Global Policy Watch

By Roberto Bissio

What is the purpose of the Americas Partnership for Economic Prosperity (APEP) that will bring ten Latin American presidents and the Canadian prime minister to meet with President Joe Biden at the White House on 3 November?

 Nobel Prize-winning economist Joseph Stiglitz and influential Democratic Senator Elizabeth Warren have a suggestion: it is the great opportunity to do away once and for all with the private arbitration tribunals that condemn governments to pay huge amounts of compensation to large corporations for lost profits due to health and safety legislation, thereby inhibiting democratic decisions.

A year after its launch at the Summit of the Americas, APEP will meet for the first time and is expected to be attended at the highest level by Barbados, Canada, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Panama, Peru and Uruguay, in addition to the host. “We are 90 percent of the Western Hemisphere’s GDP and about two-thirds of its population. There is nothing we can’t do together,” announced Secretary of State Antony Blinken optimistically.

More realistically, the Republican think tankAmerican Action Forum argues that since the USA already has free trade agreements with 8 of the 11 participants and the Partnership does not intend to negotiate tariff reductions, “the talks will not result in increased regional trade flows”.

The goals of the Alliance, as stated by President Biden in several speeches, are not commercial, but aim to fight inequality, improve the situation of workers and public health, combat climate change and strengthen democracy. “None of these goals can be achieved if private systems of investor-state dispute settlement are maintained,” Stiglitz explained on October 26 during a virtual conference co-organized by the Columbia Center on Sustainable Investment (CCSI), Georgetown Law’s Center for the Advancement of the Rule of Law in the Americas (CAROLA), the Center on Inclusive Trade and Development (CITD) and Rethinking Trade..  Known by the acronym ISDS, these private tribunals are included as an investment protection mechanism in almost all free trade or investment agreements signed since 1994, when the North American Free Trade Agreement (NAFTA) enshrined them in its chapter 11.

In just one year after NAFTA, APEP countries signed 60 investment agreements, at a rate of five per month. Today, the countries of the Americas have accumulated 842 investment or free trade agreements with clauses enabling private arbitration, 47 of which are between the governments now meeting in Washington. Stiglitz was an advisor to President Clinton, vice president and chief economist of the World Bank in the last decade of the 20th century, developing countries came under what he considers “very aggressive” pressure for ISDS from the most advanced countries “which in turn answered to their big corporations”. During the conference, Lori Wallach, director of Rethinking Trade, presented a white paper by the organizers entitled Turning the Tide: How to Harness the Americas Partnership for Economic Prosperity to Deliver an ISDS-Free Americas. “The U.S. government pushed the ISDS regime on its neighbours before neoliberal policies became contested and with this initiative would be acting as a real partner in seeking to undo the damage,” she explained.

Traditionally used to settle disputes between private parties, arbitration tribunals are composed of specialized lawyers who rotate between defending corporations and arbitrating between them. ISDS authorize companies to sue states for any policy or legislation they feel aggrieved by. There is no limit to the compensation they can impose, nor do they allow for reciprocity: states cannot sue multinational companies if they are harmed by them, nor can they claim compensation for any windfall profits corporations may make, as happened during the pandemic.

In three decades, no evidence has been produced showing ISDS having stimulated more investment into countries that admit them than to those that do not, such as Brazil, Stiglitz explained. But there is ample evidence that their very existence acts as an inhibitor of democratic policymaking, since “any rule that affects the value of an asset is seen as an expropriation”. Courts even apply the concept of “profit expectations”, which is impossible to pin down economically, but for which arbitrator-lawyers award generous compensation.

Thus, since it banned offshore oil exploration, Italy has been sued by “aggrieved” companies that had not yet begun to invest. When President Obama halted construction of the XL pipeline across North America to bring fossil fuels from the Arctic to the USA, oil companies filed a US$15 billion lawsuit.

The claim was dropped when President Donald Trump reauthorized the pipeline and re-filed when Joe Biden stopped it again in the first month of his presidency. “When Congress passed these agreements, no one ever thought they could be used against the United States,” Senator Warren recalled. It has been estimated that, if countries were to comply with their commitments under the Paris Agreement to combat climate change, oil companies could sue them for US$340 billion.

Historically, tribunals find in favour of corporate claims twice as often as in favour of governments, not to mention that most cases are settled through negotiations (and payments) prior to the arbitrators’ final decision. The databases record a total of 231 cases that have already cost the 12 Alliance countries US$2,742,790,201. A further 73 cases are pending, for a total demand of US$47 billion.

A particularly affected country, Ecuador, has already initiated procedures to withdraw from (“denounce”) these investment treaties and many other countries are doing the same. But when an investment treaty is unilaterally ended, “survival clauses” cause its effects to persist for five or even ten years. However, when both parties decide to terminate or modify the treaty, the effects are instantaneous. Thus, the new agreements that replace the North American FTA eliminated ISDS entirely between the USA and Canada and make it harder to initiate claims between the USA and Mexico.

That is why the white paper proposes that, to advance its goals, APEP should become a collective forum to end ISDS among its members and thus spearhead a global movement.

In May 2020, well into his election campaign, Joe Biden said, “I don’t believe corporations should have special tribunals, unavailable to other businesses, and I oppose private interests being able to attack labour, health and environmental policies through ISDS.”

Last week, the US president joined the picket line of strikers who won a historic arm-wrestling match with the auto industry, and in Geneva his negotiators at the World Trade Organization announced that they no longer support the idea of an e-commerce agreement, which many denounced as favouring big tech corporations.

Three decades later, will it be possible to dismantle a powerful weapon of transnational capital with an alliance of trade unions, academics, anti-globalization activists and the US president?

So far, the agenda of the November 3 summit has not been announced and Democratic Senator Tim Kaine, Chairman of the Subcommittee on Western Hemisphere has only asked  the White House, “How will APEP help counter the influence of investments in critical infrastructure coming from Chinese State-Owned Companies into Latin America?”

The post An alliance to end corporate privileges? appeared first on Global Policy Watch.

The Global Policy Watch Team

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Considered a “once-in-a-generation opportunity” to address inequities in global governance and reset international cooperation, the Summit of the Future (SoTF) will be a cornerstone among a series of high-level UN meetings in 2024. While Member State priorities differ, they have confirmed that the Summit will be held on 22-23 September 2024 and have agreed on the elements and next steps towards the adoption of “a concise, action-oriented outcome document entitled ‘A Pact for the Future’, agreed in advance by consensus through intergovernmental negotiations”.

This Global Policy Watch fact sheet explores the process and negotiations going forward and the different priorities revealed in Member State statements.

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The Global Policy Watch Team

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Many world leaders during the UN General Assembly High-level General Debate (19 to 26 September 2023) referenced the sorry state of multilateralism and the various alignments and groupings, some to counter the lack of agency and redress power asymmetries across multiple policy streams. In conjunction with the historical responsibilities of developed countries for carbon emissions, many called for reparations for slavery and colonialism, highlighting the historical injustice that continues to disadvantage developing countries. Reform of the international financial architecture featured consistently on the agenda, as did a focus on demands for action on Loss and Damage at the upcoming COP 28 and the devastating debt distress, especially in small- and medium-sized countries.

All Member State statements, summaries, and video and audio recordings are available at the official UNGA General Debate webpage.

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Whither multilateralism: shifting alliances

Luiz Ignácio Lula da Silva, President of BRAZIL:
“The principle on which multilateralism is based, that of sovereign equality between nations, has been eroding at the main global governance levels…. When institutions reproduce inequalities, they are part of the problem, not the solution. Last year, the IMF made available US$160 billion in special drawing rights to European countries and just US$34 billion to African countries. The unequal and distorted representation to the management of the IMF and the World Bank is unacceptable. We have not corrected the excesses of market deregulation and the support of the minimum state. The foundations of a new economic governance have not been laid.

The BRICS [group] was the result of this paralysis and constitutes a strategic platform to promote cooperation between emerging countries. The recent expansion of the group at the Johannesburg Summit meeting strengthens the fight for an order which accommodates the economic, geographic and political plurality of the 21st century. We are a force that works towards fairer global trade in the context of a serious crisis in multilateralism. Rich countries’ protectionism has gained strength, and the World Trade Organization remains paralysed, especially its dispute settlement system.”

William Ruto, President of KENYA:
“Resorting to the pursuit of narrow, insular and antisocial agendas within exclusive clubs constituted to maintain the status quo that undermines and cannibalizes the United Nations system at the expense of progress in humanity’s collective journey to the future of our aspirations, is totally unacceptable…. The environment of pervasive mistrust – between the Global North versus South, developed versus the developing, rich versus poor, polluters versus victims and net emitters versus net victims – which complicates and frustrates multilateralism, is the inevitable result of promises not kept, commitments not actualized, resolutions not honoured, and principles not observed. Multilateralism has been failed by the abuse of trust, negligence and impunity.”

Marcelo Rebelo de Sousa, President of PORTUGAL:
“In an international order where some of its members are seeking to shift the balance of power, a sign of discontent with some of the existing rules, it is also important to re-evaluate the representation, scope and effectiveness of some financial organizations. As Secretary-General António Guterres said, ‘we need a new international financial architecture, a new Bretton Woods’. It is urgent to move forward along paths of respect for the values of the United Nations Charter, peace, sustainable development, climate action, correcting inequalities, reforming the United Nations and the world’s financial institutions.”

Macky Sall, President of SENEGAL:
“Senegal recognizes the valuable services that the United Nations system and that of Bretton Woods have provided to member countries for nearly eighty years. But we all know that the multilateral system, a legacy of a bygone past, has become obsolete. However, as Secretary-General António Guterres rightly warned, a system which continues to ignore the realities of its time and the needs of more than three quarters of its member countries, accentuates inequalities, generates the conditions for its challenge, and causes the risk of its fragmentation. If we want to avoid this divide, wisdom dictates that we reform global political, economic and financial governance, so that it is more representative of diversity, and thus reinforces its legitimacy…. The G20 showed this by admitting the African Union as a full member.”

Charles Michel, President of the EUROPEAN COUNCIL:
“The Bretton Woods system must be reformed in depth. More equitable, more inclusive and more efficient.… These institutions were created when many countries were still under colonial supervision. Since then, the world has changed. However, the G7 countries still hold almost all power there, absolute decision-making power. The European Union is ready to share power better, because the regions which have almost no say in the matter must be better involved in decisions that concern them….

Regional or continental organizations today play a growing role…. These organizations exert growing influence in the multilateral arena. They are essential contributors to stability. Their role must grow in the multilateral system, because they structure the multipolar world that we want. [Therefore,] the European Union has immediately supported the call of Senegalese President Macky Sall to include the African Union as a full member of the G20.”

Robert Dussey, Minister for Foreign Affairs of TOGO:
“Africa expects more equality, respect, equity and justice in its relations and partnerships with the rest of the world, with the major powers, whatever they may be. Today, Africans want to be true partners. In the concert of nations, Africa must be listened to for dialogue to have meaning. The lack of listening perverts the meaning of the dialogue, which turns into a juxtaposition of monologues and biased reasons…. Africa certainly does not have the same megaphones as the great powers of the world, but the voice of Africa counts and must count if we want to have Africa as a partner on major international issues…. Our allies cannot always expect unconditional support from the continent. Africa wants to cooperate with its allies on the basis of its well understood interests…. We want to be your partners, not your subjects. We want to serve our people and not serve foreign interests.”

