New Social Contract, Climate Action Deal Key for Putting Global Economy on Sustainable Path Benefiting Everyone, Secretary-General Says at Economists Round Table

Following are UN Secretary‑General António Guterres’ opening remarks to the third round table of renowned economists on “Rebirthing the Global Economy”, held today:

Welcome to this third round table on “Rebirthing the Global Economy to Deliver Sustainable Development for All”.

Now, we launched these discussions to bring new ideas, fresh thinking and different perspectives to the table.  Over these past months, we have greatly benefitted from the insights of distinguished women economists on debt, trade, finance, climate and decent jobs.  This is critical as we face not only an unprecedented crisis — but also the opportunity to make real, foundational, and necessary change.

The challenges loom large.  Much more than 1 million people have died from the COVID‑19 pandemic.  More than 100 million people are being pushed into extreme poverty.  Hunger has doubled.  Famines loom, inequalities are growing.  Disruption to education is risking to create a “lost generation”, especially for children trapped on the wrong side of the digital divide.  And even the gender equality gap is widening, and women’s labour force participation — a key driver for inclusive growth — has been set back decades.

Now as we face an urgent need for climate action and building a sustainable and circular economy, we need to do different and let’s recognize that developing countries, in particular, are on the precipice of financial ruin.

So, we need global solidarity and global coordination.  Since day one, as you know, I’ve pushed for a massive rescue package equivalent to at least 10 per cent of the global economy.  Now, the truth is that developed countries have been able to do it by themselves with their own resources but the same is not happening in support to the developing world.

Two days ago, again, at the G20 Summit, I issued an SOS for the needs of developing countries.  Of course, economic progress rests on halting the further spread of the pandemic.  And so, vaccines, tests and treatments must be global public goods, available and affordable for all.

And this is now recognized and I’ve been urging leaders to fully support and to fund the efforts.  But we still have a gap — a gap in the COVAX facility, a gap of $28 billion and until the end of the year, a gap of $4.2 billion in order to make, indeed, this new vaccine a global public good, a people’s vaccine able to be affordable and available to all.

We also must mobilize the financing to build forward and put economies on a sustainable path.  As you know, in May, I convened together with the Prime Ministers of Canada and Jamaica that lead the Group of Friends for Sustainable Development Financing, we gathered about 50 Heads of State and Government to focus exactly on financing for development in this era of COVID‑19 and beyond.  An array of concrete policy options has been put forward by six working groups that have worked for several months and we need those proposals to be taken into account by decision‑makers and we need a coordinated and multilateral response to provide the necessary liquidity and tackle the debt emergency in the developing countries.

As a matter of fact, there has been a huge increase in liquidity in the world but that liquidity has benefitted developed countries, it has benefitted middle‑income countries with good access to financial markets that have good fundamentals, but for least developed countries and even other developing countries and some middle‑income countries, that liquidity is still not enough, it has not really reached them sufficiently.

And so, we need to strengthen the firepower of the International Monetary Fund (IMF) and other international financial institutions to support the developing world.  I’ve been asking for a new issuance of Special Drawing Rights (SDRs) and the reallocation of unused SDRs and also to broaden the eligibility of the G20 debt initiatives to make sure that they are able to achieve all vulnerable developing countries, and even some middle‑income countries that badly need it.

Building a global architecture to enhance debt transparency and sustainability, as I proposed to the G20 back in April, is essential.  We need to align all recovery efforts with the 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change.

We are having some problems.  If one looks at the money that is being spent in recovery of the different economies, there is still more money being given to fossil fuels than to renewable energy.  Which means that we are still not exactly on track with what we usually say about sustainable and inclusive recovery.

But fortunately, there is also some good news.  A growing number of countries have pledged carbon neutrality by 2050, China has done so before 2060 and I believe that in the beginning of next year, now with the change in the United States Administration, countries representing more than 65 per cent of global emissions — and more than 70 per cent of the world economy — may have commitments to carbon neutrality.

And so, it is the moment to have a quantum leap, to have a global coalition for net zero greenhouse gas emissions — and act now to integrate the goal of carbon neutrality into all economic and fiscal policies.

And also to make sure that we create conditions for every city, every region, every company, every bank, every country to have a transition plan for net‑zero [emissions] in order to reach a global net‑zero [emissions] in 2050 for our world as a basic condition to limit the temperature growth by 1.5 degrees at the end of the century.

And, of course we need to implement also necessary measures — in protection, in reskilling — for a just transition towards good, new green jobs.   Everything has a cost and the change to the green economy also has a cost.  We need to prove that we care for those that will be impacted by the move from the brown to the green economy and that we have solutions also for that.

And of course, we need to scale up investment in the care economy that also places value on the essential work that has become so clear in these past months.  As you know, I have been pushing for a New Social Contract at the national level with a strong emphasis on education, as the main equalizer, access to the new digital economy, again, if properly done as a central equalizer, a new generation of social protection measures, and also of measures related to fair labour markets.

We also need a New Global Deal at the international level.  Power, resources and opportunities must be better shared at the global level — and governance mechanisms must better reflect the realities of today.  If you look at the Security Council of the United Nations or even at the Bretton Woods Institutions, it is clear that participation and voting powers are still much more linked to what we were in the past than with the geostrategic and economic realities of today’s world.

And at the same time, we need to integrate the principles of sustainable development into all decision-making.  I am looking forward to hearing your proposals and ideas on the way ahead.  On shaping this New Social Contract and New Global Deal.  And on making sure that the rebirth of the global economy is done in a way that delivers sustainable development and inclusive development for all.

Thank you very much and my strong, strong wishes for a very productive debate.