Urban migration and COVID-19: Cities on the frontline of an inclusive response and recovery

14 April 2021 Development Matters New social contract, Reviving international co-operation Covid-19, Latin America

By Samer Saliba, Head of Practice, Mayors Migration Council

The international community is not doing enough to financially support those who are doing the most for migrants, refugees, and internally displaced people during this global pandemic: city governments. While many cities have the mandate to serve people in vulnerable situations, including migrant and displaced residents, they often do not have enough financial resources to meet the increased demand and need of new arrivals. Lost revenue due to the economic impacts of COVID-19 will further curtail cities’ ability to deliver critical services to their residents this year. Some estimates suggest city governments could see revenue losses of up to 25 percent in 2021, precisely when their spending needs to increase to pay for recovery efforts and continuously growing populations. In a recent survey, 33 municipal finance officials in 22 countries across all continents reported already seeing a 10 percent decrease in their overall revenue and around a five percent increase in expenditure. This “scissors effect” of local government revenue and expenditure will be most felt in cities in developing countries. African cities, for example, could potentially lose up to up to 65 percent of their revenue in 2021.

While the international community is paying more attention to municipal finance in relation to climate change, sustainable development, and urban development in general, the same cannot be said of urban migration and displacement. Few municipal finance mechanisms focus explicitly on financing for urban migration and displacement, despite the fact that the majority of migrants and displaced people reside in cities. Moreover, donors with low risk tolerance often disregard city governments in low to middle-income countries. In response to the unmet needs of cities, my organisation, the Mayors Migration Council (MMC), recently launched the Global Cities Fund on Inclusive Pandemic Response supporting five cities to implement inclusive response and recovery programmes of their own design.

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Significant but insufficient progress in financial support for developing countries

13 April 202113 April 2021 Development Matters New social contract Debt, Financing

By José Antonio Ocampo, Professor at Columbia University and former UN Under-Secretary-General for Economic and Social Affairs and Finance Minister of Colombia

Recent events and particularly last week’s meeting of the Bretton Woods institutions have generated significant advances in international financial co-operation, particularly in support of developing countries. The latter is crucial, as a large number of low and middle-income countries continue to be severely affected by the COVID-19 crisis while the economic recovery underway is very uneven, as underscored by the IMF in its World Economic Outlook.

The first good news was the agreement to issue $650 billion dollars in Special Drawing Rights (SDRs), the IMF’s global reserve asset. Close to two-fifths of the new SDRs would engross the reserves of developing countries. It remains to be agreed how the unused SDRs, particularly from developed countries and China, would be lent or donated to special funds to support low-income countries, and there is no agreement on how they could also be used to support middle-income countries.

The second good news was the endorsement by the US of a global effective minimum tax in the context of the negotiations taking place in the OECD Inclusive Framework on BEPS (Base Erosion and Profit Shifting). There is still a need to agree on what the tax rate would be and the criteria for determining the tax base: whether sales, as the US has suggested, as well as other criteria, particularly resource use and employment that would benefit developing countries, as the Independent Commission for the Reform of International Corporate Taxation (ICRICT) has suggested.

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For greater vaccine equity, first fix these misconceptions

12 April 2021 Development Matters Covid-19, New social contract Covid-19, New social contract

By Philip Schellekens, Senior Economic Advisor, World Bank Group

As we start to see the light at the end of the pandemic’s dark tunnel, inequities in the distribution of vaccines across countries are coming under intense scrutiny. Unequal vaccine distribution is not necessarily unfair—after all, some population groups are more vulnerable than others. Yet relative to sensible metrics of need, the current inequality is excessive. Efforts to boost and balance deployment have galvanized under the clarion call for #VaccinEquity, but progress has been slow and marred by bottlenecks.

In addition to the various practical constraints—including financing, logistics, manufacturing, and patent rights—three misconceptions stand in the way: the view that COVID-19 is mainly a “rich-country disease”; a focus on herd immunity that detracts from the pressing goal of protecting the global priority group; and a belief that fixing vaccine hoarding in rich countries will fix vaccine equity on its own.

A global snapshot of vaccine inequity

Competing interests in diplomacy, economics, and global health shape the international distribution of vaccines, but overshadowing them all are universally recognized ethical principles that center on “need” and “priority for the disadvantaged.” Needs encompass a fuzzy spectrum. They include the burden of morbidity (e.g., long COVID), broader health effects (e.g., undermanaged illnesses), and wider socioeconomic effects (e.g., food security and poverty). But as long as this pandemic rages on, needs will first and foremost be defined by the vulnerability to premature death—which not only is devastating but also irreversible and hence hard to compensate for.

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We need a new multilateralism to bring about a better post-pandemic world

17 March 202118 March 2021 Development Matters Latin America and the Caribbean, New social contract, Reviving international co-operation Latin America, multilateral, New social contract

By Benigno Lopez, Vice President for Sectors and Knowledge, IDB

When discussing life after the pandemic, many express a longing to return to a pre-Coronavirus world. But instead of dreaming of the status quo, I hope Latin America and the Caribbean (LAC) advances towards a better and “new normal”, born under the pressures of COVID-19, and far more equitable and collaborative than before. Critically, multilaterals will need to work together more than ever to help make this happen.

