Today’s meeting is aimed at preventing a debt crisis that will have the greatest impact on the poorest people, in the most vulnerable countries.
But the impact will not stop there.
It cannot be confined to any region or category of country. There have been credible forecasts of losses of global output in the trillions of dollars.
The United Nations has been warning of this crisis since the start of the COVID-19 pandemic a year ago.
Unfortunately, not enough has been done to support those countries – many dozens of countries – that are at highest risk.
We are already in the worst global recession in 90 years.
We cannot walk head on, eyes wide open, into a debt crisis that is foreseeable and preventable.
Many developing countries face financing constraints that mean they cannot invest in recovery and resilience.
Nor can they access the vaccines that provide the fastest route out of the pandemic.
A global vaccination gap threatens everyone, in developing and advanced economies alike.
Developing countries urgently need access to additional liquidity, to respond to the pandemic, and to invest in a sustainable and inclusive recovery.
Today, we are united in calling for urgent, bold and decisive action.
I commend the strong leadership of the Prime Ministers of Canada and Jamaica, who have been vital partners in this process.
The old rules simply do not apply.
We need to change the rules, putting people and livelihoods at the centre of our decisions.
I am encouraged by the growing consensus around the need for increased liquidity through the issuing of Special Drawing Rights by the International Monetary Fund – one year after we first called for this.
I renew my call for the voluntary reallocation of unutilized SDRs to support vulnerable developing countries, including middle income ones.
We also need to see far bolder steps on the three-phase approach to debt that we have advocated from the start:
- First, a moratorium on debt payments;
- Second, targeted debt relief;
- Third, reforms to the international debt architecture.
Fresh financing by International Financial Institutions, the G20’s Debt Service Suspension Initiative, and the Common Framework for Debt Treatments are welcome steps.
But we must go further, and faster.
The DSSI must be extended into 2022, and made available to all highly indebted countries, including also vulnerable middle-income countries that might request it.
The Common Framework must be complemented with initiatives and instruments, so that participating countries are not penalized with downgrades to their credit ratings.
Additional, targeted debt relief will be needed. Options include debt swaps, buy-backs and cancellations.
And the private sector must be brought into the dialogue.
In the long-term, we need an international debt architecture that works for all, with agreed principles, and restructurings that are timely and adequate.
Ladies and gentlemen of the press,
In a global pandemic, we cannot separate economics and health.
We are in danger of emerging from COVID-19 with a two-speed world. That is already starting with the unequal distribution of vaccines.
If half of the world cannot access vaccines, there is a danger of successive waves of COVID-19 over the next few years. This could undermine the effectiveness of existing vaccines, with a continued devastating impact on lives, livelihoods – and the global economy.
If we heed the lessons of the pandemic, we will invest in safety and resilience; in strong global health systems; and in a robust financial architecture, [fit] for the 21st century.
Together, we can emerge from this year of terrible loss with new momentum, and build a sustainable and inclusive recovery for all.
PM Justin Trudeau:
Hello, everyone. Bonjour à tous.
Comme le Secrétaire général Guterres et le Premier ministre Holness l’ont dit, nous tenons aujourd'hui une autre réunion conjointe sur le financement du développement.
Je tiens à remercier le Secrétaire général du soutien qu’il a offert pour ces réunions et le Premier ministre pour son partenariat dans le cadre de cette initiative depuis le mois de mai dernier.
In the last year our world has faced a pandemic, a global economic crisis, and the continued crisis of climate change.
It goes without saying that these are very serious challenges on a very significant scale.
Take the global economic front alone.
Several countries have already defaulted, a significant number of emerging economies face serious fiscal challenges, and many developing countries are in debt distress.
This comes on top of the economic effects of ongoing emergencies like climate change, which have only been made worse by the pandemic.
As a world, we cannot afford to turn away. Instead we must learn from this crisis and together set ourselves on a better path.
L’année passée le Canada a tenu des réunions de haut niveau avec le Premier ministre Holness et le Secrétaire général Guterres pour définir notre réponse mondiale.
Aujourd'hui on continue cet effort.
