World leaders today challenged models of development shaped by wealthy States as the General Assembly held a high-level meeting on gaps and impediments faced by middle-income countries in the implementation of the 2030 Agenda for Sustainable Development.
“It is in the best interest of humanity that we work collectively in building a transformational model of cooperation for sustainable global development,” said Prime Minster of Antigua and Barbuda Gaston Alphonso Browne. Questioning the validity of modalities used to assess development levels, he said his small, vulnerable country is disqualified from access to concessional loans and grants due to “skewed constructs of what represents development”.
People in middle-income countries are being punished for their adherence to human and political rights and the openness of their economies to foreign investment, he said. Small groups of expatriates receive most of the profits from those investments, while arbitrary rules imposed by a handful of rich countries make economic diversification difficult. Fair trade, access to finance, anti‑competition rules and debt burden should be among the factors used to measure development as opposed to simply using per capita income, he said, warning that middle-income countries will witness economic decline and social dislocation if the way they are assessed does not change.
The obstacles such countries face, particularly small island developing States, are externally generated, he said, stressing: “Our countries did not create climate change”. He proposed setting up a global partnership on debt relief and for wealthy countries to divert defence spending to address climate‑related challenges.
Opening the meeting, General Assembly President María Fernanda Espinosa Garcés (Ecuador) said middle-income countries are a growing economic force substantially contributing to the global gross domestic product (GDP). Sheltering 70 per cent of the world’s population, those countries will not achieve the 2030 Agenda unless obstacles the face are duly addressed. Gaps in inequality and financing must be eliminated, she stressed.
Elliott Harris, Assistant Secretary-General for Economic Development, said middle-income countries play a leading role in achieving the Sustainable Development Goals, particularly those related to poverty reduction. Cooperation among these countries must focus on building resilience against external shocks to avoid falling into the “middle-income trap” that prevents them from further advancing development strategies. Efforts to reform the United Nations development agenda will better position it to assist middle-income countries.
Valentin Rybakov (Belarus), Economic and Social Council Vice-President, said that achieving the 2030 Agenda will require greater international support for middle-income countries as they grapple with rapid technological change, mass migration, crippling debt and many other challenges that can only be addressed in a coordinated manner. Hard-won development gains are at risk, he warned, adding that the sustainable development of middle-income countries has the potential to stabilize regions in conflict and that development cooperation can help them build resilience and adapt to humanitarian crises.
During the meeting’s plenary segment, Mr. Browne, who then spoke on behalf of the Caribbean Community (CARICOM), went on to say that certain countries promote the notion of graduation to middle-income status as a methodology for ending aid and development assistance. “It would, therefore, appear that graduation works in favour of donor countries,” he said.
Costa Rica’s representative, speaking for the Like-Minded Group of Countries Supporters of Middle-Income Countries, echoing that concern, said that, as middle‑income countries’ per capita income increases above low-income thresholds, their access to official development assistance (ODA) and external public financing often decreases faster than can be compensated for by higher tax revenues in per capita terms. She also took issue with the use of a single metric to classify the many different economies, stressing the need to increase and ease the access of such countries to development financing and climate finance to support national development plans.
Egypt’s representative, speaking on behalf of the “Group of 77” developing countries and China, said efforts to address the challenges of middle-income countries should be strengthened through the exchange of experiences, improved coordination, and better and focused support from international organizations.
The speaker for the European Union said that, as the world’s leading provider of official development assistance, it contributed 57 per cent of global ODA in 2017. By working with a broader range of stakeholders and partner countries, the Union combines a focus on the poorest and most fragile partners with stronger partnerships with middle-income countries that are based on trade, investment, innovation and knowledge exchanges. Over the coming years, it will mobilize more than €45 billion of added investments in developing countries, including middle-income countries.
The meeting also featured two panel discussions: one on implementation of the 2030 Agenda and another on South-South and triangular cooperation.
During the first discussion, Member States called for new modalities to assess the development level of countries and warned that the lack of development resources directed at middle-income countries is resulting in growing dissatisfaction. Panellists Tao Zhang, Deputy Managing Director of the International Monetary Fund (IMF), and Carolina Sánchez-Páramo, Senior Director of the World Bank Poverty and Equity Global Practice, said that their organizations are exploring ways to account for country-specific challenges when addressing the needs of middle-income countries.
