Daily Times

Highlighting the “pervasive” development crisis – famine, poverty, and inequality- Pakistan on Tuesday called for enhancing the quantity, quality, and accessibility of the Multilateral Development Bank’s lending as part of a plan of action to deal with the situation.

“Geopolitical tensions and new protectionism are fragmenting trade networks and disrupting the world economy,” Ambassador Munir Akram, permanent representative of Pakistan to the UN, told the UN General Assembly’s Second Committee (Economic and Financial), which began its general debate on Monday.

“Sixty countries are in debt distress; climate impacts are growing and the digital divide may become a new development divide,” he said.

In this context, Ambassador Akram said, the international community’s endeavor must be to muster the political will to achieve agreement on the plan of action for development which can be adopted at the Fourth International Conference on Financing for Development (FfD-IV) which will take place in Spain in July next year, hoping for the plan to be implemented in “good faith.”

The Pakistani envoy also proposed the revival of foreign direct investment, which fell by 26% in 2023, so as to help developing countries formulate viable and bankable projects.

On its part, he said, Pakistan will press for the establishment of a UN mechanism to facilitate public and private investment in sustainable infrastructure in developing countries.

In addition, participants at the FfD-IV should reach agreement on a concrete time-bound roadmap for the fulfillment of the developed countries’ 0.7% of GNI ODA (Gross National Income, Official Development Assistance) commitment. “We should also define ODA – we cannot count climate finance, humanitarian aid, refugee costs, student costs, COVID-19 vaccines, etc. as ODA.”

Also, at FfD-VI, an agreement on new sovereign debt architecture must be evolved, as 58 countries need to get out of the debt trap – which Prime Minister Shehbaz Sharif has called a “death trap”.

“Debt relief and restructuring should be fair, fast, and comprehensive,” Ambassador Akram said, emphasizing the need to bring down borrowing costs for developing countries. Currently, he said, developing regions borrow at rates that are 6 to 12 times higher than those of some European countries, mainly due to poor credit ratings.

“We must fix this unequal system through dialogue with credit rating agencies; and/or by establishing a public credit rating agency.”

Underscoring the need for Climate justice, he urged scaling up adaptation finance beyond just doubling and ensuring adequate capitalization and early operationalization of the Loss & Damage Fund.

On Trade, he said, new ‘environmental’ protectionism, such as the border carbon tax, must be resisted, and preferential treatment for developing countries enlarged.

Technology should be a “global public good”, Ambassador Akram said.

“We must reach agreement on new Intellectual Property Flexibilities and implement the agreements in the Global Digital Compact on Artificial Intelligence, including the possibility of an AI capacity building fund.”

Also, the Pakistani envoy said, “We should translate the endorsement of the Secretary-General’s SDG (Sustainable Development Goals) Stimulus proposal into action through an inter-governmental process at the UN.”

Pakistan, he added, will work with the African Group on its proposal to secure approval for the conclusion of an international tax treaty negotiated within the United Nations.

The Pakistani envoy also called for implementing the agreement to re-channel 50% of the 2021 SDR (Special Drawing Rights) allocation to development before the FfD-VI Conference, including through Multilateral Development Banks, while underscoring the need for a concerted effort to convince some major central banks that are blocking this avenue for development finance.