Notre réunion porte sur quatre grands thèmes : améliorer les liquidités mondiales, prolonger l’allègement de la dette et en élargir la portée, réaliser de plus vastes réformes à l’égard de l’allègement de la dette, et se pencher sur l’admissibilité à l’aide internationale.
Nos conversations aujourd'hui orienteront aussi les importantes discussions qu’on aura prochainement aux réunions du printemps du FMI et de la Banque mondiale et au sein du G20 et du G7.
Truly building back better from this pandemic means creating good jobs and growing clean, resilient economies.
It means ensuring that the legacy of this crisis isn’t one of rolling back progress for anyone.
In fact, on that front, earlier this month Canada launched a new Task Force on Women in the Economy to ensure that no one gets left behind, because a better future is one where everyone has the chance to succeed.
Le Canada veut trouver de vraies solutions qui vont aider tout le monde, y compris les plus vulnérables de ce monde, à se remettre de la crise.
Ensemble, dans des réunions comme celles-ci, on peut continuer de bâtir un avenir plus prospère pour tous.
PM Andrew Holness:
Ladies and gentlemen of the press.
I am encouraged by the continued active participation in this important initiative on Financing for Development in the era of COVID-19, and beyond.
Countries are, indeed, fighting on all fronts to meet the multi-dimensional health, social, and economic crises, created by the pandemic.
At the forefront of the challenges, we face are those related to debt sustainability and the need for increased liquidity.
The elevated debt risk that confronts developing countries, particularly those that were already grappling with high debt burdens require urgent action by the international community.
We therefore welcome the efforts made by the G20 to establish the debt service suspension initiative the DSSI, which has been extended through June 2021.
However, we urge that it be further extended to at least the end of this year, and ideally, to the end of 2022.
While recognizing that many low-income countries are at high risk of debt distress, there are several middle-income countries that are also at risk, whether they too will fall into distress, depends on the depth and duration of the impact of the pandemic.
Small island developing states, which are heavily reliant on tourism and remittances are particularly vulnerable.
We therefore call for an expansion of the DSSI, to include vulnerable middle-income countries that request that forbearance.
Private creditors, play a much more prominent role today in relation to sovereign debt issued by developing countries.
We must therefore, engage them, and the credit rating agencies within the context of our deliberations on debt sustainability if we are to get more countries to participate.
There are significant signs of progress on the liquidity front, and I'm pleased to note the support being shown to our call for the IMF to issue a new allocation of SDRs, as was done in the 2009 global financial crisis.
At the systemic level, we continue to see the need for the establishment of a sovereign debt resolution mechanism.
This will provide a framework within which sovereign debtors and the various creditors can collectively negotiate restructuring agreements in an orderly fashion, subject to agreed rules and procedures, such a mechanism should include features that effectively address the long-standing problem of holdout creditors.
Lastly, I emphasize the important role that can be played by innovative financial instruments such as debt buybacks and debt swaps, state contingent debt instruments and specialized liquidity funds such as those proposed by Costa Rica. and ECLAC.
With that said, I look forward to your questions.
**Questions and Answers
Spokesperson: Okay. We will now turn to questions. A reminder to please try to stay on topic.
And the first question will go to Edie Lederer from the Associated Press. Edie.
Question: Thank you very much, Mr. Secretary‑General, Prime Ministers Holness and Trudeau, for this briefing. On behalf of the United Nations Correspondents Association, welcome, and we are delighted that you're here.
I have a broad question for the three of you, which is, what is, what are the greatest obstacles to achieving the kind of debt relief that you are seeking right now? Is, and is there a realistic possibility that what you would like to see will happen?
And, for the Secretary‑General, I couldn't let this opportunity go without asking him one question about one of the real serious crises of the day, which is the escalation of killings in Myanmar. It appears that the military leaders in Myanmar are deaf to the many international calls to stop the violence and restore democracy, and they've told your Special Envoy [Christine Schraner Burgener] that increased sanctions wouldn't work - they don't care, they've lived with them before. So what, realistically, can the international community do to try and end the violence and restore democracy? Thank you.
Secretary-General: Thank you very much. I would start with this last point, and then we will go to the main question. I mean, what has happened in the national day of the armed forces was absolutely horrendous, and I had the occasion to vigorously condemn it and to say that it is absolutely unacceptable to see violence against people at such high levels, so many people killed, and such a stubborn refusal to accept the need to liberate all political prisoners and to make the country go back to a serious democratic transition.
The past system was not perfect, we know, but there's no comparison with the present situation.
I mean, we need more unity in international community. We need more commitment in the international community to put pressure in order to make sure that the situation is reversed. I'm very worried. I see, with a lot of concern, the fact that, apparently, many of these trends look irreversible, but hope is the last thing we can give up on.
If I may, starting, in relation to the first questions, well, power relations in the world are unequal, and what we have been asking relates to a very drastic change in power relations in the management of the global economy. And I believe that this initiative, led by the Prime Ministers of Jamaica and Canada, has been an initiative in the front, pushing for what needs to be done, but this group that met today is not the decision‑making group. We are saying what we believe needs to be done, and the truth is that it's starting to have an impact.
The SDRs were a taboo. Now the SDRs are on the table, and they will be moving forward. I mean, aspects of debt relief are still, I would say, being done, too little, too late. But the problems are more and more on the table, and we feel that, at the G7 and the G20 level, and in the boards of the international financial institutions ‑ the IMF, the World Bank ‑ our ideas are starting to germinate.
So, I believe our role is to go on telling the world what needs to be done and hoping that, progressively, those that have decision‑making capacity, and the presence of Canada in this group is very important, as Canada is simultaneously a member of the G7 and the G20, and the leadership of Prime Minister Trudeau has been fantastic in this regard. I believe that, sooner or later, things will be moving in the right direction. They're already moving in the right direction. We need to accelerate. We need to go deeper.
But, I have to say that, more and more, we feel that our role is extremely important, because we have been putting on the table all the serious problems, and I believe that those that are crucial in decision‑making processes are listening and are starting to move in the right direction.
Spokesperson: Okay. I will go to the, to Prime Minister Andrew Holness, if he wants to add anything, and then to Prime Minister Trudeau.
Prime Minister Holness: It depends where you’re looking from; your perspective as to what would be the most difficult task. But I think we can generally accept that solving this potential debt crisis as a side effect of the pandemic would really be determined by the level of ambition and commitment of the global community to cooperate and to act in an enlightened fashion to avoid the potential debt cri... well, not potential anymore, the emerging debt crisis. So from a developing country point of view, a middle-income country point of view where private commercial debt is playing a much greater role in our sovereign debt obligations, a major hurdle would be to find ways of incorporating the private sector in this global initiative.
Spokesperson: Thank you. Prime Minister Trudeau?
Prime Minister Trudeau: Thank you. I think it is human nature that in a time of crisis, people want to sort of hunker down and hope the storm blows over. We’re not well adapted to global crises. Decades of lack of sufficient action on climate change shows how difficult it is to coordinate and work together to do meaningful, significant shifts when a crisis seems so large and, in some cases, so far away. So there continues to be this instinct, even around this pandemic -- which is undoubtedly a global crisis, a global problem -- that people are hunkered down and trying to solve it locally without really understanding that, until we solve it globally, there won’t be a solving of it locally, not for real.
So, the meetings that we’ve had, the leadership that Antonio and Andrew have demonstrated in this initiative are all about setting the table and putting forward the right conversations so that we’re developing the necessary tools to ensure that we get through this, not just as a health crisis but as an economic crisis as well all together.
And as the conversations continue in the international financial institutions, in places like the G7, the G20 -- the G7 finance ministers just met a few weeks ago and had some strong forward movement towards this as well -- we are seeing things come together and we will be ready with solutions as the attention of the world says, “oh, we’ve really got to deal with this.” Well, that’s what we’ve been working on over the past year with a wide range of very strong voices.
Spokesperson: Thank you. We are now going to Catherine Levesque from the Canadian La Presse Canadienne. Please.
Question: Oui, bonjour, tout le monde. Catherine Lévesque, de la Presse canadienne. Mes questions sont posées à M. Trudeau. Tout d’abord là, je me permets de vous faire réagir sur la Chine. J’aimerais savoir si le temps, bon, on a vu en fait ces sanctions contre les parlementaires dans les derniers jours. On a vu vos efforts avec les alliés. Je me demande si le temps n’est pas venu de sortir l’artillerie lourde et d’imposer soit des sanctions économiques ou carrément d’interdire des fournisseurs comme par exemple de la région du Xinjiang qui on le sait font appel à des esclaves pour faire leurs produits. Donc j’aimerais vous entendre là-dessus.
Et si vous pouviez répéter en anglais également. Merci.
Prime Minister Trudeau: Évidemment nous prenons très au sérieux la situation de la défense des droits humains à travers le monde y compris particulièrement ces jours ci en Chine. Nous avions pris action, pas seulement seuls mais de concert avec nos alliés et je pense qu’on reconnaît tous que c’est cette... ce travail multilatéral rassemblant des pays divers qui reconnaissent ensemble les défis qui... auxquels on fait face, c’est la façon d’avancer. Donc on a pris des mesures de sanction, on a pris les mesures pour protéger et pour aider nos compagnies à ne pas se faire impliquer dans l’exploitation qui se passe à Xinjiang puis on va continuer de travailler en parallèle et en partenariat avec des alliés de partout dans le monde.
We have always been very, very strong in our defense of human rights and are highlighting our concerns for what’s going on in Xinjiang. We have acted. We have acted in a way that is giving extra support and ability for Canadian companies to ensure that they are not being involved in questionable supply chains from Xinjiang, but we’re also, more importantly, working with our allies around the world to move forward on sanctions and concerted, collaborated, coordinated approaches to really make the point that our concerns about what’s going on there are significant and need to be responded to by the Chinese government.
Question: Juste une question de suivi rapide sur un tout autre sujet. Il y a maintenant le Québec en fait qui dit qu’il est en troisième vague. Je voulais savoir en fait à votre avis, est-ce que le Canada est en troisième vague de COVID-19 actuellement et est-ce que ça va se refléter dans le budget fédéral à venir? Merci.
Prime Minister Trudeau: On sait depuis longtemps que ces variants… ces nouveaux variants représentent une menace réelle pour la santé des Canadiens et de gens partout à travers le monde. On est en train évidemment d’espérer que la vaccination continuera de procéder de plus en plus rapidement pour nous protéger contre une troisième vague. Mais en même temps on doit constater que ces nouveaux variants sont un peu partout au Canada et à travers le monde et nous nous devons de réagir.
Par rapport à la nomenclature ou l’identification je vais laisser ça à nos experts en santé publique. Tout ce que je sais c'est qu’on n’est pas sortis du bois encore. Il va falloir qu’on continue d’être vigilants et de faire attention.
Spokesperson: Merci. Now we'll try to go to a Jamaican reporter, Henry Balford, please. Henry Balford, are you there? Okay, we'll come back to you.
James Bays, Al Jazeera.
Question: Yes, can I ask all three, given the COVID‑related issues that you've talked about, what now are the chances of the world meeting the SDGs?
And, if I could quickly follow up to the Secretary‑General on Myanmar, what's your message to the generals right now?
Secretary-General: I would suggest that now we reverse the order. I spoke first in the last question. I think now it will be, Prime Minister Trudeau was the last, he should now probably be the first and then...
Spokesperson: Yes, sir.
Secretary-General: ... Prime Minister Holness, and then I will, in the end. I mean, we need to have some democracy here...
Secretary-General: ... some democracy here.
Spokesperson: Okay. Mr. Trudeau, please.
Prime Minister Trudeau: Thank you very much. I think, first of all, this crisis has shown us just how important it is to keep moving and indeed to accelerate on our adoption of the SDGs. These are all things that even though global pandemics are not directly recognized, there is talk about health in the SDGs; the challenges that this pandemic has highlighted, whether it’s the impact on women and girls; increased impact on the marginalized; the various health outcomes, particularly in the most vulnerable countries; the challenges of economic growth and opportunity; what we are seeing right now is a need for us to work together more and better than ever before.
And that is what the SDGs are all about and I think we will need to be accelerating our approach to meet the SDGs in time. I think the urgency is greater than ever before and I believe that our capacity to achieve that, just demonstrated by our capacity to respond, so many of us strongly to this pandemic, means that we’re going to be able to do it if we set our minds to it and I think the world is determined to learn from this terrible crisis on how to move forward in a better way for everyone.
Spokesperson: Thank you. Prime Minister Holness, please.
Prime Minister Holness: In a strange way, I hold the view that whilst there may be some short-term deviation from the pathway of achieving the SDGs, that we will... the world will quickly return to the pathway of achieving the SDGs, primarily because of the impact of the pandemic in health and education, and almost all developing countries will recognize that the recovery will depend on increasing their social spending on health and education, and to a significant degree as well for the development of broadband and digitization in their societies, which is why we’re here, discussing how can we finance this?
Are we going to finance this through rising debt and how we’ve previously done it before in previous crises, or are we going to take a more enlightened approach as the world, in ensuring that there is even recovery, fair recovery, right across the globe?
So, I'm optimistic, based on what I’m seeing and hearing in the international community. As the Secretary General said, this action, this initiative, our voices are being heard, and I am expecting that we will see in the near future ambitious actions towards ensuring that the financing of the recovery and the emerging debt as a result will be managed in a far more sustainable way.
Secretary-General: Well, we were not on track before the pandemic to make sure that we would be able to implement the SDGs fully in 2030, and one of the reasons why the pandemic has been so devastating is exactly because we were not on track in many of the issues that would be a good prevention against pandemics and other threats of this nature.
Now, we are speaking, we are spending, globally, trillions and trillions of dollars, probably reaching $20 trillion at a certain moment. Now, if this money is spent, first, in a more equitable way among countries and, second, to support an inclusive and sustainable recovery, we can accelerate the implementation of the SDGs.
If this money is spent just to go back to where we were, we will not go back to where we were - we will be much worse. And this is a choice that, first of all, needs to be done at the global level in relation to equity and, in each country, in relation to inclusivity and sustainability, and the picture is not yet clear. We are still seeing more investment in fossil fuels than in renewable energy, for instance, just to give an idea related to sustainability.
And we still see that we are not yet investing enough in strengthening health systems globally in a way that could prevent future pandemics much better than this one.
So it's not yet clear, but we can do it, and we must do it, because the alternative would be a disaster, and there won't be an opportunity like this one.
My message to the military is very simple: Stop the killings. Stop the repression of the demonstrations. Release the political prisoners and return power to those that have the legitimate right to exercise it.
Spokesperson: Okay, we will now go to Maan Alhmidi from the Canadian Press.
Question: Hello, Mr. Prime Minister Justin Trudeau. My question is for you. Will you work with Canada's rich allies to allocate more resources to poor and middle‑income countries to avoid a deeper recession caused by COVID‑19 pandemic? And what are the measures you would like to see to support these countries?
Prime Minister Trudeau: Yes, not only will we do that; that’s exactly what we’re here to do today. Canada, along with Jamaica and the UN Secretary-General, have been leading these discussions on ensuring that our economic recovery be more equitable and more just, right around the world.
I think there are three main areas that we’ve been focusing on. One is liquidity. Countries need access to cash so that they can support their citizens and get through -- and their small businesses -- and get through this crisis. We’ve seen countries like Canada be able to, because we came into it with a very strong fiscal position; able to do a tremendous amount of things to support citizens so that our economy comes roaring back as quickly as possible. Not every country is able to do that, and it is part of our own domestic self-interest to see countries around the world succeed through this so that we can all get back to the global economy as best as we possibly can in a positive way.
The second element is debt. We know countries are faced with crippling debt levels that we can all work together -- but we need to establish a common framework to make sure that all lending countries are part of the solution and as well private interests as well, and we also need to look at access and eligibility to debt. As Prime Minister Holness has pointed out a number of times, there are middle-income countries that are not amongst the poorest in the world but that are extremely vulnerable either to this pandemic because of their reliance on tourism, for example, or generally to the crisis of climate change, they have higher levels of vulnerability, and we need to ensure that the international financial institutions are ready to support them as we move forward. And that’s very much what... the conversations that Canada is happy to be a co-leader on through this process.
Question: Thank you, Mr. Trudeau, just a quick follow‑up. China has just announced it has invited the UN Human Rights Council to visit Xinjiang. Does Canada want to participate in this?
Prime Minister Trudeau: I think this is excellent news. It’s something Canada has been calling for for a long while now, but I will defer to the Secretary-General who has been leading the process as we’ve seen recently in getting independent observers into Xinjiang.
Secretary-General: As I had the occasion to say yesterday to the Canadian Broadcasting System, we are seriously engaging the Chinese Government in order to be able to have the mission of the Human Rights High Commissioner and to make sure that that mission has no unacceptable limitations, so I hope that this negotiation will be concluded positively.
Spokesperson: Thank you. I'm afraid we only have time for one last question, and we'll go to Iftikhar Ali of APP of Pakistan. Please.
Question: Thank you, although my question has been asked, but I will ask the Secretary‑General, who has used very strong words like "decisive action" to stave off the debt crisis. Sir, may I ask you what decisive action you are looking forward to stave off debt crisis on the developing countries?
Secretary-General: Well, what we have been discussing today are a number of very concrete things. First, in relation to the debt suspension initiative, to make sure that it is extended to 2022 and to make sure that its scope is enlarged to include those vulnerable middle‑income countries. We just saw the dramatic situation of the Small Island Developing States, but there are other situations, vulnerable middle‑income countries that also need to be addressed, the same kind of consideration in relation to the so‑called framework for debt that is now being put in place, and the need to make it operational. Only three countries until now have applied.
There is an important conversation that needs to engage the private sector, the credit rating agencies, all in order for them to come together and to allow for these operations to be successful. And, at the same time, I think we need to recognise that, beyond the debt relief that is necessary at the present moment, there must be a serious discussion on debt architecture and recognition that there are many gaps and many structural problems that need to be addressed and that we need to bring all actors together to make sure that we move into a sustainable debt architecture in the future.
Question: Monsieur le Secrétaire général, j’aimerais bien vous poser une question. Est-ce que vous pensez que l’impact du COVID aura vraiment, comment dire, ce sera dramatique pour l’économie africaine?
Secretary-General: Mais c’est évident. L’Afrique est le continent, en tant que continent, le continent le plus vulnérable. C’est une Afrique qu’on voit… Enfin, la combinaison terrible de l’impact du COVID avec les questions sérieuses de développement, avec les problèmes de sécurité, les conflits qui continuent et avec l’impact du changement climatique. Alors, la vulnérabilité de l’Afrique devrait mobiliser toute la communauté internationale pour un appui massif du continent africain pour qu’il puisse se redresser face au COVID-19.
Spokesperson: Thank you. And I'll just ask if Prime Minister Holness or Prime Minister Trudeau want to add anything else before we wrap up. Please.
Prime Minister Holness: I believe that the world has the capacity to avoid this potential debt crisis if we act with ambition and urgency. The idea of staving off the debt crisis, yes, it’s about providing liquidity and a structure within which debt can be managed. However, it also relies heavily on changing the investment flows to positively impact the economies of developing countries and that has to be a very serious conversation and consideration. Greater investigation is also a part of the success equation.
Prime Minister Trudeau: The international financial institutions are having their spring meetings in the coming weeks. The G7 is going to be meeting; the G7, the G20 is working together. We need all eyes to go not just to the vaccination challenges around the world but also to the economic challenges around the world. We know that getting vaccines to everyone as quickly as possible is going to get us through this pandemic, but through to what? We need to make sure at the same time as we are focused on the health, we are also focused on the health of the global economy and that means taking real action by leading countries around the world to recognize that it is not just in the global interest but in their own interest to ensure a more equitable global recovery.
We have the capacity to do it. We just need to develop the will to do it and that’s what we’re working on all together.
Spokesperson: Okay, thank you very much. That's all the time we have. Thank you to everyone.