Throughout the second discussion speakers suggested not only reconsidering assessment modalities, but also cooperation modalities, with South-South cooperation being identified as a strategic and equitable tool for development. Mario Pezzini, Director of the Organisation for Economic Co-operation and Development (OECD) Development Centre, said that triangular and South-South cooperation are indispensable. Cabo Verde’s Minister for Foreign Affairs and Communities and Minister for Defence Luis Felipe Tavares valued the benefits of South-South cooperation at $20 billion.
The Assembly will reconvene at 10 a.m. on Wednesday, 5 December, to consider reports of its First Committee (Disarmament and International Security).
MARÍA FERNANDA ESPINOSA GARCÉS (Ecuador), President of the General Assembly, said today’s meeting demonstrates the tenacity of middle-income countries to shed a light on the distinct and unique challenges they face. “Multilateralism is still strong,” she said. In the last 50 years, middle-income countries have become a growing economic force substantially contributing to the global gross domestic product (GDP) and boosting their international exports. These countries shelter 70 per cent of the world’s population. Hence, improving living conditions there is critical.
Middle-income countries continue to grapple with emerging challenges, she said, warning that unless obstacles and vulnerable areas are duly addressed, the 2030 Agenda for Sustainable Development will not be met. Gaps in inequality and financing must be eliminated. Sustainable and predictable growth is essential to develop fiscal policies. Middle-income countries need responsible investments along with social commitments that respect human rights, environmental regulations and fiscal norms. Empowering women will make a difference, she said, underscoring the need to boost women’s participation in politics and in the economy.
Middle-income countries have recently suffered a drastic reduction in development flows, she said, emphasizing the need to renew commitment to South-South cooperation. Landlocked and African countries have additional challenges and obstacles that need particular attention. She called for innovative ideas to resolve the paradox that middle-income countries face, adding that the ambition and boldness of the 2030 Agenda must continue to compel the international community to work together to overcome challenges.
GASTON ALPHONSO BROWNE, Prime Minister, Minister for Finance, Corporate Governance and Public Private Partnerships of Antigua and Barbuda, said his country — one of the smallest and most vulnerable in the world — is disqualified from access to concessional loans and grants as a result of “skewed constructs of what represents development”, saying that the time has long passed to reject “this “palpably false basis of judging a country’s wealth or its level of development”. People in middle-income countries are being punished for their adherence to human and political rights and for the openness of their economies. “Openness to foreign investment results in abnormally high repatriation of profits to small groups of expatriates,” he noted, something he said distorts genuine per capita income. Middle-income countries will witness economic decline and social dislocation if the way they are assessed does not change.
He asserted that challenges faced by middle-income countries, particularly small-island developing States, are externally generated. “Our countries did not create climate change,” he said, warning that coping with the phenomenon is depleting their financial resources. Further, middle-income countries, whose economies largely depend on a narrow range of productive activities, face obstacles imposed by rich countries when they try to diversify. “A handful of rich countries control and unilaterally enforce arbitrary rules that suit them,” he said, calling for fair trade, access to finance, anti-competition rules and debt burden to be among the factors used to measure development, as opposed to simply using per capita income.
Heads of State and Government of middle-income countries are frustrated about the increasing number of obstacles they face as they pursue development strategies. “With a unified vision of global development the international community can help address development gaps,” he said. To that aim, the international community must agree that the current methodology for measuring development is flawed, he said, proposing a global partnership on debt relief. Servicing debt amid frequent disasters and external shocks restricts spending on education and new technologies. He called on wealthy countries to reduce defence spending and urged those countries most responsible for causing climate change to commit to containing the phenomenon. “It is in the best interest of humanity that we work collectively in building a transformational model of cooperation for sustainable global development,” he said.
ELLIOTT HARRIS, Assistant Secretary-General for Economic Development, said middle-income countries play a leading role in achieving the Sustainable Development Goals, particularly those related to poverty reduction. “Poverty remains pervasive in middle-income countries,” he said, adding that economic growth has failed to lift people out of the poverty in those countries. Large movements of people have further aggravated poverty rates. Gender-based inequality is also a major challenge for middle-income countries as they work to achieve the goals of the 2030 Agenda. Cooperation among these countries must focus on building resilience against external shocks.
