Getting back on track with the SDGs
Progress towards meeting the UN’s Sustainable Development Goals was already shaky – and then COVID-19 struck. Huw Morris reports on the economics
Friends and colleagues of Kristalina Georgieva say she is neither given to hyperbole or over-exaggeration – so when the managing director of the International Monetary Fund (IMF) makes a dire warning, they tend to sit up.
At first sight, it was a straightforward question for the global financial institution’s number crunchers: amid the chaos caused by the COVID-19 pandemic, what is happening regarding the world’s pathway to reaching the UN’s Sustainable Development Goals (SDGs) by 2030?
The answers are “really sobering” and reveal a “dangerous divergence” between the world’s richest and poorest nations, which could even threaten global security, Georgieva warns. As a former chief executive of the World Bank, where observers say she gained a reputation as “the commander in chief of a fire station dealing with fires around the world”, her words carry significant heft.
Three factors determined how countries coped with COVID-19, the IMF found. Those with strong fundamentals and sound buffers, and diverse economies that were not dependent on tourism, entered the crisis in better shape.
A second factor was the ability to mobilise support of sufficient scale
to their economies, through monetary and fiscal stimulus. The third was the ability to access vaccines.
“The fortunes of countries are being determined by these three factors in a way that can dangerously undermine progress in development and affect global security down the road as a result,” says Georgieva.
The contrast between rich and poor is stark. Advanced economies have deployed 27% of GDP in monetary and fiscal measures; that figure is 6% in emerging markets, and just 2% in low-income countries that already had small GDPs. “With vaccinations clearly advancing in the countries that can afford to massively scale them up, we see a risk of countries falling behind and becoming even worse,” she adds.
Put bluntly, the pandemic has hamstrung development agendas across the world. COVID-19 may have condemned about 100 million people to extreme poverty last year alone, and the UN warns that, in some regions, poverty could rise to levels not seen for 20 years. It has its own dire warnings about the lack of progress in meeting SDGs (see Meeting SDGs).
This year’s UN progress report on meeting the SDGs makes grim reading. Even before the pandemic, the UN warns, progress was not happening fast enough to achieve them by 2030 – and it had even stalled or moved backwards in some areas. It says that the world’s collective response in the next 18 months will determine whether the pandemic turns out to be a “much-needed wake-up call” – especially to the lesson that “by threatening biodiversity, humanity threatens its own survival.”
Among a battery of recommendations, UN calls for equitable access to COVID-19 vaccines, and treatments and policies that strengthen the financial position of developing countries and embrace a recovery guided by the 2030 SDG agenda.
It states that the recovery should be used to adopt low-carbon, resilient and inclusive development pathways that will reduce emissions, conserve natural resources, create better jobs, advance gender equality and tackle growing inequities. Governments should also put clean and sustainable energy “at the heart of the COVID-19 response and fight against climate change”.
The SDGs in serious trouble include:
GOAL 1 – No poverty
Ending poverty by 2030 is out of reach unless governments put in place substantial policy actions, including social protection systems.
GOAL 2 – Zero hunger
The pandemic may have pushed 83-132 million people into chronic hunger in 2020.
GOAL 3 – Good health and wellbeing
Essential health services are still disrupted in 90% of countries.
GOAL 4 – Quality education
Vulnerable children and those unable to access remote learning are at risk of not returning to school, child marriage or child labour.
GOAL 5 – Gender equality
The pandemic has led to intensified trends in violence against women and girls, more child marriages and increased care work at home.
GOAL 10 – Reduced inequalities
The UN says SDG progress in the poorest countries is being pushed back 10 years because of the pandemic.
GOAL 17 – Partnerships
Foreign direct investment is expected to drop by 40%. This and other factors are shrinking countries’ ability to make critical investments in recovery, climate change and SDGs.
At the same time, the amounts that governments are spending on achieving the SDGs is considerably depleted. Low-income countries are caught between the Scylla of spending urgently to protect lives and livelihoods and the Charybdis of long-term investment in education, health, infrastructure and other essential needs. This could be even more significant if COVID-19 leads to permanent economic scarring, with the IMF fearing that there will be long lasting damage to “human capital” and growth potential.
