UN High Level Political Forum on Sustainable-Development
IMF News, July 6, 2021
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- Published: July 6, 2021
Context and overview
- Remarks by Managing Director Kristalina Georgieva delivered at the UN High-Level Forum on sustainable development, July 6, 2021. Marked "As delivered."
- Opening frame: recovery from an 18-month period of loss and hardship; quoted Amanda Gorman: “When day comes, we ask ourselves, where can we find light in this never-ending shade?”
- IMF global growth forecasts cited: 6 percent in 2021 and 4 percent in 2022.
- Emphasis on uneven recovery: countries with strong policy capacity and high vaccination rates are "powering ahead"; countries with limited policy space and delayed vaccinations are "in the 'shade.'"
Pandemic exit plan and macro benefits
- IMF staff plan to accelerate exit from the pandemic estimated cost: around $50 billion.
- Projected benefit: boosting global output by $9 trillion between now and 2025.
- Vaccination target called for: vaccinate at least 60 percent in all countries by mid-2022.
- Coordination initiative: IMF, World Bank, WHO, and WTO formed a “war room” to track, coordinate, and advance delivery of COVID-19 health tools to developing countries.
Impact on poverty and the Sustainable Development Goals (SDGs)
- For the first time in 20 years, global poverty is reported as significantly increasing.
- IMF staff research assessed financing gaps to achieve the SDGs in five sectors: education, health, roads, electricity, and water & sanitation.
- Applied framework to four country case studies: Rwanda, Nigeria, Pakistan, and Cambodia.
- Financing needs of the SDGs expected to increase by an average annual 2½ percentage points of GDP, or almost $60 billion per year for all low income countries.
- Country-specific delays because of the pandemic:
- Nigeria: six-year delay in achieving its SDGs.
- Rwanda: five years.
Revenue, taxation, and domestic resource mobilization
- Observation: taxes are less than 15 percent of GDP in low-income countries.
- Sub-Saharan Africa tax collection: 12½ percent of GDP in taxes.
- IMF proposal: reforms to lift tax collection by 5 percentage points of GDP to expand fiscal capacity for development finance.
- International tax reform and domestic efforts to increase taxes highlighted as necessary to finance investments.
Private sector engagement and examples
- Call for reforms that support a favorable business climate to spur private sector investment in development.
- Rwanda example: private sector investments rose to over 1½ percent of GDP during 2015 17.
- Statement that transformative reforms require international support for countries at risk of falling behind.
External finance, concessional support, and IMF measures
- Estimation: gradually increasing official development assistance towards the UN target of 0.7 percent of GNI would generate some $200 billion annually in additional financing for development.
- IMF action: reference to a historic $650 billion new SDR allocation, with the IMF Board to vote virtually in days (as stated in the remarks).
- Suggestion that members in strong reserve positions could on-lend part of their new SDR allocations at highly concessional terms to those in dire need.
Policy recommendations and calls to action
- Immediate priorities:
- Vaccinate at least 60 percent in all countries by mid-2022.
- Mobilize around $50 billion to accelerate pandemic exit (IMF staff plan).
- Implement pro-growth structural reforms.
- Increase fiscal capacity through domestic resource mobilization, including tax reforms.
- Engage the private sector via reforms to improve the business climate.
- Scale up international support, including progress toward 0.7 percent of GNI in official development assistance and concessional on-lending of SDRs.
Closing message
- Concluding call: collective action to achieve the SDGs and to turn the crisis into an opportunity for greener, more resilient, and more inclusive economies.
- Closing quote paraphrase and citation of Amanda Gorman: “There is light. Only if we are brave enough to see it. Only if we are brave enough to be it.”
IMF — UN High Level Political Forum on Sustainable-Development, Remarks by Managing Director Kristalina Georgieva, July 6, 2021.