Countries must avoid the “middle-income trap” that prevents them from further advancing development strategies, he said, stressing that “avoiding the trap is critical to achieve the Sustainable Development Goals.” These countries can learn from each other on how to boost growth and South-South cooperation is a catalyst for mutual learning, he said, adding that development requires institutional reform that allows for financial growth. The United Nations has a comparative advantage in supporting all areas of sustainable development and advancing South-South cooperation. Efforts to reposition the Organization’s development agenda will place it in a better position to assist middle-income countries. “The international community cannot be satisfied until all people share equitably in the benefits of sustainable development,” he concluded.
VALENTIN RYBAKOV (Belarus), Vice-President of the Economic and Social Council, said this is a ground-breaking moment, expressing hope that today’s event will help address the challenges of middle-income countries. Poverty is multidimensional and achieving the 2030 Agenda will require a renewed focus and bolstered international support to middle-income countries. These countries are home to 73 per cent of the world’s people. They are exposed to rapid technological change, mass migration, crippling debt and many other challenges that can only be addressed in a coordinated manner. Policy options to address synergies and trade-offs within a 2030 Agenda context are complex. Hard-won development gains are at risk.
International cooperation must help address social and economic structures, unemployment and low productivity sectors, he continued, also underscoring the need to facilitate technology transfer, and ensure market access and insertion in global value chains. The sustainable development of middle-income countries has the potential of stabilizing a region in conflict. Development cooperation can help these countries build resilience and adapt to humanitarian crises. Challenges, gaps and inequalities can also be addressed through South-South cooperation. “It is important to share good practices,” he added. There continues to be limited institutional capacity to implement the Sustainable Development Goals, he said, calling for more financing and new partnerships that encourage greater public-private cooperation.
The General Assembly then held a high-level panel discussion on “Successes and challenges in the implementation of the 2030 Agenda for middle-income countries” moderated by Elliott Harris, Assistant Secretary-General for Economic Development. The discussion featured presentations by Mohamed Benchaaboun, Minister for Economy and Finance of Morocco; Ryna Garay, Vice-Minister for Development Cooperation of El Salvador; Abdoulaye Mar Dieye, Assistant Secretary-General and Director of the United Nations Development Programme (UNDP) Bureau for Policy Programme and Support; Tao Zhang, Deputy Managing Director of the International Monetary Fund (IMF); and Carolina Sánchez-Páramo, Senior Director of the World Bank Poverty and Equity Global Practice.
Mr. HARRIS opened the panel by noting that middle-income countries account for more than half of global GDP. Such countries are central to the achievement of the Sustainable Development Goals but face significant challenges as they strive to achieve the Goals. While middle-income countries vary in size, economic potential and social performance, they grapple with similar concerns such as climate change and unsustainable debt. They tend to be highly dependent on commodity exports and need prudent macroeconomic frameworks. The panel will seek to identify how the international community can adapt to their changing needs.
Mr. BENCHAABOUN said middle-income countries undertake enormous efforts to realize the Sustainable Development Goals and reduce inequality. However, they encounter large challenges and suffer from fluctuating commodity prices. Morocco has integrated the Goals into national efforts, including through its green plan which targets agriculture and its resilience to climate change. Through its energy strategy, the country has increased its use of renewable energy sources and the 2030 strategic vision for education has allowed it to ensure better job training and to increase employment opportunities for youth and women. Morocco adopted a national development strategy to better integrate the Goals, he said, adding that inclusive finance must include microfinance. All these initiatives are being undertaken with limited budgets, he said, stressing the relevance of mobilizing national resources for development and increasing technology transfers.
Ms. GARAY said middle-income countries must overcome challenges to mobilize development resources. “This is particularly important in countries with low production levels and low foreign direct investment,” she said, noting that such factors result in a lack of essential development funds. Middle-income countries tend to be particularly vulnerable to climate change and the loss of lives and resources due to natural disasters adversely impacts development. The use of per capita income as the sole tool to measure development is flawed, she asserted, adding that El Salvador promotes private sector involvement to ensure efforts to achieve the 2030 Agenda are sustained. Efforts are also under way to ensure the inclusion of vulnerable groups in development initiatives.
