COVID 19 has hit the global economy so hard that it has thrown more than 100 million people into extreme poverty.
Given this, the most recent study by the International Monetary Fund (IMF) has proposed a framework for developing countries to evaluate policies that can accelerate their long-term growth and thus mobilize a greater amount of income.
To meet the Sustainable Development Goals, countries will need very ambitious reform agendas, write four experts.
Experts indicate that to meet the Sustainable Development goals, these nations must take on more ambitious reform agendas.
The impact of the pandemic on the less favored classes has been very severe in the last year causing levels of poverty never seen in the last three decades.
This crisis has diverted the path achieved from basic development goals, as developing countries must now balance their low incomes between immediate spending that protects lives and the means of survival with long-term investments in health, education, food, and health. infrastructure.
In its proposal, the IMF suggests creating an environment for developing countries to evaluate policies that can make them grow over time, move their income, and attract private investment to help them achieve their Sustainable Development goals.
However, even with ambitious internal reforms, these regions require extraordinary support from the international community that involves private donors, official donors, and foreign financial institutions.
In 2000, the world’s foremost leaders agreed to end poverty and create a path of opportunity for all. These stipulations are still anchored in the Sustainable Development Goals that were set for 2030, representing a shared plan for peace and prosperity.
Until recently, these low-income countries progressively developed to achieve measurable success in eliminating poverty and child mortality. COVID 19 stopped that by reaching contagion rates exceeding 150 million people, plunging the planet into a deep recession.
The International Monetary Fund has had to finance 86 countries worth 100 trillion dollars, including 52 low-income recipients due to the pandemic. In addition, it has developed a macroeconomic tool to evaluate strategies that finance development, focused on investment for health, education, roads, water, and sanitation, leading areas in all government budgets.
This mechanism has been applied to 4 countries: Cambodia, Pakistan, Nigeria, and Rwanda, which need annual financing of 14% of the Gross Domestic Product to achieve their Sustainable Development goals by 2030. This represents 2.5% per year above the pre-pandemic level.
Taking the challenge
How can developing countries thrive in such difficult circumstances?
Following an agenda of reforms that prioritize the following points:
Encourage growth. It is vital to implement structural reforms that improve macroeconomics, the quality of institutions, governance, and financial inclusion. This will result in the generation of additional resources for the economic development of nations.
The growth of Nigeria and Pakistan has enabled them to make great strides in reducing poverty. In the same way, the collection of taxes for the payment of basic services, necessary to achieve the key development objectives, should be strengthened.
Effectively improve spending. About half of public investment for developing countries is wasted. By improving efficiency through transparent financial management, more will be achieved with less.
Catalyze private investment. Strengthening the institutional framework through a strong regulatory environment will help catalyze additional private investment. Rwanda was able to increase private investment in the water and energy sectors to more than 1.5% of GDP per year since 2017.
The international community must step forward. If partners in low-income countries increase their aid to achieve 0.7% of gross national income, these nations may still be able to meet their Sustainable Development goals by 2030.
From eSmart Recycling we invite powerful governments to protect those territories that are still developing. The indebted nations do not benefit anyone because the first thing that is compromised is their fundamental rights such as health, food, and education. We echo the words of the American economist Joseph Stiglitz: “The only true prosperity is shared prosperity.”
Carmen Maria Cermeño