Post-Covid-19 post-pandemic sustainable recovery requires investment coordination in all fields. Financing coordination needs to be deployed in a more transformative and catalytic way to bridge the gap between needs and available resources.
The world has been hit by twin crises over the past three years: the Covid-19 pandemic and climate change. The pandemic hit developing countries hard. Conditions eventually exacerbate poverty and socio-economic inequality.
In the latest report published at the end of February 2023, the High-Level Advisory Group on Sustainable and Inclusive Recovery and Growth (HLAG) notes that a large number of developing market countries and developing economies or EMDEs have been thrown from their economic convergence path.
HLAG is a collaborative association between the World Bank and the International Monetary Fund or IMF. Through its latest report entitled “The Big Push for Transformation through Climate and Development”, HLAG shares analysis as well as recommendations to strengthen post-pandemic recovery as well as a green transition in EMDE.
The HLAG study started with an assessment of the scale and challenges of investing and financing in EMDE. The HLAG found that EMDEs worldwide, except for China, recorded an aggregate need for investment and development expenditure needs of at least US$1.3 trillion per year in 2025 and US$3.5 trillion per year in 2030.
“This figure far exceeds available funding and requires urgent action,” HLAG noted in its report.
Tough and Transformational
But the story isn’t just about scale. “The development progress for which he fought so hard has been eroded by various crises,” said HLAG co-chair and Executive Director for Development Policy and Partnerships at the World Bank, Mari Elka Pangestu, as quoted from the World Bank’s press statement.
Despite the challenges of the crisis, “there are unique opportunities—ranging from extraordinary advances in technology and innovation to unprecedented alignments among international organizations on green, resilient and inclusive development approaches,” says Mari Elka.
HLAG emphasizes the importance of resilient and transformational investments in climate change mitigation and adaptation, including carbon pricing.
To achieve transformational change, notes HLAG, “the whole system needs to work together.” The system referred to by HLAG refers to governments, the private sector and multilateral development banks. “IMF and the donor community need to take more roles in this financing collaboration,” wrote HLAG in its study.
To address the urgent need for concerted action at national and global levels, the HLAG report provides recommendations on critical issues including: