Though some countries are reopening their economies, the recovery will be protracted and uneven. The IMF expects that the global economy will shrink to 4.9 percent this year, due to enhanced workplace safety requirements, voluntary social distancing, business closures, job cuts etc
This year marks the start of the Decade of Action for the UN Sustainable Development Goals (SDGs). The novel coronavirus Covid-19 is wreaking havoc, with over 10 million people infected globally and loss of half million human lives so far. Weak health care systems, prevalence of poverty, lack of education and the sub-optimal global cooperation has re-enforced the urgent need for global action to end poverty, save our planet and build a fairer world. The global pandemic challenges can be effectively solved through implementation of the SDGs, the global blueprint to protect our precious planet.
The International Monetary Fund (IMF) has described the pandemic scenario as the most severe economic contraction since the Great Depression. Though some countries are reopening their economies, the recovery will be protracted and uneven. The IMF expects that the global economy will shrink to 4.9 percent this year, due to enhanced workplace safety requirements, voluntary social distancing, business closures, job cuts etc. It projects 5.4 percent global growth in 2021 – far below its pre-pandemic projection.
Cumulative loss of total output for the global economy in 2020 and 2021 has been calculated at $12 trillion. The Asian Development Bank (ADB) expects global losses ranging from $77 billion to $347 billion. UNCTAD estimates that the lost output will be in the order of $1 trillion. Bloomberg expects this to be $2.7 trillion. The ILO projects around 25 million job loss and workers could lose some $3.4 trillion income by the year-end.
The post-pandemic recession may be much worse than the 2008-09 financial crisis. The IMF projects US economy to shrink by 8 percent this year before expanding by 4.5 percent in 2021. The Fed projected in June that US output will contract by 6.5 percent at the end of 2020 compared to the final quarter of 2019, with an expected rebound by 5 percent in 2021. A CBO report (May 2020) forecasts 5.6 percent contraction of US output in 2020.
Eurozone economies are projected to shrink significantly this year and expand by 6 percent next year. China may expect its economy to grow only 1 percent this year and 8.2 percent next year.
The IMF estimates that global trade has contracted by 3.5 percent in the first quarter of 2020. The World Trade Organization (WTO) has also observed sharp fall in global trade in the first half of this year. Global trade in goods shrank 3 percent in the first quarter and 18.5 percent in the second. However, subsequent global trade growth is likely to meet the organization's optimistic outlook of 9.13 percent contraction in 2020 against its pessimistic decline of 32 percent. This is a "silver lining" development as per the WTO.
As the world is struggling to cope with the pandemic, experts warn about the next crisis ahead: the climate change crisis, which may bring even more devastation. The recent UN report on the Socio-Economic Impacts of Covid-19 highlights that if the global community had been appropriately invested in the MDGs and Sustainable Development Goals (SDGs), then they would have been better prepared to withstand different types of shocks.
An inconvenient truth is that the coronavirus pandemic will have serious negative effects on the sustainable development agenda implementation. Many companies are now left in a Catch-22 situation. Most of them are now struggling for mere survival and unable to invest in the sustainable production processes.
Even prior to the current pandemic, the world somehow kept falling behind regarding SDG implementation. The global economy was led to new conundrum when the investors moved around US $90 billion out of emerging markets. The drop in demand from trade in the Asia-Pacific region alone will be around $172 billion. This is equivalent to around 0.8 percent drop of the region's GDP. COVID19 crisis exacerbates the risk of a new debt crisis in this region and other highly indebted countries.
Large monetary, fiscal and financial policy stimulus required to solve the pandemic impacts will drain a country's resources from the SDG budgets. The United Nation has recently outlined measures to address the possible global recession and financial turmoil. Three suggested immediate and medium-term policy responses are: (1) coordinated stimulus packages by countries for which they should be given concessional finance; (2) private sector sustainable investment and (3) significant investments in the resilient infrastructure, ensuring social protection systems, elimination of trade barriers and supply chain restrictions. Countries should also invest in the transformative digital technologies to enable inclusion and efficiency.
Before pandemic onslaught, Bangladesh was doing better than many other developing countries in terms of her SDG implementation. Appropriate institutional mechanisms are in place; the Prime Minister's Office is monitoring SDG related activities. The General Economic Division (GED) of the Planning Commission is the focal point for all SDG-related functions.
Bangladesh's voluntary national review (VNR) of SDGs was appreciated in the United nations in 2017. Our Data Gap Analysis and Financing Strategy of SDGs are important instruments for timely implementation of the Goals and the Targets. Budgetary allocations have been made in spite of our resource constraints. SDGs are now taught in schools. Ministries/Divisions are implementing their respective action plans to achieve 17 universal and transformative SDGs comprised of 169 targets and 230 indicators.
Coronavirus pandemic has disrupted all plans, with significant SDG funds being diverted to other priority areas. Economists now estimate that Bangladesh's poverty rate may double to 40 percent, remittance may decrease by 7 percent, and growth rate may range between 2 to 3 percent this year. A 2-4 months of lockdown may case 14-18 percent job loss.
The response to global request for funds, the $8.3 billion pledged by the governments, private donors and multilateral organizations during first half of March 2020 is inadequate. World Bank's $12 billion and IMF's $50 billion financing support for low income and emerging market countries will be of immediate relief.
However, IMF/World Bank's "One-size-fits-all" policy conditionalities may be counterproductive for some countries. The WHO has failed to ensure effective multilateral coordination during pandemic. The once-promising emerging rise of BRIC (Brazil, Russia, India, China) countries has been quite short-lived and could hardly help other countries. The United Nations, the most inclusive global institution, must play strong coordinating role for handling post-pandemic global recovery. The UN should immediately arrange re-assessment of socio-economic impacts of the pandemic and provide fund for Agenda 2030 implementation.
Bangladesh had nearly $1 trillion financing gap for SDG implementation before the pandemic. The Prime Minister has declared incentive/financing packages involving more than Tk1 lakh crore for salvaging post-Covid economy. Lack of proper coordination among government agencies/departments, weakness of healthcare system, corruption etc have been noticed.
While Bangladesh was taking preparations for reaping benefits of the Fourth Industrial Revolution (4IR), the pandemic has been a great blow to our efforts. However, the "pandemic pause" has been considered a blessing in disguise by some analysts. Stakeholders will get an opportunity to thoroughly review their needs in the post-pandemic situation. All 17 goals are not equally important for all countries. Even many countries do not have capacities to implement all the goals by 2030.
Health and a few other SDGs (education, food security, water/sanitation, climate action etc.) should now be prioritized. UN estimates that more than 5 billion people will lack access to essential health services (medicine, doctor or health worker consultation, running water supply in hospitals etc.).
Bangladesh's priority should now be to facilitate re-employment of workers (SDG8), strengthen healthcare system (SDG3) and feed those who lost their sources of income (SDG2), while ensuring that those most disproportionately affected are not forgotten amidst the growing shadow pandemic of violence against women and girls (SDG5).
The collateral damage due to interlinkage between the SDGs will also need to be addressed (e.g. increased poverty, enhanced inequality). Pre-pandemic world spent approximately 7.5 trillion on health each year (10 percent of global GDP). Dangerous public health gaps have been noticed in the conflict-ridden and climate vulnerable areas. While our allocation has been increased to 5.2 percent in this year's health budget, the fund for Covid-19 will be insufficient. Government needs to immediately allocate necessary funds, strengthen coordination mechanism, re-prioritise and involve the whole society to implement the SDGs in order to minimise the pandemic impacts.
The writer is a former Principal Secretary to the Prime Minister. He may be communicated at: firstname.lastname@example.org