Alicia Bárcena Ibarra, Minister of Foreign Affairs of MEXICO:
“Mexico seeks agreements on all issues on the multilateral agenda because we’re interested in reconciling positions without leaving anyone on the margins. But we’re living in unprecedented times which require greater will to come to the fore to give voices to all in the Global South. Mexico belongs to the Global South, indeed, through history and conviction. Consequently, Mexico is considering participating in the debates and work of G77 and China on those issues and in those fora in which we could contribute to strengthening the negotiating position of the Global South. Soon we will submit a proposal to G77 plus China for its consideration.”

Subrahmanyam Jaishankar, Minister for External Affairs of INDIA:
“Even as we encourage collective endeavours, India also seeks to promote cooperation with diverse partners…. It is visible in the rapid growth of the Quad, a mechanism today so relevant to the Indo-Pacific. It is equally apparent in the expansion of the BRICS grouping of independent-minded nations…. This willingness to work in an open-minded manner on specific domains is now a defining characteristic of the emerging multipolar order.”

Demeke Mekonnen Hassen, Deputy Prime Minister of ETHIOPIA:
“Ethiopia and other developing countries have also been advocating for the reform of the United Nations system as a whole. We call for a more inclusive and effective multilateral mechanism that works fairly for developing countries. The BRICS have championed this call. That is why Ethiopia is grateful to have been invited to join the group.”

Ranil Wickremesinghe, President of SRI LANKA:
“North-South divisions are widening with the digital divide, the financial and debt crisis and the energy transition. Contrary to the promise of 2030, today we are seeing levels of poverty and hunger not witnessed since decades. Neutral, nonaligned countries of the Global South such as Sri Lanka are once again constrained in-between new global power configurations. In numerous recent declarations in the UN and beyond including at the G20 in Delhi, at BRICS in Praetoria and G7 in Hiroshima, we have agreed that our challenges are interconnected, across borders and all other divides. We must grasp the opportunity to unite in order to build an inclusive future for future generations.”

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Reparatory Justice

Nana Akufo-Addo, President of GHANA:
“It is time to acknowledge openly that much of Europe and the United States have been built from the vast wealth harvested from the sweat, tears, blood and horrors of the trans-Atlantic Slave Trade and the centuries of colonial exploitation. Maybe we should also admit that it cannot be easy to build confident and prosperous societies from nations that, for centuries, had their natural resources looted and their peoples traded as commodities…. Reparations must be paid for the slave trade. No amount of money will ever make up for the horrors, but it would make the point that evil was perpetrated, that millions of productive Africans were snatched from the embrace of our continent, and put to work in the Americas and the Caribbean without compensation for their labour.”

Philip Joseph Pierre, Prime Minister of SAINT LUCIA:
“We feel ourselves obliged to seek justice, through reparations, for the crimes against humanity that tore our ancestors from our African homeland and enslaved them in the lands of the Western hemisphere…. Reparations for slavery mean that the countries which benefited and developed from four hundred years of free labour from enslaved humans should now pay back for that free labour.”

Cyril Ramaphosa, President of SOUTH AFRICA:
“Centuries after the end of the slave trade, decades after the end of the colonial exploitation of Africa’s resources, the people of our continent are once again bearing the cost of the industrialisation and development of the wealthy nations of the world. This is a price that the people of Africa are no longer prepared to pay. We urge global leaders to accelerate global decarbonisation while pursuing equality and shared prosperity.”

Mia Mottley, Prime Minister of BARBADOS:
“Reparative justice is a solemn obligation which we must confront, a conversation whose time has come…. It can’t be a slow conversation taken up when people feel like it. It has to be a conversation in which equal partners discuss, it cannot be an act of charity of those who feel their conscience must be cleansed.”

Eamon Courtenay, Minister of Foreign Affairs of BELIZE:
“The terrible injustice and the poisoned legacy of native genocide, slavery and the trans-Atlantic slave trade cannot continue to be ignored or to be the subject only of academic discussions. Descendants of slaves continue to struggle with persistent racial discrimination, marginalization and generational trauma…. Reparatory justice is essential to any redemption from a historical wrong that is so indelible that it can never be fully remedied but must be reckoned with.”

Gaston Alphonso Browne, Prime Minister of ANTIGUA AND BARBUDA:
“[C]limate justice and reparatory justice are deeply intertwined…. Historically, the nations that thrived on the industrial revolution, did so on the backs of enslaved and victimized generations from the Caribbean and other corners of the African diaspora. It is unjust that countries that paid the highest human price are bearing the heaviest climate burden…while legal routes to compensation may be complex, it by no means nullifies the moral and ethical obligations stemming from these historical wrongs. SIDS cannot sit idly, while our countries sink beneath our feet or are crippled by a burden of debt, as we are left – abandoned by the international system – to rebuild within our own limited means, one disaster after another.”

Bola Ahmed Tinubu, President of NIGERIA:
“Today and for several decades, Africa has been asking for the same level of political commitment and devotion of resources that described the Marshall Plan. We realize that underlying conditions and causes of the economic challenges facing today’s Africa are significantly different from those of post war Europe. We are not asking for identical programs and actions. What we seek is an equally firm commitment to partnership. We seek enhanced international cooperation with African nations to achieve the 2030 Agenda and Sustainable Development Goals.”

Frederick Audley Mitchell, Minister for Foreign Affairs of BAHAMAS:
“[I]t was shocking to hear one of our developed nation partners’ position on climate reparations for loss and damage by his country. Their response was that under no circumstances would there be reparations for the loss and damage from climate change…. Millions of African peoples were ripped from the continent of Africa brought to the west and worked for free for 200 years…. Yet not one penny was paid to the slaves or to their descendants. Not even an apology is being offered for the moral tragedy which slavery represents.”

