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COVID-19: Act now or risk ‘unimaginable devastation’ globally

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Unless countries across the world act together now, the COVID-19 pandemic will cause “unimaginable devastation and suffering around the world”, UN Secretary-General António Guterres said on Thursday at a virtual high-level meeting on financing for development.

 Painting a picture of 60 million pushed into extreme poverty; famine of “historic proportions”; some 1.6 billion people left without livelihoods; and a loss of $8.5 trillion in global output – the sharpest contraction since the Great Depression of the 1930s – he called for a response with “unity and solidarity”.

“We are asking for immediate, collective action in six critically important areas”, Mr. Guterres said at the online event to leverage more funds for sustainable development.

Beginning with the global liquidity crisis, he said that this was where the health and economic crises meet; “a dangerous nexus that could prolong and deepen both”, calling for extending Special Drawing Rights to supplement public spending reserves.

Noting that the economic fallout from the pandemic threatens a wave of defaults in developing countries, stymieing the effort to reach the 2030 SDGs, the UN chief’s second call was for “durable solutions on debt, to create space for investments in recovery and the Sustainable Development Goals”.

Next, he urged private creditors holding a growing share of developing countries’ sovereign debt to find incentives to encourage more creditors to provide debt relief.

Mr. Guterres then drew attention to external funding, saying that aligning incentives in global financial systems with the SDGs would boost confidence “to relaunch investment in sustainable development”.

Turning to illicit financial flow, such as tax evasion and money-laundering, which deprive developing countries of hundreds of billions of dollars annually, he said that “we must plug the leaks” by revising national systems and international frameworks.

The UN chief’s final point was the overarching need to “recover better” from the ravages of the coronavirus pandemic.

Stay the development course

COVID-19 has exposed and is exacerbating deep inequalities and injustices that need to be tackled, including for women, who, with typically fewer savings and lower incomes, experience economic impacts worse than men.

“All our efforts must go towards building sustainable and resilient pathways that enable us not only to beat COVID-19, but to tackle the climate crisis, reduce inequality and eradicate poverty and hunger”, underscored the UN chief.

He upheld that we must face these challenging and the corresponding dangers, with “all urgency, seriousness and responsibility”.

“Getting through COVID-19 and recovering better will cost money. But the alternative will cost far more”, concluded the Secretary-General. “This is a global crisis, and it’s up to all of us to solve it”.

New financial architecture

Even before COVID-19, financial constraints posed challenges for developing countries to meet the SDGs. Today, economic and financial shocks triggered by the coronavirus have left many struggling to respond to the pandemic and its social and economic consequences.

President of the General Assembly, Tijjani Muhammad-Bande, maintained that to achieve the SDGs by 2030, “we have to rethink our economic systems”, requiring “leadership, political will and collaborative efforts among a wide variety of actors to safeguard the future for generations to come”.

He highlighted the need to mobilize public, private and external financial resources, for both rapid recovery and for longer-term progress in achieving the 2030 development agenda.

Noting that many developing countries are financially ill-equipped to halt the spread of COVID-19 as well as its social and economic consequences, the Assembly president maintained that “concrete proposals and timely action” were needed to prevent them from “sliding into disorderly defaults”.

“Now is the time to revise the international financial architecture”, he said, arguing that plans must “not only address current liquidity shortages, but also provide durable solutions that create vital fiscal space for investments in sustainable development for countries in need”.

Mr. Muhammad-Bande stressed that COVID -19 and its related economic and social fall-out cannot be addressed in a vacuum, but instead integrated into broader discussions on financing for sustainable development.“The United Nations provides us with a forum to convene all actors and specialised policy communities to address these challenges”, he reminded the meeting.

Our interconnected world

Prime Minister of Canada, Justin Trudeau, called the pandemic “a stark reminder” of how interconnected our world has become, spelling out that “to keep our citizens safe and healthy, we must defeat COVID-19 wherever it is found”.

This requires a global, coordinated plan that will also facilitate global and domestic economies to bounce back.

Jobs and businesses in every country depend on “the health and stability of economies elsewhere” – all of which is hinged on the success of the global economy in weathering this storm, said the co-convener of the high-level summit.

“COVID-19 is an unprecedented challenge for our modern world, but it’s also a unique opportunity to build a better future, to create a safe and prosperous world”, he added.

‘Wake-up call’

Sharing the gavel, Andrew Holness, Prime Minister of Jamaica, called the pandemic “a wake-up call” for the international community to reinvigorate a comprehensive system of global economic governance “that can cope with global disruptions while promoting inclusive development”.

