## Opening Remarks at the 2020 International Conference on Sustainable Development

_IMF News, September 21, 2020_

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## Bibliographic details
- Authors: Tao Zhang
- Published: September 21, 2020

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### Crisis and the case for multilateralism
- The COVID-19 pandemic is described as "a crisis like no other" that "does not stop at borders."
- Coordinated, international strategies are asserted to be more effective than unilateral action.
- Multilateralism is argued to be weakening and yet urgently needed to address cross-border health and economic spillovers.

### Challenges facing developing economies
- Developing countries face a "perfect storm" of external shocks: falling exports, sharp capital outflows, lower receipts from remittances, and lower tourism earnings.
- Fiscal response capacity gap (exact figures preserved):
  - Advanced economies boosted fiscal spending by almost 9 percentage points of GDP.
  - Emerging economies boosted their spending by 4 percent.
  - Developing countries were, on average, able to make only 2 percentage points of GDP available.
- Consequences and needs:
  - "This is simply not enough to cover their immediate needs."
  - Inadequate policy response risks lasting damage and makes achieving the 2030 Sustainable Development Goals more difficult.
  - National actions (raising taxes efficiently and equitably; allocating spending appropriately), stepped-up bilateral assistance, and greater involvement from civil society and the private sector are needed.
  - Multilateral institutions have key roles in project financing, meeting international liquidity needs, and assisting with debt restructuring where required.

### Climate change: adaptation, mitigation, and multilateral options
- Two complementary needs: adaptation (investments and economic adjustments) and mitigation (collective behavioral and policy changes).
- Existing multilateral process: annual United Nations Climate Change Conferences (COP), with COP-26 highlighted as pivotal for revising climate strategies.
- Numeric mitigation shortfalls and pricing context (exact figures preserved):
  - Current mitigation pledges "fall well short" of limiting warming to "1.5 to 2 degrees centigrade."
  - Global carbon prices average $2 per ton.
  - Carbon prices "likely need to get up to $75 per ton, according to some recent analyses."
- International carbon price floor concept:
  - If major stakeholders simultaneously implement a minimum carbon price within their jurisdictions, this could "cover about 70 percent of global emissions reduction opportunities" and reduce competitiveness concerns.
  - Such an arrangement could be designed "equitably, with stricter requirements for advanced countries, and flexibly to accommodate different policy approaches at the national level."
  - The IMF Fiscal Monitor report in 2019 is cited: "even fairly modest levels of carbon pricing could be highly effective in scaling up global mitigation."
- Emphasis: multilateral cooperation is required for large-scale mitigation solutions.

### Restoring dynamism in multilateralism: actions and recommendations
- Multilateral organizations must "up our game": be nimble, respond quickly, and be innovative.
- IMF actions cited during the COVID-19 crisis:
  - Provided "more financing and to a greater number of our members than at any other time in the history of the IMF."
  - Led the call for debt relief for the poorest countries, adopted by the G20.
  - Continued to provide policy advice and technical assistance.
  - Devoted substantial resources to climate change, inequality, gender, governance, social spending, and fintech.
- Expand partnerships beyond traditional international organizations:
  - Forge new partnerships that "bring in other players, including private investors and civil society."
  - Example: Compact with Africa (G20-led initiative) aims to close infrastructure gaps and boost private investment; could serve as a template for leveraging private-sector creativity and productivity.
  - Leverage corporate efforts to promote good governance and corporate social responsibility.
- Improve advocacy to communicate the costs of a withering multilateral system:
  - Recommit to openness and international cooperation while addressing downsides of globalization (rising inequality and other revealed vulnerabilities).
  - Protect labor and environmental standards.
  - Ensure international tax regimes prevent base erosion and profit shifting.
  - Address trade in digital services and flow of data.
- Overarching theme: cooperation is required to build the "building blocks for our future prosperity."

### Conclusion
- Reinvigorating multilateralism requires innovation, outreach to new partners, re-engagement, and rebuilding trust.
- Renewed momentum in development and climate areas can "reignite enthusiasm for multilateralism."
- The speaker invites help, support, and ideas from the audience.

*Opening Remarks at the 2020 International Conference on Sustainable Development — Tao Zhang, Deputy Managing Director, September 21, 2020.*

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## References

- [Tao Zhang](https://www.imf.org/en/About/senior-officials/Bios/tao-zhang)
- [IMF-World Bank Debt Sustainability Framework for Low-Income Countries -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/imf-world-bank-debt-sustainability-framework-for-low-income-countries)
- [Speeches](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2020/09/21/sp092120-zhang-icsd-conference_