“We are not talking enough about pent-up protest,” says Georgieva. “We know that after a crisis, some 18 months or two years later, if inequality is not addressed it translates into discontent. This can be fertile ground not only for the unproductive use of talent, but also for violence, for populism, for things that hurt economies.”
Acting with urgency
The IMF admits that meeting the SDGs will now require “extraordinary efforts from all stakeholders”, and such efforts will have to continue beyond 2030.
Some countries will need to spend around 14% of their GDP every year between now and 2030 to meet the SDGs; without such spending, a number of countries will not be able to reach their SDGs even by 2050.
The IMF adds: “this dire reality makes it all the more important to pursue economic recovery policies that are carefully designed to support higher and more inclusive growth and generate more resources for development.”
Mindful that the climate crisis “has gone nowhere and, if anything, the urgency to act is absolute”, Georgieva says the IMF is focused on combining the exit from the COVID-19 economic crisis with a shift towards green growth. Now is not the time for austerity.
The IMF has considerable clout: it has provided US$110bn of emergency financing to 86 countries, including
52 low-income nations, since the pandemic started. It has committed US$280bn overall, and under its Special Drawing Rights – an international reserve asset created by the IMF in 1969 to supplement member countries’ official reserves – a further US$650bn will help poor nations without adding to their debt burdens.
Carbon pricing will be crucial, the IMF says. It notes that only 23% of emissions are covered by some form of carbon price through tax or trade – although that is 5% more than last year – and it will push for more. Yet its most notable campaigning will be for green growth, particularly infrastructure. Georgieva wants to see “massive investment into reducing carbon intensity of buildings”, bringing down inefficiency and increasing the amount of construction that reduces energy consumption.
UK international development spending
Despite a manifesto commitment to spend 0.7% of GDP on international development, the UK government has controversially reduced this spending to 0.5%.
The cut is equivalent to around £4bn, although the government has said it will spend more than £10bn on foreign aid in 2021. However, the UK is the only member of the G7 advanced group of economies to reduce such spending this year, a move that has sparked a major backlash – not least from its own backbench MPs.
A letter to prime minister Boris Johnson signed by more than 1,700 academics, charities and business leaders – including leading non-governmental organisations such as
Action Aid, Oxfam, Save the Children and WWF UK – said making the cut during the pandemic was a “double blow to the world’s poorest communities”.
The spending cut has already led to the closure of feeding centres and clinics, and has also forced the cancellation of projects including water sanitation and training for healthcare workers.
In 2020, the UK spent £14.5bn on aid, meeting its 0.7% target, according to Foreign Office figures. Almost all the money went to countries in Africa and Asia, with the top five recipients being Pakistan, Ethiopia, Afghanistan, Yemen and Nigeria.
Agriculture, reforestation and land restoration will come into the spotlight, and the IMF will heavily back renewables. “It is unforgivable for countries that have plenty of sunshine but very little solar,” she adds. “How could that be? There is so much we can do that creates jobs, growth opportunities and resilience to climate change.”
“Economists are saying the world needs more debt and government spending in order to get out of this crisis”
Ian Goldin, Oxford University professor of globalisation and development (see interview on p12), says it is notable that economists such as Georgieva are saying the world needs more debt and government spending in order to get out of this crisis. “It’s not just lefty economists saying this – the centrists and the orthodox are saying the same thing.
“To put SDGs back on track for low-income countries that spend the money appropriately and don’t put it in Swiss bank accounts, there needs to be a write-off of debt, so they get more fiscal space. It’s one of the tragedies of this particular crisis, compared to previous ones, that this discussion has not advanced. That shows very poor leadership in the G7 and the G20.”
Advanced economies have deployed 27% of GDP in monetary and fiscal measures; emerging markets 6%; low-income countries just 2% 100m COVID-19 may have condemned about 100 million people to extreme poverty last year
Some countries will need to spend 14% of their GDP every year between now and 2030 to meet the SDGs
The IMF has provided US$110bn of emergency financing to 86 countries since the pandemic started
Huw Morris is a freelance journalist