Bringing about a better, post-pandemic future will not be easy. LAC has been hit hard by the crisis. According to recent estimates, the region saw a 7.4 percent contraction of GDP in 2020, with 34 million people losing their jobs and at least 40 million falling into poverty. To further complicate matters, the region grappled with pressing challenges even before the emergence of COVID-19. Economic growth and productivity have been lagging for some time. And our region is the most unequal in the world: the richest tenth of the population captures 22 times more income than the bottom tenth, while the richest 1 percent captures 21 percent of the income in the entire economy — double the average in the industrialised world.

As the pandemic spread, so have concerns over inequality. References to inequality on social networks have multiplied by 10 since March 2020, according to our own digital tracking tools.

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A deliberative wave for development?

16 March 202116 March 2021 Development Matters Civil Society, New social contract Civil Society, New social contract

By Ieva Cesnulaityte, Policy Analyst, Open Government, OECD

Citizen-centred and citizen-led policymaking is no longer an abstract vision. Polarisation, populism, and low levels of trust in governments, have prompted academics, practitioners, politicians, and policy makers to reflect upon innovative ways of breathing new life into democratic institutions. And some of the tools being rediscovered and applied today, such as deliberation by a representative group of citizens, date back to ancient Athenian democracy.

A new OECD study shows that public authorities from all levels of government are increasingly turning to citizens to tackle complex policy problems. They are doing so by convening groups of people representing a wide cross-section of society to learn, deliberate, and develop collective recommendations. The OECD ’s Open Government team has been looking into citizens’ assemblies, juries, panels and other representative deliberative processes as ways to meet citizen demands for more open governments and more agency in shaping public decisions.

A landmark among these processes is the Irish Citizens’ Assembly (2016-2018), which involved 100 randomly selected citizens who deliberated over and provided recommendations for five important legal and policy issues, including the 8^th Amendment of the Constitution on Abortion. More recently, 150 randomly selected citizens, representative of the French population, met for seven weekends over six months last year, to form the French Citizens’ Convention on Climate. They had a mandate to define a range of measures that will enable France to reduce its greenhouse gas emissions by at least 40% by 2030 (compared to 1990 levels) in a socially just and equitable way.

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Financial integrity for sustainable development

2 March 2021 Development Matters New social contract New social contract, Tax

By José Antonio Ocampo, Professor at Columbia University, and former UN Under-Secretary-General for Economic and Social Affairs and Finance Minister of Colombia

The world must curb financial flows associated with tax evasion and avoidance, as well as those obtained through corrupt activities and money laundering. The magnitude of the funds involved is immense; trillions of dollars in bank accounts and other assets, and not just in tax havens. The concealed money drains resources from the hands of governments, generates increasing inequality –because the beneficiaries are generally rich people— and causes significant deterioration in public sector governance worldwide. Increased transparency and accountability to curb these flows would improve governance and enhance fairness at the national and international levels.

The problems are systemic and therefore require systemic solutions. This is the basic message of the Financial Integrity for Sustainable Development Report launched by a High Level United Nations Panel on February 25^th. It represents a landmark in the fight against illicit financial flows in the global economy. Former prime minister of Niger Ibrahim Assane Mayaki and former president of Lithuania Dalia Grybauskaitė co-chaired the Panel, which included 15 independent members from around the world. The Panel’s recommendations aim at strengthening national governance, as well as enhancing international co-operation on specific controls on tax abuse, money laundering or corruption, but also to build a coherent ecosystem of institutions to curb these illicit practices.

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La révolution tunisienne dix ans après : pourquoi doit-on continuer à y croire ?

3 February 20213 February 2021 Development Matters Africa, Français, New social contract Africa, New social contract

Par Hakim Ben Hammouda, Universitaire et ancien Ministre de l’Économie et des Finances, Tunisie

La révolution tunisienne le 14 janvier 2011 a été à l’origine d’une grande espérance. Non seulement, elle a libéré la Tunisie d’un autoritarisme anachronique mais elle a aussi ouvert le système politique sur les principes de la modernité politique. Les nouveaux pouvoirs dans les pays des révolutions arabes et dans les autres pays se sont engagés à opérer de grandes réformes constitutionnelles afin d’instaurer le pluralisme politique et un système démocratique avec des élections ouvertes. Parallèlement aux changements politiques, la refonte des modèles de développement était au cœur des priorités post-révolutions et le rêve de construire de nouveaux modèles durables.

Mais, ces promesses ont été rapidement trahies laissant derrière elles un champ de ruines et un goût d’inachevé. Les transitions politiques se sont transformées dans des conflits ravageurs et dans des guerres destructrices comme en Syrie, en Libye ou au Yémen. Dans d’autres pays la parenthèse démocratique s’est rapidement renfermée et a donné lieu à une restauration autoritaire. Les printemps arabes se sont mus en un hiver glacial qui a emporté les rêves et les espoirs de lendemains qui chantent. Seule la Tunisie a pu poursuivre son chemin et sa transition démocratique. Mais non sans de grandes difficultés et des défis importants qui restent à relever, parfois dans une grande indifférence.

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This blog is part of a thread looking more specifically at the impacts of the COVID-19 crisis in terms of capital flows and debt in developing countries.

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