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International Financial Architecture reform for equitable governance and financing

Cyril Ramaphosa, President of SOUTH AFRICA:
“To address the developmental challenges that face many people in the world, we require targeted investment, technology transfer and capacity building support, especially in key areas such as industrialization, infrastructure, agriculture, water, energy, education and health. This also requires predictable and sustained financial support, including supportive trade policies, from the international community. We call on our partners from wealthier countries to meet [their] financial commitments [including] undertakings to mobilize US$100 billion a year for developing economies to take climate action. We support the proposals outlined in the Secretary-General’s Sustainable Development Goals Stimulus. In particular, we support the call to tackle debt and debt distress, to massively scale up affordable long-term financing to US$500 billion a year, and to expand contingency financing to countries in need.”

Ranil Wickremesinghe, President of SRI LANKA:
“National efforts alone will not suffice to ensure the success of the SDGs and reverse climate change. The need for global solidarity to restructure the international financial architecture is paramount. This is articulated loud and clear in multiple global fora including in G7, G20, and the BRICS. The Secretary-General’s SDG Stimulus highlights the interconnections between the achievement of the SDGs, combating climate change and the concrete interventions required by creditors sovereign and private, as well as by International Financial Institutions (IFIs) including to mitigate the debt crisis.”

Anwaar-ul-Haq Kakar, Prime Minister of PAKISTAN:
“At yesterday’s SDG Summit, far-reaching commitments were made to implement the Sustainable Development Goals. We must ensure implementation of the ‘SDG Stimulus’; the re-channelling of unused Special Drawing Rights for development; the expansion of concessional lending by the Multilateral Development Banks; and the resolution of the debt problems of the 59 countries in debt distress.”

Saleumxay Kommasith, Deputy Prime Minister of LAO PEOPLE’S DEMOCRATIC REPUBLIC:
“Let me quote the call by the UN Secretary-General Guterres: ‘the Global Financial System is biased, morally bankrupt and skewed to benefit wealthy countries’ end of quote. This is a clear signal that the reform of the international financial architecture is an urgent and long-overdue task, and this cannot be done without strengthening the participation of developing countries in international economic decision- making, norm-setting and global economic governance, in order to adapt to the changing global economic landscape.”

Alicia Bárcena Ibarra, Minister of Foreign Affairs of MEXICO:
“Estimates of the costs of the effects of climate change demonstrate that it will not only affect economic growth, but it will also affect the most vulnerable sectors of our societies. …we emphasize the importance of having financing in place to tackle climate change and of giving priority to adaptation in particular, and especially to support the most vulnerable nations in our region, the Caribbean, first and foremost…. We are championing wholesale reform of the international financial architecture. This reform must address the deeply rooted asymmetries between countries. It must prioritize highly, heavily indebted countries with new instruments, with the redistribution of Special Drawing Rights to widen the fiscal space of developing nations. It should also prioritize debt relief in exchange for environmental services, debt for climate swaps.”

William Ruto, President of KENYA:
“The entire system of risk assessment and the opaque methodologies employed by credit rating agencies and risk analysis needs to be overhauled. We must all recall the miscalculation of subprime mortgage risk by these agencies two decades ago, which precipitated a financial crisis whose effects reverberate to date…any objective rating must also take into account principles of responsible sovereign lending and accounting, specifically emphasizing the need for international accounting systems that supports the proper valuation of mineral wealth, natural capital and ecosystem services, in the computation of national GDPs.”

Paul Kagame, President of RWANDA:
“Developing countries are constrained by a debt crisis, including higher costs of borrowing. This is causing economic disparities to widen, and slowing down our collective progress towards the Sustainable Development Goals. The primary cause of this crisis is high interest rates in developed economies, in order to correct for years of quantitative easing. At the same time, developing countries face exaggerated risk premiums for both currency and political risk, which are simply unjustified…. Increasing access to finance also requires reform of our global financial institutions.”

Gustavo Petro, President of COLOMBIA:
“Governments and powers who still believe that the climate crisis and that of life can be overcome with cheap loans are mistaken. They are deluded to propose that those countries of the Earth, which are already indebted, are indebted as a result of disease and greed, and that they can use more loans to overcome a problem that only the belching chimneys of the North have produced. It is not possible to overcome the crisis of life, this mega crisis with more indebtedness….

The majority of the investment to decarbonize the world’s economy should come from public funds, …interlinking states and societies and planning for the great Marshall Plan of the revitalization of the planet. The market will help us somewhat, but we cannot ask for solutions from a mechanism which has no humanity, when it was this mechanism which produced the very problem. Private funds can be used, but they will be limited by their own logic. The force to do this will come from public funds, and these funds are currently weakened by debt.”

Spotlight on the Loss and Damage Fund:

The climate crisis is one of the biggest challenges facing developing countries; speakers across regions emphasized the urgency to operationalize the Loss and Damage Fund agreed at COP 27.

Gaston Alphonso Browne, Prime Minister of ANTIGUA AND BARBUDA:
“Now we must insist at COP28, that the Loss and Damage Fund must be made operational and adequately funded. It must also provide sufficient financing to help SIDS withstand the inevitable ruin that the actions of the major polluters are continuing to wreak. If COP28 fails in this critical mission, it risks undermining global trust, potentially sabotaging cooperative efforts on myriad global challenges.”

Fiamē Naomi Mata’afa, Prime Minister of SAMOA:
“Our expectations for the upcoming COP 28 in the UAE include crystallized commitments to bring about our envisioned ‘reality’. In particular, we wish to highlight the importance of operationalizing the Loss and Damage Fund as quickly as possible. For all AOSIS members, maintaining global temperatures below 1.5℃ is a point of no return. Crossing this threshold spells the end of many of our island societies.”

