Industry Desk: One in three countries around the world is now at high risk of a fiscal crisis, UN Secretary-General António Guterres says, as review shows trillions of dollars are needed to achieve Sustainable Development Goals (SDGs).
Nearly 40% of all developing countries suffer from severe debt problems. These countries cannot fund progress on the SDGs if they are facing exorbitant borrowing costs and paying more on debt servicing than on health or education, said a UN statement.
“Developing countries face borrowing costs up to eight times higher than developed countries – a debt trap. And one in three countries around the world is now at high risk of a fiscal crisis. Over 40% of people living in extreme poverty are in countries with severe debt challenges,” warned UN Secretary-General António Guterres.
The SDG financing issue was discussed in New York during the UN General Assembly at the UN High-level Dialogue on Financing for Development.
World leaders gathered at the dialogue on September 20 to set out bold solutions to urgently scale up investments.
Held every four years since 2015, following the adoption of the Addis Ababa Action Agenda – the roadmap for financing the SDGs – the 2023 High-level Dialogue on Financing for Development took place at a critical moment, when only around 15% of SDG targets are on track.
While progress has been made across all action areas of the Addis Ababa Action Agenda, many of its commitments remain unmet, the UN said.
Moreover, challenging economic prospects amid the lingering effects of the Covid-19 pandemic, conflicts and intensifying climate change have put financing for the SDGs under increased pressure.
SDG financing requires innovative approaches Aggressively scaling up SDG financing will require innovative approaches, bold policy decisions, and new sources of funding, the UN says.
Member States welcome the UN Secretary-General’s proposal for an SDG Stimulus of at least $500 billion per year to significantly increase affordable, long-term financing for development.
They also support his call for deeper and longer-term reforms to the international financial architecture, which currently fails to serve as a safety net for all countries and exacerbates inequalities.
“It is clear that the systemic problems of financing for sustainable development require a systemic solution: reforms of the global financial architecture,” said the UN Chief, calling for a new Bretton Woods moment when countries can come together to agree on a global financial architecture that reflects yesterday’s economic realities and power relations.
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