Mr. DIEYE said the use of complex and comprehensive indicators such as the Human Development Index will lead to socioeconomic progress and that the journey from low- to high-income status is tedious. “It takes an average of 50 years for countries to make that transition,” he said, asserting that five decades was too long. Middle-income countries fall into a trap when they rely too heavily on the comparative advantage that brought them to the middle-income level in the first place. Countries must strive to diversify their economies, he said, adding that inclusion is essential to avoid economic disruption. “It is critical to build economies driven by educated and healthy people with the skills needed to make the transition to high-income status,” he said. Countries can avoid the middle-income trap by diversifying their economies and creating the conditions that allow for sharing of development gains. “Development partners need to respond to the diverse realities of middle-income countries,” he concluded.
Mr. ZHANG said middle-income countries have made large leaps forward in efforts to achieve the Sustainable Development Goals. While more than 1 billion people in such countries have risen above the poverty line, much remains to be done for the jump to higher income levels to be sustained. Small States are among the most vulnerable to natural disasters and climate change, he said, adding that the international community must work towards a “new multilateralism” to manage risks. Middle-income countries must pursue structural reform to sustain medium-term growth, including by advancing labour market reforms and trade liberalization. Reform efforts must focus on fiscal policy, actions to ensure equal access to education and health services, enhancing financial inclusion and building economic resilience.
Ms. SANCHEZ said that while middle-income countries are home to more than 60 per cent of the world’s extreme poor, they have seen major advances over the past two decades thanks to inclusive growth strategies. Lower-middle-income countries face daunting challenges, including Nigeria which is set to become the country with the most people living in extreme poverty. Conflicts in Yemen and Syria have pushed them from middle- to low-income status. Projections suggest that many middle-income countries will not achieve the Sustainable Development Goals without major reform, she said, noting that the World Bank has introduced new methodologies to measure poverty that will allow for better assessments of inequality. The Bank also introduced a new multidimensional poverty measure that accounts for myriad means of deprivation such as lack of education. “The single most important investment countries can make is in its people,” she noted, adding that building human capital leads to economic growth.
In the ensuing discussion, representatives asked for specific examples of best practices middle-income countries can pursue to promote sustainable development. The representative of Jamaica asked what the ideal tax-to-GDP ratio is to promote development, while the representative of Indonesia asked how middle-income countries can ensure that they gain maximum benefits from technological advances while minimizing negative impacts on their populations.
Speakers pointed to the obstacles faced by middle-income countries at the national and regional levels and challenged the notion that per capita income is the best indicator of development status.
The representative of Costa Rica underscored the growing dissatisfaction among middle-income countries with how resources have been invested to promote development. It has been impossible to break cycles of inequality, he said, highlighting the need for a paradigm shift that will recognize structural gaps.
The representative of Zimbabwe said middle-income countries in Africa face challenges related to job creation, reducing extreme poverty and closing the infrastructure gap.
The representative of the Philippines said that grouping States solely based on per capita income is ineffective, stressing: “It is important to understand the individual challenges of middle-income countries.” The representative of Mauritius echoed this belief.
The representative of Nigeria voiced concern about information presented by the World Bank and called for the use of alternative sources of information to corroborate claims. Nigeria is emerging from a recession, he said, asking panellists how middle-income countries can achieve their goals within an international system that is skewed against them.
The concerns expressed during the discussion also affected less-developed countries, said the representative of Uganda — one such country. “Investing in people through inclusive and sustainable policymaking is critical,” he said, asking how countries can mitigate illicit financial flows.
Panellists then responded to comments by Member States.
Mr. DIEYE said recent studies indicate that to ensure domestic financial resources are promoting growth the tax-to-GDP ratio must be 24 per cent. He said he is mystified at the fact that States are at the “tyranny of the GDP” to assess development. “We have indicators that can better approximate development,” he said. Turning to comments by Costa Rica, he said inequality remains a major menace and that illicit financial flows are an obstacle to development.
Mr. BENCHAABOUN said the tax-to-GDP ratio for Morocco has been identified as 20 per cent. The country is using emerging technologies to make relations with the private sector more efficient, especially in customs-related matters. “The use of technologies improves transparency,” he noted. Morocco receives some $6.5 billion in remittances from its citizens abroad, he said, adding that the Government has set up physical infrastructure in countries hosting its citizens to facilitate transfers.
Mr. ZHANG said defining the tax-to-GDP ratio requires an understanding of each State’s conditions. Addressing the financing gap requires implementing institutional reforms. The IMF is considering the vulnerability of markets to climate change.