He said a big challenge for the international financial system, was to channel public and private credit flows, into productive, inclusive developmental capital flows:

“The work streams on global liquidity and financial stability as well as debt vulnerability, should inform our response to the financial dimensions of this crisis”, endorsed the Jamaican Prime Minister.

Global response actions

•    Safeguard development gains by expanding liquidity in the global economy and maintaining financial stability.  
•    Save lives and livelihoods of people worldwide by addressing debt vulnerabilities for developing countries.  
•    Create a space for private sector creditors to engage in timely solutions.
•    Enhance external finance for inclusive growth and job creation.
•    Prevent illicit financial flows by expanding fiscal space and fostering domestic resource mobilization.
•    Align recovery policies with the Sustainable Development Goals (SDGs) to ensure a sustainable and inclusive recovery.

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Africa Today

Burkina Faso ‘one step short of famine’

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In Burkina Faso, the number of people facing a critical lack of food has increased. UNOCHA/Giles Clarke

Unless access is urgently granted to humanitarian organizations, thousands in the Central Sahel will be “pushed into further destitution”, the UN emergency food relief agency warned on Monday.  

Ahead of Tuesday’s High-Level Ministerial Conference on the Central Sahel in the Danish capital Copenhagen, the World Food Programme (WFP) sounded the alarm that catastrophic levels of hunger could hit parts of Burkina Faso, Mali and Niger.  

‘Tragic’ food insecurity spike 

Violence and insecurity have pushed 7.4 million people in the Central Sahel region of West Africa into acute hunger, according to WFP. 

Additionally, the number of internally displaced people has risen from 70,000 two years ago to nearly 1.6 million today – including over 288,000 in Mali, more than 265,000 in Niger and over one million in Burkina Faso, which is now home to the world’s fastest growing displacement crisis. 

“When we can’t get to vulnerable communities, we’re seeing tragic spikes in food insecurity”, said Chris Nikoi, WFP Regional Director for West Africa.  

He explained that “dreadful violence and conflict” in parts of northern Burkina Faso have left over ten thousand people there “one step short of famine”.  

“The world cannot wait to take action until children, women and men have died”, stressed the WFP official. 

Food deliveries on the way 

As the delivery efforts of humanitarian organizations have been jeopardized by worsening conflict and insecurity, life-saving assistance to the neediest communities has become inaccessible. 

Moreover, aid workers are increasingly targeted by non-State armed groups in Burkina Faso, Mali and Niger.  

WFP, which was recently awarded the 2020 Nobel Peace Prize, is urging conference participants to find ways for organisations to engage with communities and all actors on the ground to open safe passageways for humanitarian assistance to reach those in need.  

A worrying outlook 

Meanwhile, in response to the deepening crisis and growing needs, WFP has continued to ramp up lifesaving assistance, reaching more than 3.4 million people in August alone.  

In scaling up to meet the growing needs in Burkina Faso, WFP worried about its financial outlook.  

The UN agency has already been forced to reduce rations from July and risks, by next month, a break for emergency assistance to displaced people who – having fled their homes, farms and jobs – have no other options. 

Building resilience   

At the same time, WFP is working to strengthen resilience-building support for at-risk communities.  

Its interventions include rehabilitating community assets, improving degraded land, feeding students, and community-based nutrition activities, to prevent and treat malnutrition.  

Since 2018, more than one million people have benefitted from WFP’s integrated resilience activities in Niger, Mali and Burkina Faso. 

Humanitarian event 

The UN is co-hosting the conference in Denmark along with Germany and the European Union. 

It will feature on Tuesday, a ministerial round table that follows up on a virtual 8 September meeting, focused on forward-looking plans relating to humanitarian action, development and peace efforts, among other things.

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Africa Today

EU steps up support for Africa’s Central Sahel countries

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European Union, Denmark and Germany and the United Nations co-host a virtual Ministerial Roundtable on Africa’s Central Sahel region, with the participation of donors and international organisations, as well as the countries concerned: Burkina Faso, Mali and Niger. The event will discuss longer-term perspectives for countries in the region to overcome the spiral of violence and humanitarian crises they are currently facing. It also aims at mobilising support for the region, especially as coronavirus pandemic increases humanitarian needs.

Representing the EU at the event, Janez Lenarčič, Commissioner for Crisis Management, will pledge a total of €43.6 million on behalf of the EU to the three countries in the Central Sahel region for the rest of 2020.

Janez Lenarčič, said: “Throughout recent years, the EU has been particularly committed to the Sahel and international support provided has been significant. Yet, the security, social and humanitarian situation in Central Sahel is only deteriorating. In face of this dramatically worsening situation, together – the international community and the governments concerned – we must do better, more and act fast. Only by addressing the deep-rooted causes can we succeed in providing a better life to the people caught in the crises afflicting the region.”

