More from UN DESA Vol 25, No. 03 - March 2021

Farmer in Southern village of Addousieh in Lebanon

Global Policy Dialogue: Improving access to safe food and water

Today, about 1 in 3 people live without safe drinking water, and almost 1 billion people suffer from hunger. What’s more, ensuring food and water security for all by 2030 is severely affected by environmental shocks, that are all intensified by climate change.

This month, UN DESA is bringing together leading experts to offer new ways to mitigate climate change-related challenges to delivering nutritious food and clean water in a free, public online event on “Food and Water Security in an Era of Shocks” on 24 March.

The event will complement other events this month commemorating World Water Day on 22 March. The President of the UN General Assembly will host a High-level Meeting on Water on 18 March to accelerate measures to meet the water-related global goals, and FAO will host the UN’s celebration of the day on 22 March. This year’s theme is “valuing water,” a reminder for us all to consider all the different ways water benefits our lives, and to take action to safeguard it.

The event on food and water will be the first of four sessions in a new series, “Building a Global Coalition for Sustainability after COVID-19: UN DESA Global Policy Dialogues for Climate Action.” Future events this spring will focus on: Energy and transport (April), forests and the ocean (May), and climate financing and digital solutions (June).

The Global Policy Dialogue on “Food and Water Security in an Era of Shocks” will be held from 8:30 to 10 a.m. EST on 24 March. It will be broadcast live on UN DESA’s Facebook page. Stay up-to-date on upcoming events by browsing this page.

Private savings are largely funding mounting public debt

To fight the COVID-19 economic crisis, developed and developing countries have implemented the most extensive economic stimulus packages in history. Public debt soared to record levels in many countries. In parallel, central banks shifted to highly accommodative policy stances with historically low interest rates and accelerated asset purchases.

While there are compelling arguments for rolling out further fiscal stimulus to minimize the economic impact of the pandemic and accelerate recovery, soaring public debt levels present serious concerns.

The financial sectors, including the central banks in the euro area, Japan and the United States, purchased most of the new public debt during the past year. While these purchases expanded the asset side of the balance sheets of the financial sector, the liabilities side grew with increased deposits mostly from non-financial business and household sectors. The changes in the liabilities side of the balance sheets suggest that households and private sectors indirectly financed the new public debt issues.

The savings rate of households and businesses jumped temporarily during the pandemic amid limited spending and investment opportunities, strong liquidity preferences and high-risk aversion during the crisis. The sharp increases in deposits sustained the price of public debt in 2020.

However, the demand for public debt may quickly wane should consumer confidence improve, non-financial private sector’s liquidity preference reverse and spending and investment return to their long-term trends. It results in declining prices of public debt securities and their rising yields. The yields of long-term public debt securities have already been on the rise, particularly in the United States.

Since there is a strong global consensus for further fiscal measures, the international community must support Governments to implement policy. To this end, the current situation calls for more international coordination to manage public debt securities and their prices in financial markets. Such coordination can prevent potential financial turbulence due to abrupt drops in the prices of public debt, supporting Governments to implement additional fiscal measures to cope with the ongoing pandemic crisis and its socioeconomic impacts.

Read more in the March Monthly Briefing on the World Economic Situation and Prospects.

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