UN report calls for overhaul of global financial system

NEW YORK – Sixty-plus international organizations, led by the United Nations and including the International Monetary Fund, the World Bank Group and World Trade Organization, jointly sounded the alarm Thursday in a new report, warning that unless national and international financial systems are revamped, the world’s governments will fail to keep their promises on such critical issues as combating climate change and eradicating poverty by 2030.

In their 2019 Financing for Sustainable Development Report, the international organizations find some good news: investment has gained strength in some countries and interest in sustainable investing is growing, with 75 per cent of individual investors showing interest in how their investments affect the world.

And yet, greenhouse gas emissions grew 1.3 per cent in 2017; investment in many countries is falling; and 30 developing countries are now at high risk or already in debt distress. At the same time, global growth is expected to have peaked at around 3 per cent.

Changing the current trajectory in financing sustainable development is not just about raising additional investment, says the report. Achieving global goals depends on supportive financial systems, and conducive global and national policy environments.

Yet the report warns that creating favorable conditions is becoming more challenging. Rapid changes in technology, geopolitics, and climate are remaking our economies and societies, and existing national and multilateral institutions -- which had helped lift billions out of poverty -- are now struggling to adapt. Confidence in the multilateral system has been undermined, in part because it has failed to deliver returns equitably, with most people in the world living in countries with increasing inequality.

“Trust in the multilateral system itself is eroding, in part because we are not delivering inclusive and sustainable growth for all,” said António Guterres, Secretary-General of the United Nations, in his foreword to the report. “Our shared challenge is to make the international trading and financial systems fit for purpose to advance sustainable development and promote fair globalization.”