Contemporary challenges for the realization of the right to development and the SDGs 20th Session of the WG on RTD 30 April 2019, Room V, Palais des Nations, Geneva Vicente Paolo Yu III

Climate change, poverty, and vulnerability Indicators of a changing global climate Increase in climate change-related events

Global Economic Uncertainty Item 2017 2018 2019 2020 World Output 3.8 3.7 3.5 3.6 AE Growth 2.4 2.3 2.0 1.7 Developing Asia 6.5 6.3 6.4 LAC 1.3 1.1 2.5 MENA 2.2 3.0 SSA 2.9 LDCs 4.7 4.6 5.1 Source: IMF, World Economic Outlook Update Jan 2019, https://www.imf.org/en/Publications/WEO/Issues/2019/01/11/weo-update-january-2019

Factors for Global Economic Uncertainty Fiscal consolidation (austerity policies) in developed countries after quantitative easing post- 2008 crisis – reduction of public sector services, privatization, increase in interest rates Wage stagnation and rising inequality despite falling unemployment – wage shares have stagnated or fallen relative to national incomes (rich becoming richer, poor remaining poor) Excessive asset-price inflation – overheating of asset (bond, stock, property, credit) markets due to post-crisis liquidity boom given to banks Volatile currency movements – net positive capital flows (through FDI and portfolio investments) to developing countries post-2010 turned steeply negative from 2014 to the present as developed country fiscal policies turned off quantitative easing (higher interest rates) Depressed real investment (increased M&As) despite high corporate profits – Access to liquidity allowed corporates to increase asset consolidation and acquisition rather than real productive investment Debt dependence, vulnerability and unsustainability in developing countries – Developing country debt stock is now around ¼ of total global debt ($62.5Tr of $250Tr), of which external debt is $7.64 Tr growing at 8.5%/year, largely due to rapid and often premature integration into international financial markets and exposure to private sector lending in developing country debt Trade protectionism and trade wars Source: UNCTAD, Trade and Development Report 2018, https://unctad.org/en/PublicationsLibrary/tdr2018_en.pdf

Impact of US pullout from PA fast and ambitious climate action in all countries of the world (rapid and immediate emission reductions + adaptation) the full availability of all required emissions reduction and carbon removal technologies (including BECCS  “hugely expensive, unproven, speculative”) aggressive energy demand reductions across the globe (shift from FF to RE/EE) Amount Remaining: Total Carbon Budget: ? Impact of US pullout from PA Climate finance and investment (>$1.2 Trillion p.a. to developing countries) Technology development in and transfer to developing countries; no cost barriers to transfer, endogenous development, and adoption Sustainable consumption and production (reforms to trade, etc) Institutional changes at all levels Excellent graphic and focused communication—succinct message! 5

Other contemporary issues relevant to RTD and the SDGs Technological change and its impact on economic productivity and employment Migration – brain gain/brain drain; socio-cultural impact Global population growth – stagnating in developed countries; growing in developing countries Urbanization Biodiversity loss, environmental degradation (land, sea, air), natural resource depletion

Sustainable Development Opportunities in the context of climate change Focusing on active and sustainable industrial policy to develop domestic industrial base, robust local markets, and dynamic enterprise sector (subsidies and regulations to support domestic productive capacity, SOEs where appropriate, public sector procurement, regulate ownership of productive assets (including IPR), address inequalities, develop sustainable physical infrastructure for communities; renewable and clean energy Fostering rapid technology diffusion, transfer, and innovation, in both North and South, to maximize income and industrial productivity potential arising from automation, internet connectivity, and climate change mitigation (RE/CE, EE) and adaptation (land, marine) actions; Harnessing the productive capacity of growing younger populations in the South, for increased industrial and agricultural productivity in the South and in the North (including through managed labour mobility/migration); Enhancing protection and regeneration of global environmental public goods (oceans, reefs, biodiversity, land, Arctic/Antarctic, mountains, forests, etc) through strengthened national and international regulatory cooperation and increased local community resource tenure security where needed Generating and channeling financial resources (domestic and external resources) into climate-adapted infrastructure development and productive capacity development in the South, and climate retro-fitting infrastructure in the North, and to provide social security floors; increased ODA, effective tax cooperation, curb illicit flows, debt restructuring, strategically-regulated FDI for development Regulatory flexibility and policy space through more coherent and coordinated domestic and international policy regimes consistent with sustainable development priorities and objectives Reforms and more effective participation in global governance institutions for developing countries to be able to develop nationally-appropriate and strategic industrial economic policies South-South multilateral and regional cooperation together with North-South engagement; SSC in strategic political/policy coordination in various multilateral policy areas (trade, climate, health, IPR, science, environment, etc.), economic engagement, technology development, resource mobilization, industrial and infrastructure development 7

Sustainable Development Solutions – Networking the Silos 8

Thank You Email: yu@southcentre.int