Jutta Urpilainen, Commissioner for International Partnerships said: “Today’s conference is a very clear sign of our solidarity towards the Sahel region and its people. Our €20 million support to the World Food Programme will help the most vulnerable in Burkina Faso, Mali and Niger, and especially pregnant and breastfeeding women and young children. We hope to assist 65,000 people next year with this project. If we all join forces along the peace-development-humanitarian nexus and our partner countries take responsibility for improving governance and reforms, I am convinced that we can make a difference for the people in the Sahel. Team Europe will keep on supporting the people of Sahel.”

The EU’s pledge consists of:

  • €23.6 million in funding for humanitarian actions in Burkina Faso, Mali and Niger.
  • €20 million in development funding to address the food crisis afflicting the Central Sahel region, in cooperation with the World Food Programme.

Overall, EU and the EU Member States have mobilised around €8 billion since 2014 to help stabilise the Sahel region.

Background

Burkina Faso, Mali and Niger are at the core of one of the world’s fastest growing humanitarian crises created by a combination of conflict, climatic changes and poverty. It is estimated that a staggering 13.4 million people across the Central Sahel are in need of humanitarian assistance.

In 2020, the EU has mobilised a total €84.6 million in humanitarian assistance for Central Sahel countries, including the amount that will be pledged today. In June 2020, the EU also organised two EU Humanitarian Air Bridge flights to Burkina Faso, carrying 26 tonnes of humanitarian supplies and equipment needed for the coronavirus response in the country.

Since 2014, the EU has invested more than €3.4 billion in development cooperation for the three Central Sahel countries Burkina Faso, Mali and Niger, with the objective to strengthen the capacities of the state in the long term, while providing a short and medium-term response to the needs of the most vulnerable population. The investments covered a broad range of areas: from security; good governance; transparency; public finance; the respect of human rights to basic social services (education, food security and health).

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Lao PDR: Poverty Continues to Decline but Progress under Threat

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Lao PDR has made remarkable progress in reducing poverty over the past 25 years, with the proportion of the population living in poverty falling by more than half, from 46 percent in 1993 to 18 percent in 2019. The finding comes from two reports just released by the Lao Statistics Bureau and the World Bank. But the good news comes with a caveat: some of the gains made against poverty could be erased by the impact of the COVID-19 pandemic on the Lao economy.

The Poverty Profile in Lao PDR is based on the latest Lao Expenditure and Consumption Survey (LECS), carried out nationwide in 2018-19. The report was launched along with the Poverty Assessment 2020: Catching Up and Falling Behind, which analyses thesurvey data in more depth and explores the factors behind emerging trends. Data from the LECS shows that the national poverty headcount rate declined by 6.3 percent over six years, from 24.6 percent in 2013 to 18.3 percent in 2019. This means, however, that almost a fifth of Lao people are still living on incomes below the 2019 national poverty rate of 9,364 kip (US$1) per day.

Rising farm incomes and remittances have helped people in different parts of the country escape poverty”, says Mme Phonesaly Souksavath, Head of the Lao Statistics Bureau. “Rural areas have narrowed the poverty gap with urban areas, where poverty has fallen less quickly. Poverty declined notably in the south, thanks to cash crop production, and in the north, where employment opportunities have become more common”.

At the same time, several factors have slowed down poverty reduction in different regions, with a scarcity of jobs outside the agricultural sector leading to an overall increase in inequality. Wages have increased by almost 60 percent for those with jobs, but many people have not been able to access the opportunities provided by employment. This is especially true in the central provinces, where poverty reduction has stalled.  

“The data shows that most of the families under the poverty line share one or more characteristics: their head of household is from an ethnic minority group, has a low level of education, or has no access to employment,” says Nicola Pontara, World Bank Country Manager for Lao PDR. “Government policies have helped narrow geographical income gaps. However, not enough jobs are being created to distribute the benefits of economic growth equitably”.

According to both the Statistics Bureau and the World Bank, the economic effects of COVID-19 pose a severe challenge to efforts to end poverty in Laos. The pandemic has brought an unprecedented employment shock, putting pressure on an already-weak job market. At the same time the return of migrant workers, particularly from Thailand, has led to a substantial fall in remittances. The Poverty Assessment report estimates that poverty will increase by 1.4 to 3.1 percent in 2020, compared to the 0.6 percent decline that would have been expected with no COVID-19. Given these challenges, a broad set of interventions, targeting different groups of the poor, will be required to restore poverty reduction momentum in Lao PDR.

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