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ECLAC - Economic Commission for Latin America and the Caribbean

10/18/2021 | News release | Distributed by Public on 10/18/2021 21:19

Growing Global Asymmetries between Developed and Developing Countries Hinder a Post-Pandemic Recovery with Greater Equality and Sustainability: ECLAC

Presentation by Alicia Bárcena, ECLAC Executive Secretary (PDF).

The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, participated today in a high-level dialogue between the United Nations Regional Commissions and the Second Committee (on economic and financial matters) of the global organization's General Assembly, where she flagged the growing global asymmetries between developed countries and developing nations, above all in terms of access to vaccines and financing, as well as concentration of wealth, income and technology.

"Global economies are facing divergent recoveries from the crisis unleashed by the COVID-19 pandemic. Developing countries are being left behind. The bulk of stimulus and investment is concentrated in developed countries and disparities on climate responsibilities are in front of us," Bárcena stated during the dialogue of the five Executive Secretaries of the Regional Commissions, entitled "Rising global inequalities: turning promises into action," which was focused on follow-up and the pending challenges for achieving the 2030 Agenda's Sustainable Development Goal No. 10: reducing inequality within and among countries.

In her presentation, Alicia Bárcena cited two examples of these global asymmetries: the economic divide and asymmetries related to climate change. "While the United States and Europe spend trillions of dollars and euros on fiscal packages for the recovery that represent around 18% of GDP, the fiscal plans announced in Latin America and the Caribbean have only amounted to 4.3% of GDP (January-June 2021). Meanwhile, our region only emits 8.3% of greenhouse gases. Adaptation is a priority for us, but it is not fully funded," she stressed.

The senior UN official presented seven messages (proposals) for moving towards a more egalitarian and sustainable post-pandemic recovery. First, she stressed the need to achieve a new international financial architecture that would address disparities in access to financing, credit ratings, tax evasion and illicit funding. Second, she called for redistributing liquidity and reforming the international debt architecture through innovative financing instruments such as the Fund to Alleviate COVID-19 Economics (FACE), spearheaded by Costa Rica, and the Caribbean Resilience Fund.

Third, she underlined the importance of fostering solidarity to finance the emergency with taxes on the wealth generated during the pandemic, along with an overhaul of the international tax system and ensuring the fair taxation of multinationals so they pay taxes where value-added is created.

In her fifth message, Bárcena indicated that it is necessary to eliminate corporate tax avoidance, tax havens, and seize stolen assets, which could enhance developing countries' fiscal space. Sixth, with regard to the mechanisms for recovering assets, she mentioned the establishment of new international framework/bilateral agreements with standards for the return process. Finally, the seventh proposal refers to the UN Tax Committee, "which should become an intergovernmental mechanism for addressing international financial and tax affairs with the aim of addressing the asymmetries that affect middle-income countries in particular," she stated.

In reference to the COVID-19 vaccination process, Alicia Bárcena pointed to the disparities in access to vaccines and warned that Latin America and the Caribbean will not be able to vaccinate 70% of its population in 2021, while the acquisitions in some countries exceed their vaccination needs. In this area, she indicated that ECLAC promotes regional cooperation on the production and distribution of vaccines and pharmaceutical products through the implementation of the Plan for Self-Sufficiency in Health Matters, approved in September by the countries of the Community of Latin American and Caribbean States (CELAC).

She recalled that Latin America and the Caribbean is the region in the developing world that has been the most affected by the crisis, "which aggravated structural problems of low productivity and high informality, unemployment, inequality and poverty. In 2021, the region will grow 5.9% thanks to transitory effects on aggregate demand and a statistical rebound, but in 2022 it will return to mediocre growth (2.9%)," she said.

Regarding the debt issue, ECLAC's Executive Secretary warned that developing countries face an important asymmetry in the treatment of their debt. "Latin America and the Caribbean is the most indebted region in the developing world and has the highest debt service (59% of its exports of goods and services)… Developed countries could channel the new Special Drawing Rights (SDRs) that they will not use. A new trust fund to support middle-income countries is needed. SDRs could also be used to capitalize development banks," she explained.

The dialogue was presided over by Ambassador Vanessa Frazier, Permanent Representative of Malta to the UN and Chair of the Second Committee of the 76th session of the UN General Assembly, and it was moderated by Rosa Malango, Director of the Regional Commissions New York Office. Participating in the debate along with Alicia Bárcena were Armida Salsiah Alisjahbana, Executive Secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP); Vera Songwe, Executive Secretary of the Economic Commission for Africa (ECA); Olga Algayerova, Executive Secretary of the United Nations Economic Commission for Europe (UNECE); and Rola Dashti, Executive Secretary of the Economic and Social Commission for Western Asia (ESCWA).

Delegates from various Latin American Member States also spoke during the session, welcoming the seven proposals presented by ECLAC's Executive Secretary at this event and highlighting the initiatives promoted by this organization in the Latin American and Caribbean region, including Ambassador Juan Sandoval Mendiolea, Deputy Permanent Representative of Mexico to the UN and Vice President of the Economic and Social Council (ECOSOC) for the 2020-2021 period; Ambassador Rodrigo Carazo, Permanent Representative of Costa Rica to the UN; and Ambassador Joan Cedano, Deputy Permanent Representative of the Dominican Republic.

The representative of Morocco, Meryem Handouni, also spoke, asking about the south-south cooperation initiatives that are being implemented. In response, Alicia Bárcena highlighted that ECLAC has a specific subsidiary body - the Committee on South-South Cooperation - currently chaired by Costa Rica, which will present a proposal on November 30 to turn it into the Regional South-South Conference in order to broaden participation by incorporating more actors.

She also emphasized that countries have at their disposal the Regional Knowledge Management Platform on the 2030 Agenda in Latin America and the Caribbean (SDG Gateway), which is a south-south cooperation platform of all the United Nations System's agencies, funds and programs, coordinated by ECLAC and the United Nations Development Programme (UNDP), along with the COVID-19 Observatory - which monitors all the economic, social and environmental actions being taken in the region to combat the pandemic's effects - and the Gender Equality Observatory.

In addition, she recalled that just a few days ago the new CEPALSTAT portal was launched, which presents a new interface with open and interoperable formats and which links statistical and geospatial information. For the first time, this portal enables the analysis of economic, social and environmental information, with an emphasis on ecosystems, biodiversity and climate change, to see where the problems are located geographically, Bárcena indicated.