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The major UN General Assembly meeting has a significant goal, and it’s to find innovative and practical solutions to bridge the growing gap between the rich and the poor. Addressing global inequality has been a pressing issue, and international cooperation is essential to tackle it effectively.
The UN Department of Economic and Social Affairs, responsible for SDG financing efforts, highlights the urgency of the situation, stating that there is a window of opportunity if action is taken now. Of course, acting promptly is crucial, and it’s encouraging to see the UN emphasising this.
Many developing countries are struggling with severe debt problems, and shockingly, one in three countries worldwide is at high risk of facing a fiscal crisis, according to the UN. Amidst this crisis, non-essential industries such as iGaming are booming. If you check the recent list of new online casinos that launched, it’s clear that world leaders may be missing the big picture.
This also highlights the financial challenges that many nations are confronting, which can hinder progress on Sustainable Development Goals (SDGs) in the long run.
The countries in question struggle to invest in SDG progress when they are burdened by exorbitant borrowing costs. More often than not, they end up paying more on debt servicing than on critical sectors like health and education.
This undercuts the need for sustainable financing solutions to empower these countries to invest in their future.
Warns about the debt trap
UN Secretary-General António Guterres also warns about the debt trap developing countries face, with borrowing costs significantly higher compared to developed nations. Guterres’ emphasis on the debt trap draws attention to a critical issue affecting vulnerable economies.
It’s surely disappointing to see that over 40% of people living in extreme poverty live in countries dealing with severe debt challenges. This statistic highlights the link between financial stability and poverty reduction across the board.
This year’s High-level Dialogue took place at a crucial moment in the world economy, with only about 15% of SDGs being met. The slow progress towards the SDGs is an alarming reminder of the work that world leaders must complete.
While there has been progress across various aspects of the Addis Ababa Action Agenda, the financing commitments associated with it have largely gone unfulfilled. Meeting financial commitments is pivotal to achieving the SDGs, and the international community must step up its efforts.
Amid challenging economic prospects due to the COVID-19 pandemic and its aftermath, global conflicts such as the Ukraine v. Russia war and worsening climate change effects such as wildfires and heat waves have been hindering SDG goals and the financing behind them.
UN Secretary-General Guterres rightly emphasises that scaling up SDG financing requires innovative approaches, bold policy decisions, and new funding sources. He believes innovation and creativity in financing mechanisms are essential for progress.
States show support
The good thing is that most of the member states have shown support for the proposal of an SDG Stimulus of at least $500 billion per year by Mr. Guterres. The stimulus is to boost affordable, long-term development financing is crucial. This might seem ambitious, but these types of funding initiatives are essential to drive progress on the SDGs.
Deeper and longer-term reforms to the international financial architecture are also necessary to address inequalities and better serve all nations. The UN chief adds, “It is clear that the systemic problems of financing for sustainable development require a systemic solution: reforms of the global financial architecture. Together, we must turn this moment of crisis into a moment of opportunity, find joint financing solutions to rebuild global solidarity, and create new momentum for sustainable development and climate action.”
Reforming, or at least the will to reform the global financial system, is a substantial step toward equitable development. A collective effort is needed to reshape the world’s financial systems for a more equitable and sustainable future.
