By Sony Kapoor, CEO of the Nordic Institute for Finance, Technology and Sustainability (NIFTYS) and Chair of Re-Define
The humanitarian, moral and economic case for development aid has been made eloquently and does not bear repeating. But the stark, ongoing highly inequitable impact of climate change and the COVID-19 pandemic, both of which hurt poor and developing economies the most, has turbocharged the case for more aid and now. However, present levels of aid languish at 0.32% of GDP, or $161.2 billion, less than half the promised amount of 0.7% of GDP. This commitment needs to be at least doubled, but despite the OECD call for a “massive expansion of aid” countries such as the UK are cutting, rather than increasing aid.
Meanwhile, in the developing world, COVID-19 may push 150 million to 200 million people into extreme poverty, reversing years of hard-earned progress. Even a dynamic economy such as India has seen an increase of 75 million additional poor, with the middle class also being hollowed out. The IMF has highlighted the uneven nature of the recovery between rich economies that have vaccines and large stimulus programmes, and developing countries that are lagging behind on both, now also facing fresh outbreaks of the virus. Climate change is likely to push an additional 130 million people into extreme poverty absent urgent mitigation and resources for adaptation. As Oxfam has highlighted, developed economies have failed to meet their promise to mobilise $100 billion in climate funding with the true value likely at only a third of the reported volume.Continue reading