Financial and Monetary Systems

No more excuses: Guterres calls for ‘revolution of support’ to aid world’s least developed countries

Leaders at the Fifth UN Conference on the Least Developed Countries.

UN Secretary-General António Guterres is calling for reform of the global financial system. Image: REUTERS

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Financial and Monetary Systems

  • UN Secretary-General António Guterres says the world’s least developed countries (LDCs) are facing crises in a number of areas.
  • He says the global financial system was created by wealthy countries to serve their own interests and is extremely unfair to LDCs.
  • He is calling for system-wide reform, including simplifying access to climate finance and getting multilateral development banks to transform their business models to attract greater flows of private finance to LDCs.

Three years after the world began its epic struggle against COVID-19, the least developed countries (LDCs) – already grappling with severe structural impediments to sustainable development and highly vulnerable to economic and environmental shocks – have found themselves stranded amid a rising tide of crisis, uncertainty, climate chaos and deep global injustice.

Systems are stretched or non-existent – from health and education to social protection, infrastructure, and job creation. And it is only getting worse,” Secretary-General António Guterres told the Fifth UN Conference on the Least Developed Countries, known as LDC5, taking place in the Qatar capital from 5 to 9 March.

He said that the global financial system, created by wealthy countries to serve their own interests, is extremely unfair to LDCs, who must pay interest rates that can be eight times higher than those in developed countries. “Today, 25 developing economies are spending over 20 per cent of government revenues solely on servicing debt,” said the UN chief.

In the face of such deep challenges, the UN chief stated that the LDCs “need a revolution of support” across three key areas.

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‘No more excuses’

First, he said the world’s most vulnerable countries, which have been handed “the rawest of deals”, urgently require support to achieve the Sustainable Development Goals (SDGs).

This includes providing at least $500 billion a year to developing countries, as well as 0.15 to 0.20 per cent of GNI for official development Assistance (ODA) from developed countries. In addition, international efforts need to be made to prevent tax evasion and illicit financial flows.

“No more excuses,” the Secretary-General stressed. “I call upon development partners to support the implementation of these deliverables and achievements of the DPoA targets,” he said, referring to the landmark Doha Programme of Action, which is the blueprint for renewed commitment and engagement between the LDCs and their development partners, including the private sector, civil society, and governments at all levels.

‘A new Bretton Woods moment’

Secondly, the UN chief said, it would be necessary to reform the global financial system through a new Bretton Woods moment.

“This includes expanding contingency financing and integrating disaster and pandemic clauses into debt instruments,” he said. “Multilateral development banks should transform their business models to attract greater flows of private finance into LDCs.”

He added: “We must find new, common-sense ways to measure countries’ economies – such as lending criteria that go beyond gross domestic product.”

Evolution in climate support

The LDCs are particularly vulnerable to the effects of climate change despite contributing only a small amount of greenhouse gases.

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To provide the necessary support, Mr. Guterres urged developed countries to fulfil their $100 billion promise to developing countries, simplify access to climate finance, operationalize the loss and damage fund, double adaptation finance, replenish the UN-backed Green Climate Fund and provide early warning systems to every person in the world within five years.

With these and other vital aims in mind, the Secretary-General told delegates that he will host a Climate Ambition Summit at UN Headquarters in September to move from words to action and “to deliver climate justice to those on the frontlines of the crisis”.

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No more broken promises

“The era of broken promises must end now,” stressed the UN chief. “Let’s put the needs of least developed countries where they belong. First in our plans. First in our priorities. And first in our investments.”

Since the onset of COVID-19, the 46 LDCs have suffered from inadequate resources to fight the pandemic and spiraling debt that has set back their development progress. Despite the vast efforts to address these circumstances, one in three people in LDCs is living in extreme poverty.

“I am confident that we all want to deliver on our promise of achieving the 2030 Agenda and transforming the economies of LDCs,” said Csaba Kőrösi, President of the 77th session of the UN General Assembly in his remarks to the world leaders.

He added: “For that to happen, it is imperative that countries feel real ownership of the DPoA. Development partners should ensure that promises to assist LDCs to overcome their vulnerabilities are fulfilled.”

True partnerships needed

“If we bolster true partnerships, and harness technology, and innovation,” the Assembly President continued, “our goals can still be within reach by 2030,” which will require high-impact decisions and transformative actions.

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This would include focusing on what international finance institutions should focus on, measuring wealth and sustainable development, relying on science in decision-making, mobilizing solidarity, improving standards of governance, and understanding global common goods.

“This progress will not be easy, but I sincerely see no better option for humanity,” said Mr. Kőrösi.

Sheikh Tamim ibn Hamad Al Thani, Emir of Qatar talking at United Nations conference.
The opening plenary of LDC5 was chaired by Sheikh Tamim bin Hamad Al Thani, Emir of Qatar. Image: United Nations.

