BUSINESS MONDAY: UNCTAD official: Developing countries need access to adequate financing
THE administration of new US President Joe Biden holds the key to developing countries including Barbados, getting access to new financial allocations under the Special Drawing Rights (SDRs).
This is the view of Richard Kozul-Wright, Director of the Division on Globalization and Development Strategies at the United Nations Conference on Trade and Development (UNCTAD).
He has told a news conference in Barbados that the international community needs to wake up to the myriad of problems facing these countries, and warned that without significant financing, these countries will remain in a debt crisis.
The official highlighted several challenges facing developing countries, among them the fallout from COVID-19, including slow distribution of vaccines, lack of access to adequate financing, growing debt, lack of policy space, and a situation where the G7 and G20 countries promised a lot but failed to deliver.
“These are real concerns; we need to discuss them at UNCTAD 15,” he remarked.
He argued that both the G7 and G20 groups of industrial nations had failed to deliver on their commitments to developing countries, with the latter taking a year to make good the plans with the SDRs.
However, the UNCTAD official reasoned that the allocations will be effected with the new US administration.
Kozul-Wright told the media that only the UK of the G7 countries had met the target of making available 0.7 per cent of their GDP to funding. That is going to add an additional Bds$300 billion (US$150 billion) in financing to the developing world.
As for the global trading system, he said that there is a concerted push to dilute Special and Differential Treatment (SDT), a broad-based facility developing countries have been agitating for since the Uruguay Round of global trade talks and which continued within the Doha Round.
The UNCTAD official said that a whole series of issues are coming to a head this year.
The Director of the UNCTAD Division explained that they have done a study which shows that failure by developing countries to get the necessary assistance will mean their inability to achieve the sustainable development goals by 2030.
Furthermore, there will be two other scenarios facing them – one is that they will have to borrow at a scale that will push their debt-to-GDP ratios well into triple-digit figures; and the other is that they will have to grow their economies by at least 12 per cent, which is very unlikely.
Mr. Kozul-Wright informed that the end of this year will be crowded given the plans to have the UNCTAD 15 conference here, and the World Trade Organisation’s (WTO) Ministerial conference as well as the Climate Change meeting in Glasgow.
He pointed out that these events are going to be circling around the same kind of challenge, leading to a number of questions.
According to him, “Are we going to build back together and better, or are we going to build separately or not at all?”
He went on, “The chances at the moment are in favour of the latter, which is a matter of concern for the Caribbean.”