Developing nations face fragile economies and the global financial system must foster integral human development, said Archbishop Bernardito Auza on October 11, 2018.
Archbishop Auza, Apostolic Nuncio, Permanent Observer of the Holy See, made his comments during the Seventy-third Session of the United Nations General Assembly, Second Committee Agenda Item 18: Macroeconomic policy questions and Agenda Item 19: Follow-up to and implementation of the outcomes of the International Conferences on Financing for Development, at the United Nations in New York.
Referring to recent UN reports on macroeconomic policy, he pointed to “two sobering realities of the current global environment”:
- For most developing countries, there is a basic fragility with regard to the positive economic growth trends experienced in 2017, which they believe could be quickly reversed.
- The Least Developed Countries (LDCs), including small island States, remain particularly vulnerable to downturns in the global financial environment, as well as to the effects of climate change.
The Archbishop’s Full Statement:
The Secretary-General’s recent reports on a number of macroeconomic policy questions, covering international trade, the pursuit of a stable international financial system, and issues affecting external debt stability, support our collective efforts to achieve the outcomes agreed to at the international conference on Financing for Development, in Addis Ababa in July 2015.
In particular, these reports highlight two sobering realities of the current global environment. First, for most developing countries, there is a basic fragility with regard to the positive economic growth trends experienced in 2017, which they believe could be quickly reversed. Second, the Least Developed Countries (LDCs), including small island States, remain particularly vulnerable to downturns in the global financial environment, as well as to the effects of climate change. In this regard, concrete steps should be taken to reduce these vulnerabilities in order to prevent these countries from being left further behind in pursuit of the Sustainable Development Goals (SDGs).
The report on international trade and development identifies a number of concerns that could jeopardize the achievement of key SDGs, in particular, SDG 17, which aims to strengthen global partnerships to help to achieve sustainable development. For LDCs, this goal calls for a doubling of exports by 2020 and, more generally, for improving market access for LDCs exports. Despite a rebound in trade growth in 2017, the report indicates not only are these SDG targets at risk but also that the multi-trading system remains under threat from strong protectionist pressures.
For these least developed countries, most of which are dependent on commodity exports for their foreign exchange earnings, structural changes will eventually be needed to reduce their vulnerability to external price shocks; such changes, however, will take time. In the meantime, their lack of access to international markets will continue to be a barrier to increased export earnings. In this regard, SDG 17.12 calls for duty- and quota-free market access for the least developed countries. In addition, non-tariff measures such as logistics, connectivity, and trade facilitation are also barriers to increasing exports and need to be addressed. The United Nations system has been an influential stakeholder in the multilateral trading system, a system that has worked particularly well for the benefit of weaker and more vulnerable economies.
The Secretary-General’s report on the international financial system places particular emphasis on the need for strengthened international cooperation, which it views as critical to ensuring a stable and sustainable financial system. The same report also notes that developing countries remain particularly exposed to sudden changes in financial markets and to the volatility of private capital flows and that the national policies of developing countries need to be supported by an international enabling environment.
In this regard, the promotion of integral human development requires a financial paradigm shift. The financial world has to learn from the lessons of the most recent financial crises and to acknowledge that markets cannot guarantee true progress without incorporating those values that foster integral human development, social inclusion and equity. Indeed, market forces cannot adequately safeguard common goods such as decent jobs and the environment. The financial crisis of 2007-08, in this sense, provided an opportunity to reform the economy and make it more attentive to ethical principles, such as new ways to regulate speculative financial practices and virtual wealth.
A response to macroeconomic vulnerabilities needs different criteria from those ruling the current financial world. This means a change in the way of doing business, which in turn will alter the way of doing politics, for which a change in our lifestyles will also be required. In the words of Pope Francis, “Many things have to change course, but it is we human beings above all who need to change.” Faced with the magnitude and pervasiveness of today’s economic-financial systems, some could be tempted to give in to cynicism and resign themselves to thinking that with limited resources and strength we can do very little. In reality, we can do so much together, especially if we work together.
Thank you, Mr. Chair.
3. Pope Francis, Encyclical Letter Laudato Si’, 202.
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