In commemoration of the 75th anniversary of the UN co-organised by Centre for China and Globalisation (CCG) and Dialogue of Civilizations Research Institute
Find Gabriela Ramos’ keynote remarks and the recording of the session below. She was joined by other speakers including Jean-Pierre Raffarin, Former French Prime Minister; Nicholas Rosellini, Resident Coordinator, UN China; YI Xiaozhun, Deputy Director-General, World Trade Organization (WTO).
Distinguished guests, Ladies and Gentlemen,
I’d like to thank Centre for China and Globalization (CCG) AND Dialogue of Civilizations Research Institute (DOC) when multilateralism stands at a critical juncture.
The COVID-19, as tragic as it is, has reminded us of what truly matters to us – good physical and mental health, environment, social connection, education. Indeed, this deadly health crisis made us “re-evaluate our priority”. To find out what we treasure most.
For sure, the economic impact has been enormous. According to the OECD’s latest Economic Outlook, we project 6% annual decline in global GDP for 2020, and this is far bigger than any other decline we have seen in the 60 years of the OECD’s existence. But this is just the “upbeat” scenario without considering a second wave of infections. In the case of a “double hit” scenario, global GDP could decline by more than 7.5%, with 40 million additional people being unemployed in the OECD by December 2020.
This systemic shock comes at a time when the global economy was already vulnerable with widening inequalities, climate challenges and high-level of corporate and public debt. Even the most advanced economies could not absorb the shock. Our economy, trade, people, jobs, children and women are all hard hit – the COVID-19 ended up exposing all kinds of “pre-existing” vulnerabilities and fragilities in our society. The crisis has created a clearer divide between the winners and the losers – those who can adopt and those who cannot. Women, those in informal jobs, those without savings, those with limited digital connectivity are the ones who are losing most.
But the crisis did not create these divides. For so long, the uneven distribution of the benefits of growth has been leaving too many people behind. Around the world, people have been expressing their anger through the ballot box and in the street, allowing populist and isolationist to take over in a crisis situation like this when all we need is a stronger international co-operation.
Currently, all the frameworks are overstretched, even with the WHO. We will not be able to operate effectively without an extra push of international co-operation. Then, can the pandemic “revive” multilateralism?
In fact, there may be a silver lining. Given that the pandemic respects no borders, there is a realization that this global problem requires global solutions.
First, because we can learn from each other to see why some countries managed much better than the others.
The crisis proved that lack of any sort of excess capacity can leave countries vulnerable to an unexpected demand surge. Then, who managed well? Look at how Germany managed so well with a strong hospital capacity equipped with enough intensive care beds (38.7 per 100,000 people). Another good example is Korea, which was able to deploy a massive TTT strategy. And they absorbed the potentially devastating economic shocks (Korea 2.5% decline for 2020 in the double hit scenario; Germany 8.8% and the lowest in Euro area). These analyses are based on the OECD evidence-based work comparing government responses.
Furthermore, this public health crisis also teaches us a lesson that we need to anticipate any future shocks. In building multilateral solutions now, we also need to anticipate the next crisis brought by the environmental and climate emergency.
Second, because some of the issues can only be developed jointly.
Currently, we are all in aggressive mission to develop a coronavirus vaccine. While attention has so far focused on spurring R&D, there has been little co-ordination or co-operation between countries in funding, planning and building manufacturing capacity. We need globally agreed rules on managing intellectual property rights and procurement to ensure equitable access, affordability and supply for developing countries or many lives will be at risk.
Third, because we need international cooperation to help countries raise revenue after the devastation to public finances wrought by the pandemic. At the OECD, we are working for a new global tax framework for technology companies that is more necessary than ever.
Fourth, because coordinated action is needed to keep trade and investment flowing freely.
Since the onset of the crisis, there has been a push back against extended global value chains, and countries reconsidering their dependence on far away markets. But the answer must not be localisation or anti-globalisation as this could result detrimental to developing countries. We need to analyse what happened to production networks, why it happened and what could be done in the future to create shock-proof systems.
No one country alone can take on this enormous task, but multilateralism is the only answer to the challenges.
We need to turn this crisis into an opportunity to enhance multilateral co-operation. The post-COVID world that we envision needs a new growth narrative that is people-centred. Of course, we already have the SDGs to guide us where we want to land.
“Building back better” means greener, but also enhanced inclusiveness and resilience to future shocks.
For example, we are in a desperate need for more development finance. Because at the moment, flows (such as ODA risk stagnation) or dramatic falling (such as external private finance) are estimated to plunge in 2020 by about USD 700 billion compared to 2019 levels. While domestic resources remain the most stable long-term source, developing countries cannot weather this crisis or reach the SDGs without additional external finance, starting with higher aid from both traditional and emerging donors.
Against this backdrop, a strong UN must rise to these challenges. The fact that those same 193 countries came together in 2015, only five years ago, to agree the 2030 Agenda and its 17 SDGs is an example of the huge potential that it has.
But this requires political will. If, in particular the most powerful economies decide to use the UN as the forum to discuss and decide on ambitious coordinated global economic, social and environmental action, the UN once again rises to be the place to be.