Anwaar-ul-Haq Kakar, Prime Minister of PAKISTAN:
“Pakistan also looks forward to the fulfillment of the climate change commitments made by the developed world: to provide over US$100 billion in annual climate finance; allocate at least half of such finance for adaptation in developing countries; operationalize the funding arrangements for Loss and Damage; and accelerate their carbon emission mitigation targets to ‘keep alive’ the goal of restricting global warming to 1.5 degrees centigrade. Attempts to selectively provide these funds on the basis of geopolitical considerations should be resisted.”

Miguel Díaz-Canel, President of CUBA:
“[I]t is profoundly disappointing that the goal of mobilizing no less than US$100 billion a year up to 2020 as climate financing has never been met. On the eve of the 28th COP, the G77 countries will have as a priority the exercise of the global balance, the implementation of the Loss and Damage Fund, the definition of the framework for the adaptation goal and the establishment of the new climate financing goal, which fully abides by the principle of common but differentiated responsibilities. The G77 is convening a summit of leaders of the South to be held on the 2nd of December, in the context of COP 28 in Dubai.”

Tandi Dorji, Minister for Foreign Affairs of BHUTAN:
“While welcoming the breakthrough agreement to provide Loss and Damage funding for vulnerable countries on the frontline of the climate crisis during COP 27, we are hopeful that progress will be made and that it will be operationalized by COP 28. In addition, we need to mobilize new and additional climate financing while ensuring balance between financing for mitigation and adaptation.”

Lazarus McCarthy Chakwera, President of MALAWI:
“We need decision and action on the climate financing that has thus far been nothing more than a promissory note from the developed countries responsible for resourcing our efforts for mitigation, adaptation, and most urgently, Loss and Damage. We need decision and action on debt, for like most Least Developed Countries, Malawi is in distress because its debt is unsustainable, and so our call to action on behalf of all LDCs on this matter remains the same: Cancel the Debts! Cancel the Debts! Cancel the Debts!”

Leo Varadkar, Taoiseach of IRELAND:
“Earlier this year, the UN Secretary-General spoke of the world ‘hurtling towards a disaster, with eyes wide open’. We know that it is those who have done least to cause the climate crisis that are the most vulnerable to its effects. It is also clear that much of this is irreversible, particularly in Least Developed Countries and Small Island Developing States. In responding to this crisis, we cannot leave behind those who are already at the frontline. Adequate levels of finance for adaptation are urgently needed. And it is essential that the discussions this week on the Loss and Damage Fund make real progress. We need to be ready to take a definitive step at COP 28 in Dubai later this year.”

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The GPW Team in collaboration with students from Julien J. Studley Graduate Programs in International Affairs at The New School.

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The UN ECOSOC High-level Political Forum on Sustainable Development (HLPF), operating under the auspices of the Economic and Social Council (ECOSOC), has convened regularly since it was established by the 2012 United Nations Conference on Sustainable Development (Rio+20). It is a means for Member States, the UN System and Major Groups and Other Stakeholders to assess progress on the Sustainable Development Goals (SDGs).

In 2023, the HLPF took place from 10 – 19 July, and the main SDGs subjected to in-depth review were SDG 6 on clean water and sanitation, SDG 7 on affordable and clean energy, SDG 9 on industry, innovation and infrastructure, SDG 11 on sustainable cities and communities and SDG 17 on partnerships for the Goals.

The HLPF sessions covered a range of themes, including “Accelerating the recovery from the coronavirus disease (COVID-19) and the full implementation of the 2030 Agenda for Sustainable Development at all levels,” dedicated to addressing progress and challenges distinctive to Middle Income Countries (MICs), Least Developed Countries (LDCs), and Small Island Developing States (SIDS). This briefing contains perspectives articulated by Member State representatives, UN entities, think tanks and CSOs.

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Addressing the debt crisis and its hindrance to SDG implementation

Kenya: “At the midway point to 2030, many Middle-Income Countries are still burdened with unsustainable debt which reduces our ability to invest in SDGs. Poverty and hunger have worsened in many MICs and income-generating opportunities at a national household and individual levels have been lost…. The SDGs financing gap in the MICs has significantly widened. It has not only reversed the gains towards the SDGs but has also deepened their pre-existing vulnerabilities. In addition, loans to MICs have become very expensive, limiting access to development financing for maximization of various means of SDG implementation, to inform quick wins. Therefore, Kenya calls for strengthening of international government cooperation, fair trade policies by developed countries, and actualization of the UN Secretary-General SDG Stimulus.”

Malawi: “Being a Landlocked Least Developed Country, Malawi recognizes the need for transformative solutions to regain the lost gains caused by increased frequence and magnitude of climate induced disasters, geopolitical tensions and the COVID-19 pandemic. We acknowledge that debt restructuring will go a long way in helping African countries and Least Developed Countries to get back on track on the road to SDGs. While recognizing the propensity of crisis going forward, we acknowledge the need for increased support for LDCs and LLDCs to recover from the devastating impacts of the manifested crisis and build resilience for our economies…. We redirect the calls for a quick debt restructuring agreement for LLDCs and African countries as one of the urgently needed actions to change our fate.”

Philippines: “The most pressing issue [to MICs] in our SDG implementation is tight fiscal space and high external debt. As debt distress and risks increase across the world, most MICs were and are faced with the choice between development aspirations and fiscal stability. The COVID-19 pandemic, global political tensions and conflicts, adverse impacts of climate change and disruptions in food supply have also constrained countries’ resources to address overlapping challenges”.

ESCWA, Executive Secretary: Our world is only as resilient as our most indebted nation; the burden of MICs is not just their problem but a challenge for all of us, a threat to global economic resilience. It’s a call for the global community to come together to assist but also to learn and to ensure a fair and equitable and prosperous world…. The debt crisis afflicting MICs, especially those in the Arab region, isn’t simply a figure on a balance sheet. It represents a human cost, a socioeconomic upheaval affecting the livelihoods of millions. It’s not confined within national borders, it sends shock waves through an interconnected world, destabilizing global economic resilience and shared prosperity if not addressed.”