Host country commitment

The opening plenary of LDC5 was chaired by Sheikh Tamim bin Hamad Al Thani, Emir of Qatar, who announced a $60 million financial contribution towards implementation of the DPoA..

The Gulf State leader reiterated the need for international solidarity in combating crises worldwide.

“There is a moral obligation incumbent upon the rich and developed countries to contribute more to assist the least developed countries to overcome the global challenges we are now dealing with,” the Emir noted.

With the debt crisis a key issue for officials attending LDC5, he called for attention to be paid to its impact on the least developed countries.

“I urge development partners to follow Qatar's example and take the initiative to support the implementation of the Doha Programme of Action as part of our humanitarian and development obligations to the peoples of the least developed countries,” he stated.

The President of Türkiye, the host country of previous UN conference in 2011, and the Prime Minister of Bangladesh also addressed at the opening plenary.

Over the next few days, more than 130 world leaders and heads of delegation will take the floor during the general debate to exchange views on how to collectively address shared challenges and find meaningful solutions for LDCs.

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Marking 50 years of ‘struggle and success’

Immediately following the opening, a commemorative ceremony was held at the Qatar National Conference Centre to celebrate achievements since the creation of the LDC category in 1971 and to renew the commitment to take the currently listed 46 LDCs on a transformative journey towards rapid economic growth and sustainable development.

The UN system’s efforts to reverse the increasing marginalization of LDCs in the global economy and to put them on a path to sustainable growth and development date back to the 1960s. Since then, the UN has paid special attention to LDCs, recognizing them as the most vulnerable in the international community.

By periodically identifying LDCs and highlighting their structural challenges, the United Nations gives a strong signal to the international community to the need of special concessions in support of LDCs.

“The history of the LDCs is not just one of difficulty. It is also a history of human endeavour through adversity. Struggle, and success, against the odds,” said Rabab Fatima, the UN High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS).

“By implementing the DPoA, we can do more to even those odds; to give equal opportunities to all; and to make success easier to come by,” explained Ms. Fatima, who is also the Secretary-General of the LDC5 Conference.

LDC5, she continued, provided a wonderful opportunity to make the aims of the action plan achievable. “Let us all seize the moment and start on that journey, now, here in Doha. A journey from potential to prosperity.”

The event also featured musicians from Yemen and Nigeria, as well as dancers from Tanzania, who presented their own cultural performances, showcasing the diversity and vitality of the LDCs.

Over the next five days in Doha, nearly 5,000 representatives from governments, the private sector, civil society organizations, parliamentarians and young people will assess the implementation of the Istanbul Programme of Action, adopted at a previous UN conference in Türkiye in 2011, and mobilize additional international support and action for the world's 46 least developed countries.

A group of people standing in a line getting ready to cut a ribbon.
The South-South cooperation was celebrated at LDC5. Image: United Nations.

South-South cooperation for LDCs development

The catalytic power of South-South cooperation – which refers to technical cooperation among developing countries in the Global South – to enable transformative development in LDCs was celebrated today on the margins of the Conference.

Two new projects, in Uganda and The Gambia, with a combined value of $3 million, supported by the India, Brazil, South Africa Facility for Poverty and Hunger Alleviation (IBSA Fund), were announced.

In Uganda, the ‘Karamoja greenbelts women-led large-scale farming of cereals, legumes and oilseeds’ project will support the Ugandan Government to address chronic food insecurity in the Karamoja region in a sustainable manner by empowering women and youth through agro-industry.

In The Gambia, the ‘Enhanced Vegetable Production and Processing Project for Rural Women and Youth’ project will aim to improve food security and livelihoods for women and youth through improved agricultural practices and irrigation structures.

“The Gambia has been a strong advocate of South-South cooperation because we know first-hand the impact these projects have on vulnerable communities. The project we are launching today will empower women and youth to produce more and better food, thereby improving nutrition and food security in our country,” said Dr. Mamadou Tangara, Minister of Foreign Affairs and International Cooperation of The Gambia.

Established in 2004, the IBSA Fund has supported 22 projects in 20 LDCs, representing more than 62 per cent of its total resources. The UN Office for South-South Cooperation (UNOSSC) financially manages and supports the implementation of trust funds that facilitate cooperation and the piloting of South-South initiatives around the world and serves as the Trust Fund Manager and Secretariat to the IBSA Fund Board.

“The rich portfolio of South-South cooperation projects presented today is a testament to the transformative impact that can be achieved when developing countries work together and in partnership with the United Nations system.” Dima Al-Khatib, Director of the UNOSSC told UN News.

She added: “We believe in the potential of South-South cooperation and its ability to change the game for LDCs.”

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Financial and Monetary SystemsFuture of the EnvironmentClimate Change
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