
The post-COVID recovery will not be easy but rebuilding better is not only possible by scaling up financing of the SDGs, it is vital. The upcoming Financing for Development Forum (12-15 April) and the SDG Investment Fair (13-14 April) will explore where and how to invest in a better future for all.