Overall, the UN Sustainable Development Goals (SDGs) can be accomplished by 2030, under the condition that political schemes changes the rules of international economics and adopt policies that scale up the resources needed for a big investment push led by the public sector.
The report discusses the importance of the 'green' investment push, the Global Green New Deal, recasting the Depression era’s signature policy on a global scale with the potential of generating income and employment growth to solve the global financial crisis. The report casts doubt on proposals to finance the SDGs by maximizing development finance through blending public and private sources using products and techniques taken from the playbook of banking conglomerates. These have routinely failed to boost productive investment and were instrumental in the boom-bust cycle that led to the 2008 global financial crisis.
The global economy does not serve all people equally. Under the current configuration of policies, rules, market dynamics and corporate power, economic gaps are likely to increase and environmental degradation intensify.
... Richard Kozul-Wright, director of UNCTAD’s division responsible for the report.
The report presents a path leading to growth rates of GDP in developed economies of 1% to 1.5% above those generated by current patterns of global demand. For developing economies, excluding China, the gains will be larger, ranging between 1.5% and 2% per annum, but more moderate in China.
In addition, as the report notes, climate change is urgent and has to be supported by effective industrial policies, with targeted subsidies, tax incentives, loans and guarantees, as well as accelerated investments in research, development and technology adaptation.
Moreover, the report discusses ways to extinguish poverty, and meet nutrition, health and education goals will impose unsustainable financial burdens on many developing countries, requiring deeper reforms to the international trade, financial and monetary system if the 2030 Agenda is to be met on time.
Overall, the report provides recommendations to make debt, capital and banks work for development, including:
- An expanded role for special drawing rights as a flexible and scalable financing mechanism that goes beyond liquidity provisioning to support long-standing calls for a global environmental protection fund providing predictable and stable emergency funding without strict policy conditionalities or limiting eligibility criteria.
- A global SDG-related concessional lending programme for low- and lower-middle-income developing countries combining a refinancing facility designed to allow participant countries to borrow on concessional terms and an additional lending facility designed to cover the external share of gross financing needs of the public sector until 2030.
- A global sustainable development fund capitalized and replenished by donor countries paying in their unfulfilled commitments to the official development assistance target of 0.7% of gross national income and providing dedicated resources to compensate for what was only partially delivered over past decades.
- Stronger regional monetary cooperation to refinance and promote intraregional trade and develop intraregional value chains, moving beyond simple regional reserve swap and pooling agreements to bridge liquidity constraints towards the more full-scale development of regional payment systems and internal clearing unions.
- A rules-based framework to facilitate an orderly and equitable restructuring of sovereign debt that can no longer be serviced according to the original contract, governed by a set of agreed principles and body of international law.
- Curtailing tax-motivated illicit financial flows through a unitary taxation system that recognizes that the profits of multinational enterprises (MNEs) are generated collectively at the group level and combined with a global minimum effective corporate tax rate on all MNE profits set at around 20% to 25%, which is the average of current nominal rates across the world.
- Making capital controls a permanent policy tool while keeping capital-account management out of the purview of regional and bilateral trade and investment agreements but providing multilateral coordination and oversight, including of capital outflows from developed countries.
- A network of leading central banks to aggressively promote climate financing by moving away from a narrow focus on price stability and inflation targeting and to backstop support for green finance in dedicated public banks and through more general guidance mechanisms, such as quantitative easing;
- Giving development and other public banks more capital so that they can scale up finance for development; directing resources of sovereign wealth funds, whose assets under management have reached $7.9 trillion, towards developmental needs, including through supporting development banks; coordination of the new generation of south banks to establish stronger south-south financing ties.
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