UN report warns against backsliding in financing for development amid COVID-19

A UN report has warned against backsliding in financing for sustainable development amid the COVID-19 pandemic and called for remedies.

The economic and financial shocks associated with COVID-19, such as disruptions to industrial production, falling commodity prices, financial market volatility, and rising insecurity, are derailing the already tepid economic growth and compounding heightened risks from other factors, according to the report released by the UN Department of Economic and Social Affairs on Thursday.

Those factors include the retreat from multilateralism, discontent and distrust of globalization, heightened risk of debt distress, and more frequent and severe climate shocks, said the report.

Together, these make sustainable finance more difficult and further undermine the ability to achieve the Sustainable Development Goals (SDGs) by 2030, it said.

The report called on governments, businesses and individuals to act urgently to arrest the backsliding and change the trajectory.

The global community must come together and take concerted, forceful, and swift action to combat the impact of COVID-19, maintain economic and financial stability, promote trade and stimulate growth, it said.

Policy responses need to be designed to help those most in need so that the burden does not fall on those least able to bear it. Donors should immediately reverse the decline in official development aid, particularly to least developed countries, said the report.

Official bilateral creditors should immediately suspend debt payments from least developed countries and other low-income countries that request forbearance, and other creditors should consider similar steps or equivalent ways to provide new finance. Financial instruments should be implemented and utilized to reduce climate risks and raise resources for SDG investments, it said.