Development Co-operation Report 2023

1. In my view: Development co-operation must tackle complex challenges better and protect the most vulnerable

Amina J. Mohammed
UN Deputy Secretary-General

We are living through a time of complex interconnected challenges that are putting an unprecedented strain on people and planet. The confluence of crises posed by the pandemic and the recovery; the climate emergency; and the impact of Russia’s war of aggression against Ukraine on food, energy and finance markets is creating a perfect storm for much of the world. Ninety-four countries, home to some 1.6 billion people, are severely exposed to at least one dimension of this multifaceted crisis and unable to cope with it (United Nations, 2022[1]). Global temperatures are on track to rise by 2.8°C by the end of the century. Meanwhile, 54 developing countries are either in debt distress or at risk of it, while soaring inflation and shrinking fiscal space continue to undermine investments in the Sustainable Development Goals (SDGs).

Our current system of development co-operation is simply not meeting the scale of this challenge. Despite some positive developments, including the issuance of USD 650 billion in Special Drawing Rights, developing economies face unsustainable debt burdens and a liquidity crisis. Official development assistance (ODA) is deeply inadequate and has fallen behind commitments made decades ago. While ODA to the most vulnerable countries has grown since the pandemic, this increase has been driven overwhelmingly by loans. The total external debt service of least developed countries has more than tripled in the last ten years and is projected to reach USD 43 billion in 2022. Under such conditions, loans can be counterproductive and raise the risk of debt distress, undermining the ability of countries to invest in long‑term sustainable development and resilience.1

At a time of asymmetric vulnerabilities, we must also co-ordinate efforts to invest globally and protect locally, while ensuring that ODA is not redirected away from long-term development needs.

Mobilising more ODA and requiring that loans be made with greater concessionality are steps in the right direction. But at a time of asymmetric vulnerabilities, we must also co-ordinate efforts to invest globally and protect locally, while ensuring that ODA is not redirected away from long-term development needs. We need to enhance strategic planning and channel more ex ante financing to resilience-building to protect vulnerable countries and people that are most exposed to the adverse effects of shocks that threaten lives and livelihoods. These efforts must be complemented by a co-ordinated approach to providing immediate debt relief and restructuring. The Secretary-General has called for the reinstatement of the Debt Service Suspension Initiative and its expansion to include vulnerable middle-income countries, and the rechanneling of all unused Special Drawing Rights to countries in need.

Improving support for resilience-building that supports lives and livelihoods requires better strategic planning among developing countries and their partners. The United Nations is leading the way with the repositioning of its development system. With a reinvigorated Resident Coordinator system directly accountable to the Secretary-General and supported by new generation country teams around the world, we are now better able to deliver collective responses to national vulnerabilities and ensure system-wide accountability on the ground, in support of the SDGs.

But we need to go further. To achieve the SDGs and support lasting results, international partners must think more strategically about how the global financial system can be transformed to meet the demands of our time. The Bridgetown Agenda sets out many important recommendations, including expanding debt relief and access to concessional finance to vulnerable middle-income countries; integrating pandemic and disaster clauses into all debt contracts; and ensuring investments are aligned with the SDGs at the country level. These demonstrate how development partners can do more to meet the scale of today’s challenges while making the global economic system more equitable and absorbent to shocks. Other measures that should be considered include the use of metrics that go beyond gross domestic product and integrating vulnerability into development co-operation policies and practices.

Development partners can do more to meet the scale of today’s challenges while making the global economic system more equitable and absorbent to shocks.

Looking forward, I see three broad areas for targeted, risk-informed and resilient development co‑operation: 1) boosting social protection and investing in decent job creation; 2) strengthening climate adaptation; and 3) harnessing digital transformations.

1. Building on lessons learnt from the COVID-19 crisis, and in anticipation of future crises and transitions, we must invest in universal social protection and decent job creation, which function both as critical shock absorbers and as enablers of inclusive growth. The UN Global Accelerator on Jobs and Social Protection for Just Transitions provides a coherent framework for short- and long-term actions and solutions.

2. Development co-operation must do more to support the most vulnerable countries as they navigate the climate crisis. Building on the recent achievements of COP 27, especially on loss and damage, we must mainstream climate resilience into development co-operation and meet climate finance commitments while bringing climate and development finance closer together in recognition of the need to accelerate just transitions for all. Sub-Saharan Africa, for example, will need billions of dollars this decade to protect itself from climate-related disasters. In this regard, the Secretary‑General will continue to advocate for a large-scale SDG Stimulus to mobilise the financing needed at scale for investments in long-term sustainable development.

3. The pandemic has accelerated digital transformation through more effective digital learning platforms, strengthened e-commerce and e-procurement systems and other innovative digital technologies. We must support digital interventions nationally and globally, especially those that address multi-dimensional vulnerability and build resilience.

The upcoming High-level Meeting of the Economic and Social Council’s Development Cooperation Forum on 14-15 March 2023 will provide one forum to tackle these critical themes. With real commitment to change and political will, upcoming milestones like the SDG Summit and the High-level Dialogue on Financing for Development in 2023 can and must forge a practical and feasible path for development co‑operation that is fit for purpose and serves those that need it most – now and in the future.

References

[1] United Nations (2022), Global impact of the war in Ukraine: Billions of people face the greatest cost-of-living crisis in a generation, https://news.un.org/pages/wp-content/uploads/2022/06/GCRG_2nd-Brief_Jun8_2022_FINAL.pdf?utm_source=United%20Nations&utm_medium=Brief&utm_campaign=Global%20Crisis%20Response.

Note

← 1.  See article on “Soaring debt burden jeopardizes recovery of least developed countries,” https://unctad.org/topic/least-developed-countries/chart-march-2022.