UN Secretary-General’s proposal for an SDG Stimulus

“The SDG Stimulus aims to offset challenging market conditions faced by developing countries and accelerate progress towards the SDGs, including through investments in renewable energy, universal social protection, decent job creation, healthcare, quality education, sustainable food systems, urban infrastructure, and digital transformation. The SDG Stimulus addresses both short-term urgencies and the need for long-term sustainable development finance. It calls for a significant increase in financing for sustainable development, to the tune of at least US$500 billion per year, to be delivered through a combination of concessional and non-concessional finance in a mutually reinforcing way.”

The SDG Stimulus puts forward three areas for immediate action:

1. Tackle the high cost of debt and rising risks of debt distress, including by converting short-term high interest borrowing into long-term (more than 30 year) debt at lower interest rates.
2. Massively scale up affordable long-term financing for development, especially through public development banks (PDBs), including multilateral development banks (MDBs), and by aligning all financing flows with the SDGs.
3. Expand contingency financing to countries in need.

Reforming the International Financial Architecture is urgent

Zambia: “Achieving SDGs in African countries, the LDCs and LLDCs against the backdrop of multiple and interlinked crises requires renewed and strengthened commitment among all partners, including the private sector, civil society and governments. We note in the 2023 SDGs report that only 12% of the SDGs are on track, more than 50% of the progress is uneven, and 37% have stalled and regressed. Countries in special situations, particularly LDCs and LLDCs, most of which are in Africa, are the hardest hit. To regain this lost ground and get back on the path to rescuing the SDGs, governments need to invest in building resilience and leveraging the power of science, technology and innovation which has potential to catalyse progress towards attainment of the SDGs. To accelerate recovery, we support calls for reform of the international financial architecture and the need for development finance to flow where it is most needed. The Secretary-General’s proposal for an SDG Stimulus package of at least US$500 billion per annum will offset unfavourable financing conditions faced by countries in special situations and support investments in critical sectors such as renewable energy, social protection, healthcare, quality education, food security systems, resilient infrastructure, and information technology.”

Indonesia: “It is pertinent that the international community work together to support African countries, LDCs and LLDCs in responding to the crisis, advancing recovery and progress in [SDG] achievement…. First, reforming the international financial architecture can provide African countries, LDCs and LLDCs with improved access to financial resources, enhanced financial stability and support the implementation of policies and initiatives outlined in Africa’s Agenda 2063, Doha Programme of Action and the Vienna Programme of Action. With the current conditions it is also crucial to support countries in managing their debt through the initiatives, the restructuring and sustainability management strategies which can better allocate fiscal space and promote long-term economic stability.”

Lao People’s Democratic Republic: “The Lao PDR as both an LDC and LLDC has been severely affected by the multi-faceted challenges with further increased pre-existing economic vulnerabilities and widened the gap between financial resources available and development needs. Also, the implementation of the Istanbul Programme of Action for LDCs and the current Vienna Programme of Action for LLDCs as integrated into our National development plan has made some progress. It is still uneven… we look forward to the new Programme of Action for LLDCs next year, as continuous efforts to address geographical challenges and transform our country from being landlocked to land linked and regional logistic hub.”

Honduras: “As a low-middle income country, it is increasingly difficult to get access to financing and resources. We must remember that economic deceleration in 2020 did little to stop the climate crisis which continues to a large extent without hesitation. We are one of the most vulnerable countries to that phenomenon, year after year we face the damage from hurricanes and tropical storms, leading us to fall back on our progress and many communities have to be moved entirely. However, our government under President Xiomara Castro is investing in measures to boost resilience in the face of natural disasters and in the deep-rooted fight against corruption, one of our priorities in our national plan.”

Guatemala: “It is important to observe structural problems which have a significant impact on a country’s development process. According to data provided by the World Bank, 70% of the world’s countries are in the middle-income classification, but it would be wrong to consider that they are all homogeneous in terms of conditions of these countries just because they’re part of this classification.”

Center for Sustainable Development, Brookings, Senior Fellow: “MICs have suffered a large shock as a result of the pandemic. GDP this year and next year is going to be 8.6% below what it was expected to be [in 2019]. Growth is now expected to be something like 3.4 per year, not too far off the pre-COVID trend but the level of income will not recover to the previous path…. Advanced economies suffered a temporary shock but have now recovered while developing countries have suffered a seemingly permanent shock…. Without accelerating economic growth, there is little hope that MICs will make serious progress towards the SDGs…. On average, the private and public sectors in MICs should be spending about 5-10% of GDP, more on energy transitions, land use system change, adaptation and resilience, nature preservation and human capital, amounting to some US$2.7 trillion more than in 2019, even when excluding China…. There are many obstacles that currently prevent such investments…, and among the most important are the lack of fiscal space and the high cost of capital faced by MICs, whose creditworthiness has deteriorated in the aftermath of COVID-19…. Without access to long-term capital at affordable interest rates, MICs will not find it economically viable to undertake the large transformations in energy and landfill systems that are needed.”

University of Johannesburg, South Africa, Research Chair in Industrial Development: “The development and prosperity of MICs matter, not only because they account for three fourths of the world’s population and most of the world’s poor, but also because of their strong links with LDCs – through trade, investment, remittances and other channels – affecting development outcomes in LDCs as well.”

Education and Academia Stakeholder Group (EASG): “We would all agree that the challenges of the MICs are many and varied; this is so because often, how countries are measured and classified does not reflect the reality of the countries. Many MICs struggle with financial gaps or limited resources due in part to the colonial structure of financing mechanisms. They have seriously constrained budgets and limited access to resources…. This calls for mobilization of resources, different financial mechanisms, but we caution that it is important to consider the consequences of the mechanisms used.”

Strengthening international cooperation: Financing for Sustainable Development

Indonesia: “MICs face various barriers and challenges in implementing the SDGs…. First, the status of MICs, neither low- nor high-income countries, has put them in paradoxical situations where they experience a decline in development assistance even though they continue to face significant development challenges. Hence, international cooperation and innovative financing mechanisms are needed. This includes increasing official development assistance (ODA) to MICs, encouraging private investment and partnership for knowledge sharing and resource mobilization. Secondly, to address the high levels of inequality and social disparities in MICs, policies and programmes should focus on inclusive growth, poverty reduction and social protection measures. Targeted interventions that address specific needs of vulnerable groups should be prioritized. Next, strengthening institutional capacity and governance is crucial…. MICs need to improve policy coherence, coordination mechanisms and data collection systems. Enhancing transparency, accountability and participation can help ensure effective implementation and monitoring of SDGs”.

Denmark: “1.1 billion people live in LDCs and they account for merely 4% of global greenhouse gas emissions. There’s nothing fair about the fact they are first to suffer from the climate crisis and it’s not right that around 65% of people living in LDCs still lack access to electricity. We need to ensure energy for all, and ultimately, renewable energy is the only route to sustainable development. An investment in fossil fuels is an investment in a dying business. Saving the climate and ensuring development are not competing agendas. As a global community working to secure a just green transition in LDCs and LLDCs should be a top priority and just includes safeguarding the rights and empowerment of women and girls. But for this to happen, more financing for development must be mobilized.”

Armenia: “The LLDCs, like Armenia, face additional challenges, including transport connectivity and access to the foreign markets. To overcome this constraint, we attach special importance to the advancement of information, communication technologies, and digitalization of the economy…. The UN system and international financial institutions have an important role in supporting MICs to a whole of system approach by facilitating access to concessional financing through technology transfer and capacity building.”

Algeria: “In order to support MICs to overcome challenges, … it is crucial to identify ways and means to ensure inclusive, resilient and sustainable recovery, particularly through scaling up the source of multilateral development banks and extending the eligibility of MICs to concessional finance.”

ESCWA, Executive Secretary: “The share of concessional borrowing from official bilateral and multilateral creditors is declining, and MICs are increasingly turning to private creditors, heightening risk exposure and debt servicing costs… over half of the revenue is consumed by interest payments rather than spending these funds in improving citizens’ wellbeing and investing in crucial public services”.

Center for Sustainable Development, Brookings, Senior Fellow: “MICs will need significant international support to undertake the investments needed to make progress on the SDGs. They cannot rely on private capital markets alone.”

University of Johannesburg, South Africa, Research Chair in Industrial Development: “Progress on SDGs in MICs is essential for progress and achievement for the SDGs in the world as a whole. Yet MICs remain stuck in …what we might call a middle-income gap where they may be neglected in policy attention and financing…. Structural transformation refers to a shift in economies towards higher productivity sectors and activities with a particular link to industrialization. This is essential for closing the gap, catching up and graduating with momentum…. For MICs, there is an importance of concerted policy efforts, including deepening innovation, strengthening firm-level capabilities, and pushing forward upgrading, diversification and inclusive and sustainable industrial development. This includes taking risks, learning from mistakes and ensuring that policies on paper are implemented in practice. For advanced economies, there’s importance in enabling access to technology and genuine technology transfers as well as access to finance including going beyond soft loans to significant net transfers of resources to support the green transition and access of MICs to the market economies including through lowered trade barriers both tariffs and non-tariff barriers.”

Investing in People: Bridging Gaps in Social Protection

Rwanda: “Regarding the Doha Programme of Action for LDCs, we want to reemphasize points like promoting sustainable investment through prioritizing sustainable and inclusive investment, particularly in … agriculture, manufacturing and services. Also, enhancing technology transfer and digital literacy [and] improving access to quality education…. Regarding potential solutions to crisis response, we want to echo the points related to promoting green recovery and boosting health infrastructure through investing in improving crisis response capabilities and ensuring universal health coverage.”

Indonesia: “[We must] strengthen technical assistance and capacity building especially in human development. People, in particular youth and working age population are critical assets to building resilience and advancing the 2030 Agenda. Investing in people could also enhance accountability to design and implement effective development strategies and policies in the future. Last is to promote technology, enhance competitiveness, and foster sustainable development including through a technology transfer agreement, South-South cooperation.”

EASG: “Many MICs face issues of poverty, coupled with high levels of socio-economic inequality that threaten the Sustainable Development Goals. Governments need to develop policies to address these issues. Central …is the implementation of policies to improve access to education for all at all levels, including adult education especially for vulnerable groups. Very often these countries lack democratic governments, transparency, effective governing mechanisms, participation of civil society and social dialogue [and] face corruption and weak institutions which make progress very difficult. It is important therefore to have transparency and accountability, anti-corruption measures, strengthening institutions, promoting good governance practices and engaging civil society.”

Workers and Trade Unions Major Group: “We have to strengthen structural changes in our countries and create jobs that are decent with necessary income. The guarantee of a decent job is linked to more added value and necessary social protection that is better adapted to need. We need to diversify production systems to reduce dependence on imports in key sectors such as energy and food, as well as policies to decarbonize industry and increase the value of exports and primary products. These policies have to be created and put in place. That requires digitalization, investment, technological innovation and the building up of skills and learning throughout life. Investment to be increased in public infrastructure, roads, transport, building, machinery and other forms of equipment, all with a limited environmental impact. We also have to make progress in bolstering industry and industrial employment as well as fair industrial transformation processes.”