Ms. SANCHEZ, responding to the representative of Nigeria, said figures mentioned in her presentation are based on the latest available data. Turning to questions on technology, she said the international community has been too focused on the impact of automation on employment. Rather, attention must be placed on the impact of technology on the price of products as the decreasing cost of goods can have major impacts on the livelihoods of people. Technological advances will require infrastructure investment, she said, calling for those efforts to ensure inclusion of small private-sector actors.
Ms. GARAY said El Salvador aligned its national development plans with the framework of the Sustainable Development Goals. The highest priority area is increasing literacy rates, she said, adding that the Government is focused on providing access to computers to children in primary education. Inclusive access to technology will lead to an increase in national productivity levels. “Our production base needs to expand in symphony with technological and scientific development,” she said.
Mr. HARRIS closed the panel by calling for greater consideration of indicators that can better assess the development status of States.
GASTON ALPHONSO BROWNE, Prime Minister, Minister for Finance, Corporate Governance and Public Private Partnerships of Antigua and Barbuda, speaking on behalf of the Caribbean Community (CARICOM), said developed nations and Organization for Economic Cooperation and Development (OECD) countries promote the notion of graduation to middle-income status as a methodology for ending aid and development assistance. “It would therefore appear that graduation works in favour of donor countries,” he said. CARICOM calls for priority consideration to be given to, among other things, the creation of timelines for international financial institutions to recognize an alternative to GDP as a way to assess a country’s level of development and its eligibility for concessionary financing. Climate finance initiatives must be at the heart of programming for middle-income countries, he said, calling also for a review of the high debt levels of Caribbean territories with a view to negotiating better long-term solutions.
Among other recommendations, he underscored CARICOM’S support for expanding the remit of mechanisms to assess the resilience of middle-income countries. The aim of “leaving no one behind” and the fostering of resilience-building must be a fundamental component of all United Nations programming. He went on to emphasize the United Nations role as an interlocutor between middle-income countries and international financial institutions and the wider donor community. He suggested that the situation of middle-income countries become a regular General Assembly agenda item, adding also that South-South cooperation, North and triangular cooperation, and genuine and durable partnerships will be pivotal for assisting middle-income countries.
MOHAMED BENCHAABOUN, Minister for Economy and Finance of Morocco, said that despite efforts to address poverty in all its dimensions, inequalities persist, with middle-income countries facing myriad challenges that must be reflected through appropriate ranking and categorization. Cooperation mechanisms must adapt themselves to national priorities, he said, emphasizing the importance of coordination within the United Nations development system. Global partnerships must also be strengthened, with public-private partnerships seen as a favourable framework for South-South and triangular cooperation.
MTHULI NCUBE, Minister for Finance and Economic Development of Zimbabwe, noting that his country is projected to attain lower middle-income status by the end of this year following a rebasing of its GDP in line with international norms, acknowledged that there is limited scope for official development assistance (ODA) to expand the fiscal space of middle-income countries. However, ODA and other concessional financing remain important, particularly for investments in health, education and other social sectors. Countries such as Zimbabwe still lack a sufficiently broad capability base that would enable them to compete and narrow the economic and social gap with more developed countries.
ALEXANDER PANKIN, Deputy Minister for Foreign Affairs of the Russian Federation, said targeted assistance to middle-income countries should include personnel training and the introduction of modern digital technologies. Unified customs areas like the Eurasian Economic Union can help overcome inequalities while pulling up countries to the level of those who drive economic development. On reforms to the United Nations development system, he said the empowerment of resident coordinators and a greater focus on local needs should help middle-income countries overcome the challenges they face.
ILEANA NÚÑEZ MORDOCHE, Deputy Minister of Foreign Trade and Investment of Cuba, said there must be a more comprehensive, multidimensional and complete methodology for classifying levels of development that goes beyond income indicators and which accounts for the special challenges, vulnerabilities, structural gaps and particularities of countries. The problems faced by middle-income countries must be addressed in a multilateral framework, she said, rejecting attempts to weaken existing multilateral mechanisms. Recalling that Cuba is a middle-income country subject to an economic, commercial and financial blockade by the Government of the United States, she said South-South cooperation is a valuable complement to North-South cooperation. For that reason, Cuba has — despite limited resources — implemented cooperation programmes with 157 countries, including in health, education and sports.
