UNCTAD-15 conference gets underway in Barbados

UNCTAD Logo. Creative Commons

Geneva, 5 Oct (Kanaga Raja) – The fifteenth session of the United Nations Conference on Trade and Development (UNCTAD-15) got underway in Bridgetown, Barbados on 4 October, under the theme “From inequality and vulnerability to prosperity for all”.

The conference, hosted by the Government of Barbados, is being held in a virtual format and runs until 7 October.

The opening ceremony on 4 October featured welcome addresses by United Nations Secretary-General Antonio Guterres, Prime Minister of Barbados Ms Mia Amor Mottley, UNCTAD Secretary-General Ms Rebeca Grynspan and President Uhuru Kenyatta of Kenya (the host of UNCTAD-14, held in Nairobi, Kenya in July 2016).

In his remarks at the opening ceremony on 4 October, UN Secretary-General Antonio Guterres said UNCTAD-15 “is the Olympics of trade, development, investment, policy and technology discussions.”

Mr Guterres reiterated his wake-up call to world leaders and a call to action “to tackle the cascade of crises facing us.”

In this context, he highlighted poverty and inequalities; conflicts and climate change; environmental degradation and disasters; and mistrust and division.

He also pointed to the COVID-19 pandemic, which has claimed almost five million lives so far.

“The pandemic has wreaked havoc across the global economy. It disrupted the powerful economic engines of trade, manufacturing and transportation. Millions of jobs have been lost at a time when social protections remain out of reach,” said the UN chief.

“120 million people fell into poverty last year. 811 million are going hungry. Tens of millions of children remain out of school – particularly girls.”

The Secretary-General also said that for the first time in two decades, the human development index has declined.

“We’re moving in the wrong direction. Decades of hard-won development progress are slipping away before our eyes. And the Sustainable Development Goals are at risk of failure,” he told the delegates.

“We need to turn this around with a bold, sustainable and inclusive global recovery. One that benefits the many, rather than the few. One that delivers hope to people – and healing to our planet. And one that levels the playing field for all countries as they support their people during this extraordinary moment in history.”

“There is seemingly good news. Some estimates show that we’re in the midst of a substantial economic recovery – with world GDP growth ranging between five and nearly six per cent. But we know the other side of that story. This recovery is not evenly shared,” he added.

Advanced economies are investing nearly 28 per cent of their GDP into economic recovery. For middle-income countries, that falls to 6.5 per cent. And it plummets to 1.8 per cent for the least-developed countries – 1.8 per cent of a very small gross domestic product.

“In all, more than eight out of every ten dollars in recovery investment is being spent in developed countries – not in the countries in greatest need,” said Mr Guterres, adding that an uneven recovery is leaving much of humanity behind.

“And until we get serious about vaccine equity, recovery will be stuck at the starting gate,” he cautioned.

“Wealthy countries have far more vaccines than people. Yet more than 90 per cent of Africans have yet to receive their first dose. This is an outrage. And as variants take hold and spread, this is a recipe for disaster, threatening us all,” he said.

Mr Guterres reiterated that the world must mobilize behind a global vaccination plan with clear targets for every country.

“We need to dramatically ramp-up vaccine production and get them into the arms of 70 per cent of people, in all countries, in the first half of 2022.”

However, the UN chief said that vaccines are the first step in a much longer race. He said the theme of UNCTAD-15 – “From inequality and vulnerability to prosperity for all” – captures the heart of the challenge.

The Secretary-General highlighted four glaring challenges, which – if not addressed – make any notion of prosperity for all a distant dream.

“Debt distress. Systems starved for investment. Unfair trade. And a climate emergency that leaves small island developing states like Barbados perilously vulnerable,” he said.

The first challenge is the imperative to tackle debt distress, he said, adding that left unchecked, debt distress is a dagger through the heart of global recovery.

Countries cannot build back if they are held back. The international community has taken a few positive steps, but it is time for a quantum leap in support, he said.

Against this backdrop, the Secretary-General proposed an urgent four-point debt crisis action plan.

“To start – we know national budgets are being stretched thin by COVID-19, so we must push for an immediate expansion of liquidity for the countries in greatest need,” he said.

In this context, the UN chief welcomed the recent issuance of $650 billion in Special Drawing Rights (SDRs) by the International Monetary Fund. However, he noted that this support largely goes to the countries that need them least, as they are distributed according to the quotas.

“Today, I am calling for a substantial re-allocation of unused SDRs, not a symbolic one, a substantial re-allocation to vulnerable countries that need them – including middle-income countries.”

“Second – we know countries are being crushed by debt service costs, so we need an extension and expansion of the G20’s Debt Service Suspension Initiative (DSSI) into next year.”

