(United Nations) Despite pessimistic growth forecasts for 2023, now is not the time to implement austerity plans that would threaten development goals, especially in poor countries, says the UN in a report released Wednesday.
The UN Department of Economic and Social Affairs predicts global growth of less than 2% this year (1.9%), one of the “weakest in recent decades”.
The World Bank has already revised its forecast sharply downwards: 1.7% for 2023, compared to 3% last June, due to persistent inflation, rising rates and the effects of the war in Ukraine.
But “this is not the time for short-term thinking or reckless austerity that exacerbates inequalities, increases suffering and risks pushing the Sustainable Development Goals away” (SDGs), insists the Secretary General of UN Antonio Guterres in the preamble to the report released Wednesday.
The 17 SDGs adopted in 2015 aim in particular to achieve the eradication of poverty, food security for all and access to clean and affordable energy by 2030.
A summit in September in New York is to assess the situation of the SDGs at the midpoint. But most of them are not on track.
And “slowing growth, high inflation and growing debt vulnerabilities threaten to undermine hard-won SDG gains, intensifying the negative effects of COVID-19,” the report warns.
In the current economic situation, “the typical recommendation of economists is to cut public spending” and some governments have already been called upon to “tighten their belts”, notes its author Hamid Rashid.
Conversely, “our key message is that governments, especially in developing countries, must avoid austerity”, which would be “detrimental” to development objectives, he explains to AFP.
In this context, he calls for a restructuring of the debt of countries in difficulty, before they default.
According to the report, in 2022, in eight developing countries, the burden of this debt represented more than 25% of government revenues, up to almost 80% in Sri Lanka.
The UN is also concerned about the risk of a reduction in development aid. The war in Ukraine and a future reconstruction estimated between 350 and 500 billion euros “will divert certain resources”, estimates Hamid Rashid, fearing “a huge cost for the least developed countries”.
In September, the United Nations Development Program estimated that the world had gone back five years in human development due to unprecedented crises.