LDC Insight #1: COVID-19 recovery and achieving the Sustainable Development Goals: Why LDCs can’t just ‘build back better’

12 August 2022 / Federica Irene Falomi and Taffere Tesfachew

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In 2019, the United Nations Secretary-General, Antonio Guterres, noted that “despite considerable efforts these past four years, we are not on track to achieve the Sustainable Development Goals by 2030”^[1], suggesting that the global growth and development model was already suboptimal and unsustainable. Three years and a global pandemic later, years of progress towards SDGs have been revered or wiped out. Global poverty rate sharply increased from 8.3% in 2019 to 9.2% in 2020 due to COVID-19, representing the first increase in extreme poverty since 1998 and the largest since 1990, and setting back poverty reduction by around three years. The losses have been much higher for low-income countries, which have been set back by 8-9 years^[2]. Furthermore, the pandemic has not only exposed large inequalities across countries in terms of access to finance, health care services, medicines and vaccines but has also intensified them and widened the gap even further.

We have entered the Decade of Action to deliver the 2030 Agenda for Sustainable Development and Sustainable Development Goals (SDGs). This universal call to action to end poverty, protect the planet and ensure that by 2030 all people enjoy peace and prosperity is more relevant than ever. However, if the SDGs are to be achieved globally by 2030 - in line with the principle of “leaving no one behind” - they must be achieved everywhere. To date, progress towards achieving the SDGs in the least developed countries has been uneven and is not on track to achieve the targets set in the 2030 Agenda. The pandemic abruptly interrupted a prolonged period of sustained growth for some least developed countries, which are collectively home to 14 per cent of the global population but comprise more than 50% of the world’s extremely poor and account for only 1.3 per cent of global GDP.

Given the post-COVID-19 trend and the persistent challenges facing the LDCs, it is highly likely that they will end up being “the battleground on which the 2030 Agenda will be won or lost”. Indeed, the SDGs recognize that these countries require special attention as demonstrated by the fact that 12 of the 17 SDGs directly and specifically target the least developed countries^[3].

LDCs require huge amounts of resources to recover from the recessions caused by the COVID-19 shock, but especially to set themselves on the path to achieving the Sustainable Development Goals. UNCTAD has estimated that between 2021 and 2030 LDCs require investments of:

1. $462 billion annually to meet the growth target (Sustainable Development Goal 8.1);
2. $485 billion annually to eradicate extreme poverty (Sustainable Development Goal 1.1); and
3. $1,051 billion annually to double the manufacturing share of GDP (Sustainable Development Goal 9.2)^[4]. 

Thus, a key component of ‘building forward better’ should be the introduction of new sets of international support measures and a renewed international commitment to ensure that low-income countries, particularly LDCs, are not left behind – but instead regain the growth momentum that they lost with the COVID-19 shock. These are countries with structural impediments, limited productive capacity, low income, and low skills and knowledge base. Hence the need for special international support measures to assist them with transfer of technologies and the development of their science, technology, and innovation capacities, which are essential requirements for promoting technological learning and innovation.

According to the World Bank and recent UN projections, during 2022, the global economy is expected to experience uneven recovery and most low-income countries will register lower economic growth and deterioration in social indicators. While the Ukraine crisis and its negative impact on food and energy prices have contributed to this outcome, the single most important reason for the unequal recovery is the unequal access to the COVID-19 vaccine. Despite WHO’s ambitious target of 70% global vaccination coverage by mid-2022, the number of people in the poorest countries who have received a single dose of vaccine remain less than 10% compared to the average 80% in high-income countries. If the gap in vaccination rates between rich and poor countries persists, it is likely that the goals of early recovery and building forward better will remain distant dreams.

The COVID-19 pandemic has shown us how far the world has come in technological and scientific knowledge accumulation as demonstrated by the speed in which vaccines were developed and the role played by technologies in sustaining economic and social interactions. When lockdown measure was introduced across countries to slow down the spread of coronavirus, lack of affordable access to internet in most LDCs meant that many people and businesses in these countries were denied of the high-speed networks required for remote learning, e-commerce, digital-based healthcare services, access to e-government and online business interaction. In this respect, the COVID-19 shock was a wake-up call for the LDCs and other low-income countries and an important lesson that they cannot afford to lag behind in their technological capabilities or miss active engagement in the new wave of rapid technological change.

At this time of current heightened uncertainty and multidimensional global crisis, LDCs need special international support measures more than ever. The right mix of policies and financial support to help them develop their science, technology and innovation capacities must be at the core of renewed international support measures for LDCs. International organizations can play a key role in assisting the LDCs to close the digital gap by facilitating opportunities for technology transfer, including through South-South cooperation, and drawing lessons from countries that have advanced digital ecosystem. The COVID-19 pandemic is likely to be remembered as the Great Digital Accelerator, especially for its role in accelerating the need for digital transformation in the least developed countries. For this reason, the UN Technology Bank for LDCs calls upon the international community to give priority to the implementation of SDG’s Target 9c, which has already been missed. Target 9c focuses on the need to “significantly increase access to information and communication technology and strive to provide universal and affordable access to the internet in the Least Developed Countries by 2020”. Unfortunately, this target remains unmet, except in Bangladesh and Bhutan. The fact that this critical target remains unmet is a signal to the international community to act without delay and to bear in mind that the vision of meeting the SDGs by 2030 will not be achieved unless such persistent challenges in LDCs are addressed. To this end, with support of the Government of Türkiye and other Turkish institutions and drawing lessons from an initiative developed by the Ministry of Industry and Technology in Türkiye, the UN Technology Bank is piloting the Technology Makers Lab, a digital transformation training programme for youth in the LDCs to transform their skills base and enable them to face future shocks.

As countries dive into the promises of the Fourth Industrial Revolution, it must be noted that no country has yet shown to be convincingly able to meet a set of basic human needs at a globally sustainable level of resource use^[5]. Indeed, even before the pandemic, trends along several dimensions with cross-cutting impacts across the entire 2030 Agenda were not moving in the right direction: rising inequalities, climate change, biodiversity loss and increasing amounts of waste from human activity. Countries have a duty to build forward better and put sustainable development at the heart of their recovery agenda, to enable fairer economic systems, reduce inequality and the number of people living in extreme poverty, create stronger health systems, a healthier natural environment, and more resilient societies. The impacts of unsustainable development are unevenly borne by countries. Although the least developed countries contributed the least to climate change, they suffer the most from its impacts and are expected to compensate for others. For instance, many developed countries export their post-consumer plastic waste passing on the problem to typically poorer countries to deal with. Climate change-induced rising sea levels have severe impacts on small Pacific atoll nations, including the two LDCs of Solomon Islands and Tuvalu, with entire islands at risk of becoming uninhabitable due to coastal flooding, storm surges, cyclones and land loss. LDCs experienced 70 per cent of the deaths caused by climate-related disasters over the last 50 years and reported more than 8.5 million people displaced due to disasters in 2020.

Hence, poorer countries need increased support from the rest of the world, counteracting current trends of shrinking overseas development assistance (ODA), fulfilling the promises made by the international community to advance climate finance, and placing people and the environment at the core of COVID-19 recovery packages. There will be no shared peace and prosperity unless we aim to achieve a truly inclusive recovery from the current global crisis and attain the 2030 Agenda through collective responsibility and renewed commitment to multilateralism. In the ‘Decade of Recovery and Action^[6], the SDGs should be used as a shared global framework to drive support for structural transformation in LDCs and build global systemic resilience.