UN chief: recession near certain
TANZANIA, Tanzania — UN Secretary-General Antonio Guterres said Thursday the world “is at war with a virus” and warned that “a global recession — perhaps of record dimensions — is a near certainty.”
The UN chief said “people are suffering, sick and scared” and stressed that current responses by individual countries will not address “the global scale and complexity of the crisis.”
“This is a moment that demands co-ordinated, decisive, and innovative policy action from the world’s leading economies,” Guterres told reporters from UN headquarters in New York. “We must recognize that the poorest countries and most vulnerable — especially women — will be the hardest hit.”
The secretary-general welcomed next week’s emergency summit of leaders of the Group of 20 major economic powers to respond to the COVID-19 pandemic. He said he will participate with the message that this is an unprecedented situation which requires creativity — “and the magnitude of the response must match its scale.”
“COVID-19 is killing people, as well as attacking the real economy at its core — trade, supply chains, businesses, jobs,” Guterres said. “Entire countries and cities are in lock down. Borders are closing. Companies are struggling to stay in business and families are simply struggling to stay afloat.”
The International Labor Organization just reported that workers around the world could lose as much as $3.4 trillion in income by the end of this year, he said.
The secretary-general said world leaders have the opportunity to steer the recovery from the coronavirus pandemic “toward a more sustainable and inclusive path.”
“But poorly co-ordinated policies risk locking in — or even worsening — already unsustainable inequalities, reversing hard-won development gains and poverty reduction,” he warned.
Guterres called for global action to tackle the health emergency, the social impact of the pandemic, and the economic response and recovery.
“If we let the virus spread like wildfire — especially in the most vulnerable regions of the world — it would kill millions of people,” he said.
“And we need to immediately move away from a situation where each country is undertaking its own health strategies to one that ensures, in full transparency, a co-ordinated global response, including helping countries that are less prepared to tackle the crisis,” Guterres said.
The secretary-general said governments must give strongest support to the global effort to fight the virus led by the U.N. World Health Organization, including responding to its $675 million appeal.
“Health spending must be scaled up right away to meet urgent needs and the surge in demand — expanding testing, bolstering facilities, supporting health care workers, and ensuring adequate supplies — with full respect for human rights and without stigma,” Guterres said.
Unlike the 2008 financial crisis, he said, banks must be part of the solution and “the liquidity of the financial system must be guaranteed, and banks must use their resilience to support their customers.”
Guterres said the focus must be on the most vulnerable people — low-wage workers, small and medium enterprises — and “that means wage support, insurance, social protection, preventing bankruptcies and job loss.”
“That also means designing fiscal and monetary responses to ensure that the burden does not fall on those who can least afford it,” he said. “And we must refrain from the temptation of resorting to protectionism. This is the time to dismantle trade barriers and re-establish supply chains.”
Guterres said resources need to get into the hands of people, noting that some countries are adopting cash transfers and universal income.
“We need to take it to the next level to ensure support reaches those entirely dependent on the informal economy and countries less able to respond,” he said.
The secretary-general stressed that remittances “are a lifeline in the developing — especially now.”
He said countries have committed to reducing remittance fees to 3 per cent, but the COVID-19 crisis requires that they get as close to zero as possible.
G20 leaders have also waived interest payments to protect their own citizens and economies, he said.
“We must apply that same logic to the most vulnerable countries in our global village and alleviate their debt burden,” Guterres said.
The secretary-general was asked where the money was going to come from to fund his ambitious program, given that many G20 countries are dealing with COVID-19 outbreaks at home.
“We see that whenever there is a problem in the banking system, trillions appear to solve the problems of the banks,” he said. “And these trillions must appear now.”
“Governments, central banks must work to guarantee that there is liquidity in the economy but also that funds are mobilized to those that are most in need,” both individuals and the poorest countries, the UN chief said.
Guterres stressed the need for solidarity saying political, religious and community leaders must convey a very strong message that the fight against COVID-19 must be done together — and that “it’s very important to fight fake news” and social media campaigns that try to spread fear, antagonism and create divisions.