United Nations High-level Political Forum on Sustainable Development event: The role of business and the financial sector in financing a sustainable and resilient recovery from COVID-19

Organized by the UN Development Programme, UNCTAD, the International Labour Organization and the UN Department of Economic and Social Affairs

 

Dear delegates,
Ladies and gentlemen,

The pandemic has highligthed the need for cooperation, and today’s event illustrates how we can  come together and use our joint forces. Over the last months, UNCTAD, UNDP, ILO and DESA have held extensive consultations with development partners, and organized joint events on the need for more finance for development to combat this crisis and build a resilient, inclusive and sustainable recovery.

As UNCTAD leads Cluster 3 on finance and technology, I will focus my remarks on these areas.

First, where do we stand with regard to investing in sustainable development and the SDGs?

The situation is rather bleak. The COVID-19 crisis has caused a dramatic fall in foreign direct investment in 2020, with global FDI flows dropping by 35 per cent to $1 trillion. This is a massive decline, and deprives many developing countries from a critical source of capital.

The crisis resulted in a collapse of investment flows to sectors relevant for the SDGs in developing countries. In fact, all but one SDG investment sector registered a double-digit decline from pre-pandemic levels.

While there are signs that international investment is recovering,  it could take time to gather speed. We expect that firms and financiers will still be cautious with new overseas investments in productive assets and infrastructure, especially in developing countries.

We thus neeed concerted action by all stakeholders to ensure investment in resilience is promoted, stimulus between infrastructure and industry is balanced, and the implementation challenges of recovery plans are addressed so that all countries and all people can benefit.

Our recently released World Investment Report provides a policy framework on how to achieve such outcome. The report also discusses the contribution of capital markets and sustainable finance to this endeavour, and the need for a global framework for sustainability reporting. This is a matter that we will touch upon today.

Second, turning to technology, the digital divide has been at the centre of policy discussions and concerns.

The pandemic has further highlighted the depth of the digital divides between and within countries. As the digital revolution accelerates, many countries and whole continents risk being left  behind. This situation needs to be urgently addressed before it is too late.

Catching and riding on technological waves is a big challenge, especially as there is not one but two waves of digital transformation.

The first wave is the digital revolution of Web 2.0 technologies. This wave is at its peak but half of the world’s population is still not connected to Internet, and hence has not been able to catch this wave.   

The second wave is highly data driven and involves developments in artificial intelligence, big data analytics, robotics,  the Internet of Things, blockchain, and other frontier technologies. This wave is at its initial stage. There are very few countries that create the technologies that drive this revolution. Almost none in the developing world are well prepared for the consequences.

But all is not gloom and doom. In our Technology and Innovation Report, we argue that frontier technologies have enormous potential for improving people’s lives and protecting the planet, and thus can make critical contributions towards achiveving the SDGs. We have seen powerful examples in developing countries of using frontier technologies to track diseases, create early warnings for pandemics and natural disasters, and monitor crops and droughts.

The question arises as to how we can support countries to benefit from the digital transformation. Building coalitions to optimize the efforts of the UN system are useful. Our eTrade for All Initiative is a good example as it combines the expertise of over 30 international organizations, including all the agencies here. We work together to create a hub or a clearing house to support developing countries to engage in ecommerce and the digital economy.

In closing, I want to reiterate that Cluster 3 stands ready to support countries to align finance, investment, and technology to recover better from COVID-19 and accelerate the implementation of the SDGs. Thank you.