Tue, Apr 16, 2019 - Page 9 News List

Crisis of multilateralism is an opening to assert UN’s goals

By Liu Zhenmin

When Cyclone Idai hit Mozambique, Malawi, Zimbabwe and Madagascar last month, it left almost 1,000 people dead and hundreds of thousands more homeless, hungry and threatened by disease. According to one estimate, more than US$1 billion worth of infrastructure could have been lost.

Such catastrophes have become depressingly familiar. Idai was the latest in a series of extreme weather events showing that the devastating effects of climate change lie not in some distant future, but in the present. Worse, the world’s poorest and most vulnerable communities are being hit the hardest.

Mozambique — the nation that sustained the most damage from Idai — will have to rebuild with both hands tied behind its back, because it is currently stuck in negotiations to restructure its unsustainable debt.

To address such challenges, in 2015, the international community adopted the 2030 Agenda for Sustainable Development, which laid out a path to shared prosperity and sustainability. However, the Sustainable Development Goals (SDGs) will not be achieved unless we overhaul our financial systems in accordance with the UN’ Addis Ababa Action Agenda. We need a global financial architecture that will enable us to fund necessary investments — including in resilient infrastructure — respond rapidly to shocks and put struggling countries on sound financial footing.

There has been some progress. A new UN assessment of global sustainable-development financing, conducted in collaboration with the IMF, the World Bank and the Organisation for Economic Co-operation and Development, finds that private-sector interest in sustainable finance is growing. Moreover, the SDGs are increasingly being incorporated in public budgets and development cooperation efforts.

However, these changes are not happening fast enough nor on anywhere near the scale required. For example, at US$43 billion in the first half of last year, total private-sector investment in developing-country infrastructure is lower today than it was in the same period in 2012. To meet the goal of providing universal primary education by 2030, annual education spending in the world’s poorest countries will have to be more than tripled.

At the same time, systemic risks need to be addressed to avert future crises. The outlook is not promising. The global economy’s growth has peaked at 3 percent, which is far short of what is needed to eradicate poverty in many countries. In 2017, real (inflation-adjusted) wages rose by only 1.8 percent, the lowest rate in a decade. Most of the world’s people now live in countries with rising levels of income inequality.

Although globalization has increased wealth substantially and allowed for significant progress in fighting poverty, the gains have not been shared equitably. Far too many households, communities and countries have been excluded from rising prosperity.

Against this backdrop, it is not surprising that trust in multilateralism itself has eroded in many parts of the world. Yet while the multilateral order is suffering a crisis of legitimacy, it is also being afforded an opportunity. Rapid change — in geopolitics and technology, in addition to the Earth’s climate — have focused our collective attention on challenges to existing arrangements in global finance, trade, debt, tax cooperation and other areas. Now that we are revisiting those arrangements, we can repurpose them for sustainable development.

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