MOHAMED FATHI AHMED EDREES (Egypt), speaking on behalf of the “Group of 77” developing countries and China, said efforts to address the challenges of middle‑income countries should be strengthened through the exchange of experiences, improved coordination, and better and focused support from the United Nations development system, international financial institutions, regional organizations and other stakeholders. Institutional arrangements must be established urgently to support middle-income countries, including a comprehensive system-wide long-term strategy that would facilitate sustainable development cooperation and coordinated support.
He went on to invite the United Nations system, in consultation with international financial institutions, to develop transparent ways of measuring sustainable development which go beyond per capita income. Building on existing initiatives as appropriate, such yardsticks should recognize the multidimensional nature of poverty and the social, economic and environmental dimensions of domestic output as well as structural gaps at all levels, he stated.
Also speaking were Government ministers, senior officials and representatives of Cabo Verde, Spain, El Salvador and Tajikistan.
The Assembly then held a high-level panel discussion on “The role of South-South cooperation and Triangular cooperation in the implementation of the 2030 Agenda for Sustainable Development” chaired by Ileana Núñez Mordoche, Vice-Minister for Foreign Trade and Investment of Cuba and Chair of the Economic Commission for Latin America and the Caribbean (ECLAC) South-South Cooperation Committee. The discussion featured presentations by Mario Pezzini, Director of the Organization for Economic Cooperation and Development’s Development Centre; Luis Felipe Tavares, Minister for Foreign Affairs and Communities and Minister for Defence of Cabo Verde; Antonio Pedro, Regional Director of the Economic Commission of Africa Sub-regional Office for Central Africa; Jorge Chediek, Director of the United Nations Office for South-South Cooperation; and Alicia Bárcena Ibarra, Executive Secretary of ECLAC.
Mr. PEZZINI said that a major economic transformation in the last several decades has led to a series of unintended consequences. While some countries’ economies improved substantially, in many cases the change that came about is beyond what could be measured in a graph. South-South cooperation and trade have increased substantially. In many cases, extreme poverty has declined. However, a series of problems has also emerged, including in the economic, social and geopolitical sectors. These include a slowdown in GDP growth and international trade, and increased protectionism. On the social front, the world has seen a rise in inequality and loss of social cohesion. This is particularly worrying as the population ages rapidly. On the geopolitical front, weakening global governance and armed conflict have posed their own unique challenges. Countries will need to adapt their strategies accordingly. In many cases, the problem in middle-income countries often stems from the lack of capacity. Triangular and South-South cooperation are indispensable in that regard, he said, adding that challenges are becoming increasingly more difficult to solve with just “two people” at the table.
Mr. TAVARES said that South-South cooperation is not a “silver bullet” and it should never rule out other options. It is not a substitute but rather a complement to other forms of cooperation. South-South cooperation goes beyond development cooperation. Its exact value in 2013 was estimated at around $20 billion, he said, adding that it is critical to learn the strengths and weaknesses of such cooperation. Cabo Verde has benefited from it, he said, noting various examples of his country collaborating with other Southern nations, including in technical capacity-building. He noted a programme in partnership with Angola that promotes the empowerment of women and as well as other programmes focused on knowledge sharing in urban gardening and agriculture. In terms of a long-term vision, Cabo Verde is working to diversify its economy. “We want to be a platform for services in the Atlantic, where we are located,” he added. Cabo Verde is looking for partnerships that can help it grow and achieve sustainable development.
Mr. PEDRO said that breaking away from the boom and bust cycle of development takes a lot of time. Even countries that have made significant strides in diversifying their economies remain vulnerable. He stressed the need for coordinated, patient and predictable investments. Turning to Africa, he said that more investments are needed to change the structural composition of the continent. That requires countries to better understand their comparative and competitive advantages. Bankable projects are essential as they attract investors. Parts of the continent are arid, he said, calling for deeper partnerships to advance research and development. Africa’s development model could be more balanced and inward-looking to fulfil its own needs. “We cannot talk about addressing the middle-income trap without engaging the private sector and increasing bankable projects,” he said. With the drop of commodity prices in 2014, several middle-income countries in central Africa suffered some significant setbacks. Another area in need for collaboration is innovation, science and technology which will help deepen the diversification strategy.
