19 January 2023 04:22 pm
The United Nations called on global economies to step up in preventing the deepening of the North-South, East-West divide, and avoid a 21st century sequel to the ‘Thucydides Trap’.
United Nations Secretary General António Guterres asserted that he is not convinced that the wealthier world truly grasps the degree of frustration and anger in the Global South.
Delivering a special address at the World Economic Forum Annual Meetings this week, Guterres pointed out there is growing frustrations and anger about; the gross inequity of vaccine distribution; the pandemic recovery – with support overwhelmingly concentrated in wealthier countries that could print money; a climate crisis that is crippling countries that contributed least to global heating; and a morally bankrupt financial system in which systemic inequalities are amplifying societal inequalities
“A system that routinely denies debt relief and concessional financing to vulnerable middle-income countries in desperate need. A system in which most of the world’s poorest countries saw their debt service payments skyrocket by 35 percent in the last year alone.
“We need to bridge all these divides and restore trust,” he said.
In an effort to iron out prevailing issues, he stressed the need for reforming and building fairness into the global financial system, in which developing countries need access to finance to reduce poverty and hunger and advance the Sustainable Development Goals.
The UN higher official urged the G20 to agree on a global SDG Stimulus Plan that will provide support to countries of the Global South – including vulnerable middle-income ones.
The middle income nations are in need of the necessary liquidity, debt relief and restructuring – as well as long-term lending – to invest in sustainable development. In other words, the world needs a new debt architecture.
Multilateral Development Banks must change their business model,” he said.
“There are no perfect solutions in a perfect storm. But we can work to control the damage and seize opportunities.