Statement on behalf of G-77 and China, by Dalia Torres, Third Secretary, Permanent Mission of Cuba to United Nations, on agenda items 16 and 17: Macroeconomic policy questions and Financing for Development at the Second Committee of the General Assembly.

New York, 5 October 2023

Mr. Chair,

I have the honor to deliver this statement on agenda item 16 and 17 on behalf of the G77 and China.                      

The Group expects to have serious discussions under these agenda items taking into account the huge setbacks in attainment of the Sustainable Development Goals and in particular in the fight against poverty and hunger as a result of the compounding crisis which we are facing today, the impacts of the Covid-19 pandemic and the significant decline in multilateral international cooperation for development, especially in the provision of development financing and technology cooperation. All of these have produced severe shocks to developing countries’ economies.

The persistent socio-economic consequences of the COVID-19 pandemic, geopolitical tensions, continued global tightening of monetary policy, unilateral coercive measures, the adverse effects of climate change, to mention a few, have exacerbated challenges for developing countries.

The current international financial architecture has failed to deliver financing and stability needed to achieve the SDGs. This architecture designed in 1945 to safeguard the stability of the global monetary and financial system was negotiated in the absence of the majority of developing countries which were then still under colonial occupation.

Over the past decades, the inequality of these arrangements has become visible. In all sectors, the gap between developed and developing countries has become wider. Most developing countries have been unable to scale up public finance and investment, owing to limited fiscal space and a lack of access to affordable long-term financing. Borrowing space is also limited. As noted in the Financing for Sustainable Development Report 2023, 52 developing countries face severe debt problems.

The Group emphasizes that numerous efforts have been made to reform the imbalances of those arrangements and to bring inclusivity, especially at the UN and its related organizations, like UNCTAD.

An example of those efforts is the proposals for a New International Economic Order that were adopted by the UN General Assembly. However, today there is still a need for stronger political will to establish a fair, just and equitable international economic order.

The current crisis requires urgent actions, not promises and empty speeches.

First, we need to seize the momentum and reform the international financial architecture. The responses that developing countries need go beyond the capacities of the existing multilateral and international financial institutions like the IMF and the World Bank.

The ongoing sixteenth general review of quotas of the IMF provides an opportunity to meet the commitments in the Addis Ababa Action Agenda to strengthen the voice and representation of developing countries. If the largest developed economies continue to hold de facto veto powers in the decision-making bodies of these institutions, there won't ever be an inclusive international system.

We also need to take urgent actions such as a comprehensive review of the IMF surcharge policy due to its regressive and pro-cyclical character.

The United Nations provides a universal, inclusive and legitimate forum for addressing these challenges. Its unique situation needs to be used as a platform to advance the reforms to the international architecture.

Second, an improved global sovereign debt architecture with meaningful participation of developing countries cannot be postponed any longer. In 2022, 25 developing countries dedicated more than a fifth of their total revenue to servicing external public debt which constrained their ability to invest in recovery and sustainable development, and raised the risk of future debt crises.

Third, financing for development continues to be the key for implementing the SDGs. Therefore, we urge developed countries to fulfill their unmet ODA commitments to developing countries to achieve the target of 0.7 % of gross national income and 0.15 to 0.20 % of ODA to the least developed countries. The current crises should not be used as an excuse to slow down or go back on the obligations and commitments of our developed partners towards the developing countries.

Fourth, the voluntary rechanneling of unutilized Special Drawing Rights (SDRs) to developing countries and a new allocation of SDRs needs to be implemented and a mechanism that allows for a more automated process for issuing special drawing rights should be considered. As indicated in the SG's Report, it took 11 months for the Board of Governors of IMF to agree on a new special drawing rights issuance following the onset of the 2008 global financial crisis, and 17 months following the COVID-19 outbreak. A smooth SDRs rechanneling mechanism is, therefore, urgently required.

Fifth, it is imperative to materialize the mobilization of resources by developed countries to tackle climate change. It is deeply disappointing that the goal to mobilize 100 billion dollars by developed countries per year up to 2020 was never met. We sincerely hope that this goal would be met this year for the first time, as announced at the G20 New Delhi Summit in September.

We also expect developed countries do not fail to comply with their new financing commitments under the Kunming-Montreal Global Biodiversity Framework. Given the significant financing gaps in both the climate and the biodiversity agendas.

Sixth, the UN Secretary-General’s proposal for an “SDG Stimulus” for developing countries, in particular the most in need and distressed countries, could alleviate their economies and accelerate the recovery process towards the implementation of the SDGs. In this regard, we call upon the international community to follow up and support the SG’s “SDG Stimulus” proposal.

Seventh, we express our deep concern that there is still no single global inclusive forum for international tax cooperation at the intergovernmental level. We insist on the need for inclusive and effective platforms to design and discuss international tax rules and norms at the UN.

Eight, it is important to advance in the establishment of the set of measures of progress on sustainable development that complement or go beyond gross domestic product to inform access to concessional finance and technical cooperation by developing countries through a UN-led intergovernmental process in consultation with all relevant stakeholders, which will also require increased investment in national statistical systems, in data collection, and in capacity building for national statistical agencies.

Ninth, The Group remains deeply concerned and rejects the increasing trend by developed countries to impose unilateral and protectionist measures that undermine the multilateral trading system and negatively impact the access of developing countries' exports to the global markets.

The imposition of unilateral coercive economic measures against developing countries, which are inconsistent with the principles of international law and the Charter of the United Nations, does not contribute to economic and social development, including dialogue and understanding among countries, and impede the capacity of targeted countries to promote post-pandemic recovery. Therefore, we reiterate the urgent need to eliminate them immediately.

Mr. Chair,

Without urgent policy changes and concrete actions, the gaps between developed countries and developing countries threatens to become a vicious circle, with the financing divide limiting countries’ ability to invest in the SDGs and their resilience, making them in turn more vulnerable to external shocks.

Thank you.