Mr. CHEDIEK recalled the origins of South-South cooperation, saying that in the 1970s it was believed that the mere transfer of technology from the North to the South would produce the same results accomplished in the North. Many believed that this would create “islands of progress” in developing countries which would carry the entire country towards progress. In the 1980s and 1990s, South-South cooperation was not a central component of the United Nations. It was more prevalent in the work of regional organizations. “South-South cooperation really took off this century,” he said, adding that countries from the South have transformed their economies and made much progress in recent years. At the same time, developing countries and international organizations decided to commit funds and engage in triangular cooperation. He expressed concern that many Southern countries still do not have the structure to support South-South cooperation and urged all Member States to renew their commitment to both South-South and triangular cooperation.
Ms. BÁRCENA said that “business-as-usual” in development is not working; a shift is critically needed. Trade is not as dynamic as many countries require it to be. Countries in the region are focused on building the institutional architecture required to achieve sustainable development. The world is facing a real crisis in multilateralism which no one can deny. She said the Latin America and the Caribbean region is facing some critical challenges, including a shift in funding and a decline in trade. In the face of weakening multilateralism and a return to protectionism, the region must move toward reliable and predictable funding required to meet the Sustainable Development Goals. While the region has reduced levels of poverty, it continues to face increasing inequality. The world has changed so much that cooperation is no longer about developed countries helping developing countries. This new yardstick should incorporate different aspects of development, she said, adding that looking at only income is not enough. It is critical to examine human capacity and potential as well.
In the ensuing discussion, the representative of Qatar said that South-South and Triangular cooperation play a critical role in trade and the fight against poverty, particularly in middle-income countries. Such cooperation is an essential part of Qatar’s foreign policy, which also continues to attach great importance to ODA.
The delegate of Argentina said it is essential to renew cooperation agreements with developed countries and traditional donors. Currently, many middle-income countries play a key role in South-South cooperation. Together they have contributed to resolving various development challenges. Triangular cooperation represents an innovative mechanism that allows developed countries to shoulder their historic responsibilities.
The representative of Uganda said that South-South cooperation is a strategic tool for development, adding that in recent years it has been moved to the centre stage of development. He underscored the importance of a paradigm shift and changing challenge into opportunities. For example, the challenge of migration has brought about a positive return in the form of remittances. “Development is not a race but a destination,” he added.
Also speaking in the discussion was the representative of Costa Rica.
JOÃO PEDRO VALE DE ALMEIDA (European Union) said it is the world’s leading provider of ODA and in 2017 its contributions made up 57 per cent of global ODA. Driven by the 2030 Agenda, the European Union is also committed to strengthening cooperation with the middle-income countries, in which many people live in poverty and there are high levels of inequality and social exclusion. The European Union emphasizes better-tailored partnerships with a broader range of stakeholders and partner countries. This means combining a focus on the poorest and most fragile partners with stronger partnerships with middle-income countries that are based on trade, investment, innovation and knowledge exchanges.
The European Union also supports the implementation of the Addis Ababa Action Agenda, he said. One key action is support for domestic resource mobilization. According to the IMF, by widening their tax base and increasing tax revenues, many middle-income countries will be able to close the financing gap for reaching the Goals in areas such as education, health, electricity, roads and water. The European Union is willing to continue its partnerships during this reform process. The European Investment Plan is an important initiative to leverage additional resources, primarily from the private sector, into sustainable development and growth. Over the coming years, the European Union will mobilize more than 45 billion euros of additional investments in developing countries, including middle-income countries.
RODRIGO ALBERTO CARAZO ZELEDÓN, (Costa Rica), speaking on behalf of the Like-Minded Group of Countries Supporters of Middle-Income Countries, said the homogenous designation “middle-income country” oversimplifies the complexities of the countries within this designation and does not reflect the varied situations requiring tailored engagement from the international community. Economic growth alone does not mean advancement towards sustainable development. At all levels of per capita income, developing countries continue to face serious challenges, including obstacles to poverty eradication, inequality, external debt and environmental vulnerabilities. The Like-Minded Group urges the United Nations development system, as part of its reform process, to set forth a comprehensive long-term strategy across the system to coordinate support to these middle-income countries. It is also necessary to lay down a road map, with the Department of Economic and Social Affairs and other relevant organizations, to address the middle-income countries’ most imperative needs as they move to achieve the Goals and other internationally agreed objectives.