The Initiative – and the Common Framework for Debt Treatment Beyond the DSSI – have great potential to ease the debt crisis, said Mr Guterres. But they are too limited in eligibility and timeframe, said the Secretary-General.

Suspending debt service should be extended into next year and also made available to all countries that need it, including middle-income countries, he added.

“Third – we know suspending debt payments will not be enough in many countries. They will need effective debt relief, involving both public and private creditors.”

The UN chief renewed his call for a comprehensive strategy around reforming the international debt architecture – including debt restructuring or reduction, especially for middle-income countries – to help them avoid deadly cycles of debt waves. “We should look at innovative debt instruments like debt swaps, buybacks and exchanges,” said Mr Guterres.

“Fourth and finally – we need private finance to help fill the gap. It is deeply unfair that rich countries can borrow cheaply and spend their way to recovery – while low- and middle-income countries struggle to keep their economies afloat.”

“We need to bring together the public and private sectors to develop innovative financing tools to accelerate the return of private investment to pre-pandemic levels – which will, in turn, accelerate recovery.”

According to Mr Guterres, the third challenge is to re-ignite the engines of trade and investment, and ensure they benefit the poorest countries. COVID-19 has put the brakes on the contribution of trade to economic growth. The trade-to-GDP ratio remains below pre-pandemic levels, he said.

The pandemic also derailed investment, with Foreign Direct Investment plunging by 35 per cent last year. And in its current state, the global trade system remains heavily stacked against the poorest countries.

“They are victims of unfair trade rules and barriers, unpredictable commodity prices, outdated infrastructure and transportation systems, and lack of access to digital tools.”

“We need open and fair trade rules, so all countries can compete on a level playing field no matter their position on the development ladder,” said the Secretary-General. “We also need to help developing countries modernize their infrastructure and trade flows – reducing costs and increasing efficiencies.”

According to Mr Guterres, this is vital to support their transition to green economies grounded in sustainable and renewable energy. It includes modernizing transportation – especially the shipping industry, which transports 80 per cent of global merchandise.

Automation and digital solutions can reduce bottlenecks and help this vital industry decarbonize, said the UN chief, underlining the need to build a global green economy.

According to UNCTAD, in her opening address, UNCTAD Secretary-General Ms Rebeca Grynspan said the world stands at a critical point in the history of multilateralism amid the many challenges facing it. She highlighted that many developing regions are facing the prospect of another “lost decade”, and the reversal of their hard-won progress in the fight against poverty, inequality, food insecurity and gender inequality due to the pandemic.

Ms. Grynspan also pointed to a deeply divergent recovery, with advanced countries growing and vaccinating at rates many times greater than those in the developing world.

“The inequalities we are witnessing in the access to vaccines and financial resources are today at the very heart of this divergence,” she said. “Lives and livelihoods that could be saved, are not being saved in wide regions of our world – and that is, indeed, an outrage!”

In this regard, Ms Grynspan noted that the advanced countries are already discussing third doses, while least developed countries (LDCs) have only vaccinated 2% of their population. “Advanced countries have just produced the largest and most heterodox expansion ever seen in fiscal and monetary policies,” she said.

On the other hand, developing countries dealing with large and differentiated debt burdens, as well as very limited fiscal margins, had spent only a fraction of what is needed to respond adequately to the multiple demands of this health, socioeconomic and climate crisis.

“Our countries, our societies, demand from us concrete measures, for a more prosperous and less fragile world; to achieve that, we need to work on a more inclusive multilateral system,” said the UNCTAD Secretary-General.

According to UNCTAD, Barbados Prime Minister Mia Amor Mottley underscored UNCTAD’s critical role in championing the interests of the most vulnerable countries as they chart a new path to recovery from COVID-19.

“This organization [UNCTAD] was formed to give voice and protection to developing nations. If ever there was a time for that voice to be heard on issues of trade and development, it is now,” she said.

She voiced concern that the international community has not been doing much in dealing with the climate crisis, which she said poses an existential threat to island nations, and debt, which undermines the ability of small island developing states (SIDS) to sustain their economies.

“It’s immoral and unjust in the extreme for someone to cause our societies to face an existential crisis and expect us to pay on our own,” said Ms Mottley.

Ms Mottley expressed hope that the “Bridgetown Covenant” from UNCTAD-15 would provide a framework for moving from actions to concrete results in tackling these challenges. “We do not wish our names to be associated with failure,” said Ms Mottley. “To that extent, our government, our Caribbean community will work assiduously to ensure that the policy initiatives and legislative frameworks that we need at the national level are put in place.”

According to UNCTAD, Kenyan President Uhuru Kenyatta called on the global community to come together to work towards a functional multilateral system. “No single government or multilateral agency can address global threats alone,” he said. “We must work together in solidarity if we are to succeed.”