The Covid-19 pandemic could derail the UN’s Sustainable Development Goals (SDGs), warns Sarvjeev Sidhu, head of emerging markets strategy at Aegon Asset Management.
The pandemic has been catastrophic for developing nations, leaving the UN’s SDGs a long way from being achieved in the timeframe initially agreed by participant nations, according to Sidhu.
Sidhu says: “The global recession has pushed millions already struggling into extreme poverty. The economic and human development impact on the world’s poor and low-income developing countries is sub-Saharan Africa and South Asia has been particularly harsh.
“This has put the 2030 sustainable development goals and targets out of reach in many poor and developing economies.
“One of the biggest fallouts has been the inadequate policy response to the Covid-19 pandemic. The unequal access and availability of Covid-19 vaccines has led to social and economic hardship – poverty, inequality, food inflation, malnutrition. Rising unemployment also risks social unrest and human development.”
The situation has been exacerbated by the vast difference in fiscal response between developed and emerging economies, with developed economies spending approximately 28% of GDP compared with about 9% for emerging and low-income developing ones.
Before Covid-19, around four million people had no safety net to protect against economic and healthcare vulnerability, risk or deprivation. However, fiscal spending has been re-prioritised for healthcare and economic support, taking away from key SDG spending, says Sidhu.
However, Sidhu believes the World Bank and IMF’s initiative with G20 countries to establish a debt service suspension initiative (DSSI) offers some hope.
In total, 73 countries are eligible for a temporary suspension of debt-service payments owed to their official bilateral creditors. The G20 has also called on private creditors to join in the initiative.
Sidhu adds: “Equitable access Covid-19 vaccines facilitated by the World Health Organization under COVAX, particularly protecting those most-at-risk is the only way to mitigate the public health and economic impact of the pandemic.
“The DSSI and historic IMF Special Drawing Rights – equivalent to $650 billion of supplemental official reserves of its member countries – will help millions who have been denied the opportunity to lead a dignified life exacerbated by the pandemic.
“Effective public health and fiscal policy will give humanity a chance to get back on the road to 2030 Agenda.”