Effective Development Co-operation Summit (Session 2)

Statement by Rebeca Grynspan, Secretary-General of UNCTAD

Effective Development Co-operation Summit (Session 2)

12 December 2022

Tackling Multiple Challenges: Strengthening Health Systems, Food Security and Socioeconomic Recovery

Thank you, Paul Ladd (Executive director of UNRISD), for your kind welcoming words and for all the good work UNRISD does.

Your excellencies,
Distinguished panelists,
Distinguished delegates,
Ladies and gentlemen,
Dear friends,

I have been given the hard task of setting the stage to the excellent expert panel that follows right after. I will do my best.

I will divide my presentation in two parts. First, I will talk about the context of the ‘multiple’ challenges. And second, I will discuss what this global context means for national governments in developing countries. I will then close with a reflection on the importance of the four principles of the Global Partnership in the times we live.

Time is short so allow me jump straight in. I will start with the context As this session’s title suggests, we are in world of cascading crises.

COVID, climate change and the cost-of-living crisis are all increasing poverty and hunger at alarming speed. Geopolitics, not economics, is now at the driving seat of globalization. Fundings gaps for SDG investments in developing countries are increasing. And debt burdens are turning unbearable for countries in the global south.

Now, cascading crises mean cascading inequalities. We saw this all too crudely during COVID. Almost everywhere one looked, gaps that were already too wide, got wider. This was true for gender gaps, for rural-urban gaps, for wealth and income gaps, for digital access gaps, for formal versus informal employment gaps. Inequalities make us fragile, and closing gaps builds resilience.

People are at the center of this reinforcing cascade of crises. People who, shock after shock, have depleted their capacity to cope with disaster. People who are falling in record numbers into poverty. People who are becoming increasingly disillusioned with their governments and political systems.

And most dramatically, people who are skipping meals, especially women and girls. Acute food insecurity has tripled in three years from 135 million before COVID, to almost 350 million today, according to FAO and the WFP. Heartbreakingly, over one million people are in a state of famine in six countries in the world (Afghanistan, Ethiopia, Haiti, South Sudan, Somalia, and Yemen). And famine, let’s leave the euphemisms aside, means people literally dying of hunger.

In all, the UN Global Crisis Response Group, of which I am part, estimates that over 1.6 billion people, in over 90 countries, are currently in a state of severe vulnerability.

As you probably know, The UN Global Crisis Response Group is made up of three workstreams: food and fertilizers, finance, and energy.

On finance, we have asked for concrete solutions to increase countries liquidity, fiscal space, and investment, for 2023 we are specially focusing on debt issues, which is a growing and very worrying problem.

According to the IMF, 60 per cent of all low-income countries, and one fourth of all middle- income countries, are in debt distress. But the issue is not contained only to the developing world. According to the Institute of International Finance, we started this year with a record debt bulk of over $300 trillion (most of it in the rich world, who are more able to cope than the developing world), more than three and half times global GDP. The world is now more than one thousand dollars in debt for every star in the Milky Way.

As interest rates rise, this tremendous debt burden is starting to shake. And if we do not set in place the appropriate multilateral mechanisms (for debt transparency, debt suspension, and debt restructuring), this burden will eventually crumble.

On the food workstream, our work has focused on bringing food prices down and easing the cost-of-living crisis we are going through. The UN has made an important contribution through the two Istanbul Food and Fertilizer Agreements, including the Black Sea Grain Initiative. But a big issue remains, which is the fertilizer crisis.

Since 2019, food prices have increased by a half, while fertilizer prices have increased by two and a half times.

So, what farmers are selling today is not enough to cover what they need to spend to produce it – this is especially true for smallholders in the developing world, particularly in Africa, which is expected to decline its fertilizer consumption by a fifth this year.

According to a recent forecast from the International Fertilizer Association, because of this fertilizer shortage next year’s agricultural production will decline by the equivalent of 216 trillion calories, or what is enough to feed 3.6 billion people, about half of humanity, for a month.

This will transform the current food affordability crisis into a food availability crisis next year. This issue, coupled with the debt issue, and increasing geopolitical tension, including in energy markets, is signaling than next year will be even tougher than this year.

This takes me to the second part of my presentation. How is this situation felt in developing countries, and what can development cooperation do to help

Here, my main message is this. Effective development cooperation has never been more important than it is today.

There is simply no way out of this crisis without an enabling international environment, which can redirect resources to where they are most needed.

So, allow me to turn now to the Global Partnership Four Principles – ownership, focus on results, inclusive partnerships, transparency, and mutual accountability and focus specially on the ownership and results part – and then add one final point of reflection.

So, first, on Ownership. We need ownership because all development cooperation projects are at the end of the day About People and institutions that need to embrace the responsibility for the success or failure of what happens. Ownership calls for a more horizontal approach, for respect and humbleness. Is not that all the problems are on one side and all the solutions are on the other. And there is definitely no one size fits all. Respect for local knowledge, for policy opportunities and constraints, for consensus building, knowledge sharing (where south- south and triangular cooperation can be very effective) should be part of development effectiveness under this principle. And this is a change in the mindset of a horizontal versus a vertical approach, this is not a technical change, it is a cultural change in the cooperation community.

Second, on focusing on results, which is very important for all stakeholders involved. Here I just want to remind you as all that results in development are difficult to measure,

development is complex, and long-term. It is crucial that we do all we can do to measure and be accountable, we need to develop sensible intermediate goals, in a way that makes our work more effective and efficient. But we must find room for the long-term in our results-based strategies. And development cooperation has to stick to long term targets, it has to persevere, to learn from the evolution of the cooperation but it cannot go for the long hanging fruits and short-term results only. I know how difficult this is, because we also have to convince our citizens in the cooperating countries and maintain the political will, but if we are serious about development there is no short-term development effectiveness we can sell.

Finally, I want to end with our reflection on a key issue which we should do more to highlight – policy coherence.

One of the big differences between aid and cooperation is that when we do cooperation, policy coherence matters much more. If we don’t have policy coherence in trade policy and rules and regulations, in climate and environmental policy, in interest rate policy, in the international financial system, what we do with the left hand will be overrun with what we do with the right hand. It is important the development cooperation actors are in the room when decisions are made. And those countries build a more holistic approach to development cooperation, including teams from different ministries and institutions. There is no Development Effectiveness without policy coherence.

Your excellencies, ladies, and gentlemen,

The world is indeed in a cascading crisis – and the cascade is far from being over. Debt and fertilizers may compound the situation next year. And to get out of the cascade we must literally jump, and leapfrog out. And for this, we need collective action, we need to use all the tools we have at hand, we need to innovate and above all we need to come together under the umbrella of solidarity and cooperation.

Thank you.