Children and Youth Major Group: “Youth represents more than 60% of the African population; in more decades we expect an increase. As a youth constituency, we call for investment in youth, access to quality education, and providing decent employment; a convenient environment for youth entrepreneurship across Africa and LDCs that provide sufficient funding to innovative young entrepreneurs with an efficient system to register businesses across the globe; ensure structured intensive programmes that provide young people necessary skills to make them employable or relevant in the workplace; improve resilience to future pandemics and disasters such as cyclones through adequate investment in infrastructure and health services; invest in energy to ensure progress on the Doha Programme of Action and especially STEM to bridge the gap of poverty among the LDCs; ensure youth are seen as key stakeholders in policy making, implementation, monitoring, and evaluation of the SDGs; and ensure meaningful youth participation and of internally displaced persons with disabilities.”

Right Energy Partnership with Indigenous Peoples in Malaysia, Executive Director (representing the Major Groups and Other Stakeholders): “NGOs that work directly with these underdeveloped communities play a vital role in implementing grassroots programmes, raising awareness and advocating for the rights and wellbeing of indigenous peoples and other vulnerable groups. Direct financing to these organizations enables them to scale up efforts and reach more committees in need…. Given the limited availability of foreign development grants, MICs must prioritize the needs of indigenous peoples and marginalized communities. This requires domestic resources, mobilization to progressive taxation, revenue collection, and investments in local industries….”

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The discussions on common challenges faced by MICs, LDCs and LLDCs in their pursuit of the SDGs shed light on a recurring theme: the urgent need for reform of the international financial architecture to enable better financing for development, including concessional financing, equitable debt management strategies, and support for critical development policy initiatives that ensures social protection.

Attention was brought to the multidimensional vulnerabilities of MICs, LDCs and LLDCs that require a more equitable and inclusive global governance framework instead of the current disparities in fiscal space and global economic governance that inhibit progress on the SDGs. Whether these issues are meaningfully addressed will be key at the SDG Summit on 18 – 19 September. (See GPW Fact Sheet #2 for more on the SDG Summit.)

The post ECOSOC HLPF on Sustainable Development 2023: Perspectives, Priorities and Positions appeared first on Global Policy Watch.

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At the half-way mark to fulfilling the 2030 Agenda for Sustainable Development, the UN “SDG Summit” is charged with igniting a correction course as the UN, Member States and numerous studies agree that the Sustainable Development Goals (SDGs) are seriously off-track and the consequences of failure affect all countries and sectors of society. Key themes include: the SDG Stimulus, debt restructuring, international financial architecture reform, re-channeling of Special Drawing Rights amongst other issues.

Global Policy Watch’s factsheet highlights the significance, programme, events and Political Declaration of the Summit and includes relevant links and documents for further exploration.

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A key theme for the High-Level Political Forum (HLPF), 10-20 July 2023, was the issue of the current international financial architecture (IFA) that disproportionality disservices low and middle-income countries.

Reforms to IFA, tackling debt difficulties for vulnerable countries, the SDG Stimulus, and references to SDG Summit, Summit of the Future and Summit for a New Global Financing Pact were highlighted by various Member States and other stakeholders at the HLPF and at the Summit for a New Global Financing Pact in Paris (22-23 June 2023).

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GPW Fact Sheet on UN General Assembly High-Level Week

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This GPW Round Up #6 – 2023 ECOSOC Operational Activities for Development Segment: Financing for effective UN Development System & Country Teams – features a selection of perspectives from the sessions held in May 2023.

Sustainable Development is one of the three pillars of the United Nations, yet the recent Global Sustainable Development Report (GSDR) and the consensus from the recently concluded High-Level Political Forum highlighted the dangerous lack of progress on the 2030 Agenda for Sustainable Development and the Sustainable Development Goals.

The ECOSOC Operational Activities for Development Segment addressed ways to improve the effectiveness of the UN Development System, including focus areas such as the UN Resident Coordinators system and UN Country Teams. Many Member States and UN resident coordinators identified deficient funding as a main challenge to securing results on sustainable development.

This Round Up #6 features statements from Member States and UN agencies, including UN resident coordinators in countries. The selection highlights difficulties faced by country teams, as well as some good practices from coordination between country teams and Member States.

This Round Up has been prepared by GPF in collaboration with students from Julien J. Studley Graduate Programs in International Affairs at The New School.

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This GPW Round Up – 5th UN Conference on Least Developed Countries (LDC5): Highlights from High-Level Roundtable discussions at LDC5 – features a selection of perspectives from different groups of participants at the LDC5 Conference held in March 2023.

LDC5 was the first major high-level event of 2023, a crucial year of decision-making at UN headquarters. Deputy Secretary-General Amina Mohammed said that “the 2030 Agenda will fail if we fail least developed countries”. The principle of Leaving No One Behind is being tested as the negative impacts of delayed progress on the implementation of SDGs are compounded in LDCs. The conference itself had to be held in two parts due to the COVID-19 pandemic, a reminder of the external vulnerabilities every country faces, and especially damaging to LDCs. The Doha Programme of Action (DPoA) was adopted at UN headquarters in March 2022 and the main conference held in Doha, Qatar in March 2023.

According to the Secretary-General, some of whose conference remarks are included in the Round Up, the September 18-19 SDG Summit is the “centrepiece moment to demonstrate a global commitment for action”. Ground-breaking commitments made at the Summit will have multiple benefits including for the implementation of the Doha Programme of Action for LDCs.

This Round Up #5 features statements from Member States, UN agencies, and intergovernmental organizations, as well as from the CSOs. The selection is focused on the economic and sustainable develoment challenges in LDCs, with emphasis on the systemic hindrances and the difficult path to graduation from the LDC category.

This Round Up has been prepared by GPF in collaboration with students from Julien J. Studley Graduate Programs in International Affairs at The New School.

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