Costa Rica emphasizes the importance of knowledge-sharing platforms and the pivotal role of South-South and triangular cooperation for these countries, who play the double role of providers and recipients of these types of cooperation. Regarding ODA and concessional financing, Costa Rica is concerned that the graduation process does not let these types of financing be maintained for countries that shift from one level of income group to another, he said. As these countries’ per capita income increases above low-income thresholds, their access to ODA and external public financing often decreases faster than can be compensated for by increasing tax revenues in per capita terms. The Group stresses the need to increase and ease the access of middle-income countries to development financing and climate finance to support national development plans and development objectives. International public finance is still a powerful tool for complementing these countries’ efforts to mobilize public resources domestically to achieve sustainable development.
VALENTIN RYBAKOV (Belarus) said the meeting represents a breakthrough to help promote the needs of the middle-income countries, which have played a key role in helping achieve the Millenium Development Goals. The interests of the middle-income countries are too frequently sidelined and the organizational system of the United Nations acts in silos and without the cohesion necessary to meet their needs. The United Nations does not have a single approach. He called for a clear application of the Organization’s efforts that do not leave anyone behind. The middle-income countries remain vulnerable to external factors and they need more support from the United Nations system. Belarus advocates for a long-term and comprehensive strategy and welcomes the fact that some organizations within the United Nations system, such as the United Nations Industrial Development Organization (UNIDO), are waking up to the needs of middle-income countries.
SOVANN KE (Cambodia) said the population of middle-income countries represents 93 per cent of the global population and their cooperation with other groups of countries and international development partners is critically important to achieve the Goals and the 2030 Agenda. Cambodia’s pro-growth economic policies and comprehensive reforms have led to impressive achievements. It attained lower-middle-income status in 2016 after strong economic growth of more than 7 per cent over the past decades. Its GDP jumped from $1,044 to $1,427 within the last five years. This sustained economic growth has helped reduce poverty. Despite these achievements, several challenges remain, such as slow diversification of the economy, high logistical costs and a shortage of skilled labour. As middle-income countries begin an industrialization process, it is important to enhance technology cooperation between the North-South, South-South and triangular cooperation. Trade is also important to advance the countries’ social and economic development.
ALI NASEER MOHAMED (Maldives) said middle-income countries make up some of the largest economies in the world and some of the smallest and most vulnerable, such as the Maldives. Their vulnerabilities are manifested in economic, environmental and structural dimensions. The Maldives graduated from the Least Developed Country category in 2011 and when the Assembly made the decision to graduate the Maldives, the country did not meet the threshold for the Economic Vulnerability Index, one of the criteria for graduation. After seven years, the Index for the Maldives has increased. The new Government’s strategy is to build the country’s national resilience to mitigate against vulnerabilities. The country needs international support to create more helpful opportunities and build its resilience by creating a conducive environment to attract investors. This means an environment that is transparent, predictable and governed by the rule of law. International partners can help by extending technical assistance to strengthen the country’s national capacity to create an investor-friendly atmosphere.
MA ZHAOXU (China), associating himself with the “Group of 77” and China, said over the last three years, the middle-income countries have faced developmental challenges that cannot be ignored. Such countries, like any other developing countries, face many challenges, including food security, the changing climate and technological progress. Strong support from the international community is needed for their development. China supports multilateralism and defends the multilateral trading system as well as efforts to safeguard the interests of all.
In closing remarks, Ms. ESPINOSA (Ecuador) said she was grateful to all the delegates for their statements. Statements which could not be given today would be placed on PaperSmart. The session allowed the Assembly to look at the problems faced by middle-income countries as they try to move ahead and develop. The Assembly heard about their needs and the necessity of overcoming the use of a single metric to classify the many different economies. The session laid out the issues the middle-income countries are facing as they try to eliminate poverty and hunger. These issues include the consequences of climate change, their dependence on commodities exports, their vulnerability to foreign exchange rates and capital flows. The Assembly also heard how technological cooperation can serve as a catalyst for inclusive growth.
The Secretary-General will use this valuable information to present a report at the Assembly’s seventy-fourth session, she said. The Organization is committed to developing a comprehensive and cohesive view that helps middle-income countries reduce poverty in all its phases.
Also speaking today were representatives of Saint Lucia, Panama, Cambodia, Peru, Pakistan, Trinidad and Tobago, Colombia, Barbados, China, Romania, Mongolia, Norway and Kyrgyzstan.