Financing for the Development in the Era of COVID-19 and Beyond Initiative (FFDI)
The COVID-19 pandemic and the social and economic crisis it triggered has not only caused immeasurable suffering in the past ten months but could also derail global efforts to achieve the 2030 Agenda for Sustainable Development. In some parts of the world, the pandemic is fast turning into a humanitarian crisis, threatening to push millions into a state of acute food deprivation and endangering the lives of millions of women, men and children.
In 2020, world gross product fell by an estimated 4.3 percent – the sharpest contraction of global output since the Great Depression. The pandemic is expected to drive between 119 and 124 million people into extreme poverty this year, with the total rising to as many as 150 million by 2021, the first such increase since 1998. With progress on SDG 2 (zero hunger) already backsliding before the onset of COVID-19, an estimated additional 270 million people could face acute food shortages by the end of 2020. Meanwhile, the equivalent of 255 million full-time jobs worldwide were lost in 2020 relative to the last quarter of 2019. This has served to reinforce and further widen economic inequalities, disproportionately impacting developing countries and vulnerable groups.
While many developed countries have been able to finance robust counter-cyclical fiscal responses to the crisis, developing countries, who face higher interest rates and service fees, are either struggling to service their debts or are directing finance that could be used to support health and social sectors towards paying back debts. A total of $16 trillion in fiscal stimulus response that has been disbursed as of March 2021, with high-income countries mobilizing an equivalent of over 16 percent of their GDP, compared to 4 percent for emerging economies and a mere 1.6% for low-income developing countries. The policy response of developing countries has been severely limited due to financial constraints, including the need to continue servicing foreign currency-denominated debts amid sharply diminished inflows of foreign exchange.
On 28 May 2020, the Prime Ministers of Canada and Jamaica and the Secretary-General launched the Initiative on Financing for Development in the Era of COVID-19 and Beyond (FfDI) to identify and promote concrete financing solutions to the COVID-19 health and development emergency. In follow up to a High-Level Event on 28 May 2020, six discussion groups were convened to address questions of external finance and remittances, jobs and inclusive growth; recovering better for sustainability; global liquidity and financial stability; debt vulnerability; private sector creditors engagement; and illicit financial flows.
The result was a single, ambitious menu of options addressing policies for the short, medium and long term that reflected the variety of needs and views of various stakeholders including Member States. The menu of policy options was further distilled to reflect the views expressed by Ministers of Finance from all continents during a High-Level Meeting on 8 September 2020, before being presented to Heads of State and Government at a High-Level Meeting on 29 September. The FfDI track was further supported by a series of Roundtables entitled, Rebirthing the Global Economy to Deliver Sustainable Development for all and a High-Level Meeting with Civil Society.
Following on from these High-Level Events, a roadmap has been created to continue the work on the FfDI track and ensure implementation of some of the most pressing policies from the menu of options. Six clusters were established, focusing on: sustainability and climate action (under the leadership of UNDP); socio-economic response: social protection, gender, youth, health, education, and human rights (ILO); finance and technology (UNTAD); liquidity and debt vulnerability (DESA); illicit financial flows (Regional Economic Commissions); and addressing special country needs (DESA).
The six clusters also resulted in a series of high-level events on (i) the international debt architecture and liquidity (29 March); (ii) extractive industries (25 May); finance and technology for a green and purple recovery; and illicit financial flows. Each high-level event is preceded by preparatory meetings to further unpack specific topics, as well as a policy brief from the Secretary-General; laying out the main issues.
As we continue to face a long road ahead to recovery and to global herd immunity – especially in light of the prevalence of vaccine nationalism currently unfolding – the United Nations stands ready to continue supporting the most vulnerable, and to advocate for relief from the devastating socio-economic impacts of this crisis.
- Secretary-General’s Policy Brief: “Liquidity and Debt Solutions to Invest in the SDGs: The Time to Act is Now” ( | | | | | | )
28 May 2020, New York
1 July 2020
Rebirthing the Global Economy to Deliver Sustainable Development
2 November 2020
Civil Society Meeting
Each Discussion Group was co-led by Member States and supported by the United Nations. Membership included Member States, represented by Ministries of Finance, as well as more than 50 institutional partners – international financial institutions, international organizations, private sector and civil society representatives, think tanks and academic institutions.
The Groups received further logistical, technical and substantive support from 20 specialized UN entities, funds and programmes, and received regular input from United Nations Country Teams. Group co-leads met on several occasions to enhance coordination and coherence across the outcomes of different Groups. Over 50 of the world’s top experts in their fields were also invited to infuse scientific accuracy and cutting-edge research into the outcomes.