REMARKS AT THE WORLD ECONOMIC FORUM
17 January 2022
This year’s World Economic Forum takes place in the shadow of an enormously difficult period for economies, for people and the planet.
According to the UN’s economic report released last week, the world is emerging from the depths of a paralyzing economic crisis.
But recovery remains fragile and uneven amid the lingering pandemic, persistent labour market challenges, ongoing supply-chain disruptions, rising inflation and looming debt traps, not to mention the geopolitical divide.
As a result, we see recovery slowing down quite substantially.
All of this threatens hard-won progress in advancing the 2030 Agenda and the Sustainable Development Goals, our key projects.
The last two years have demonstrated a simple but brutal truth – if we leave anyone behind, in the end, we leave everyone behind.
If we fail to vaccinate every person, we give rise to new variants that spread across borders and bring daily life and economies to a grinding halt.
If we fail to provide debt relief and financing to developing countries, we create a lopsided recovery that can send an interconnected global economy into a tailspin.
If we fail to reduce inequalities, we weigh down economic progress for all people in all countries.
And if we fail to match climate rhetoric with climate actions, we condemn ourselves to a hotter, more volatile earth, with worsening disasters and mass displacement.
At the core of these failures is a global inability to support developing countries in their hour of need and also a problem of governance or international different systems.
Without immediate action to support them, inequalities and poverty will deepen.
This will result in more social unrest and more violence.
As the Forum’s new Global Risk Report reminds us, the world is marching down a path laden with enormous risks.
We cannot afford this kind of instability.
To chart a new course, we need all hands on deck – especially all of you in the global business community. And I have a number of asks.
As you meet, discuss and deliberate the prospects for recovery and economic rebound this coming year, I urge you to focus on three urgent areas.
First – we need to confront the pandemic with equity and fairness.
Last fall, the World Health Organization unveiled a strategy to vaccinate 40 per cent of people in all countries by the end of last year, and 70 per cent by the middle of this year.
We are nowhere near these targets.
Vaccination rates in high-income countries are – shamefully – seven times higher than in African countries.
We need vaccine equity, now.
All countries and all manufacturers must prioritize vaccine supply to COVAX, and support the local production of tests, vaccines and treatments around the world.
We need pharmaceutical companies to stand in solidarity with developing countries by sharing licenses, know-how and technology so we can all find a way out of this pandemic.
And of course, In situations where compensation may be warranted – we don’t want to have any pharmaceutical company in financial difficulties that are not able to invest – in those situations developed countries should explore ways to provide the necessary financial support.
And we must prepare for the next pandemic through common sense investments in monitoring, early detection and rapid response plans in every country – and by strengthening the authority of the World Health Organization.
Throughout, we need to bolster local primary health care, and put all countries on the road to achieve Universal Health Coverage and we are still so far from it.
Second – we need to reform the global financial system in a way that it can work for all countries without being biased.
At this critical moment, we are setting in stone a lopsided recovery.
More than eight out of ten recovery dollars are being spent in developed countries.
Low-income countries are at a huge disadvantage.
They’re experiencing their slowest growth in a generation – and trying to dig themselves out with woefully insufficient national budgets.
The burdens of record inflation, shrinking fiscal space, high interest rates, and they will be higher, and soaring energy and food prices are hitting every corner of the world and blocking recovery – especially in low- and some middle-income countries.
They stifle any hope of growth by making it even more difficult for governments to invest in the sustainable and resilient systems people need.
Health, education, decent work and social protection are not only human rights.
They collectively represent a country’s economic engine.
And in developing countries right now, this engine is stalled with dire consequences for people’s livelihoods, especially for women and youth.
The global financial system has failed them when they need it most.
And global solidarity is missing in action.
Countries are shackled by mounting debt and extortionate interest rates – all but guaranteeing defaulted payments.
And many middle-income countries find themselves ineligible for debt relief – despite surging poverty, rising unemployment and development losses.
We need a global financial system that is fit-for-purpose.
This means urgent debt restructuring and reforms of the long-term debt architecture.
It means expanding the Common Framework for Debt Treatment to middle-income countries – and to make it work with private sector creditors also engaging with the Framework.
It means going beyond Gross Domestic Product, to measure, mitigate and prepare for vulnerability and investment risks, especially climate risks.
It means addressing corruption and illicit financial flows, and ensuring that tax systems are fair and designed in a way that truly reduces inequalities.
And it means bringing together governments, businesses, the financial sector and international financial institutions to build up private investment in developing countries.
As business leaders, stand with us as we shape a global financial system that works for all countries, not just the wealthy few.
Third – we need to support real climate action in developing countries.
Emissions must fall, but they continue to rise.
Coal-fired power generation is surging towards a new all-time record.
Even if all developed countries kept their promises, very important promises, to drastically reduce emissions by 2030 – the problem is that with all developing countries achieving their present Nationally Determined Contribution, especially emerging economies – global emissions would still be too high to keep the 1.5 degree goal within reach.
We in fact would need a 45 per cent reduction in global emissions this decade.
Yet, with the present conditions, global emissions are set to increase by 14 per cent by 2030 – defying reason and ignoring the impacts on people, economies and our planet.
1.2 degrees of warming has already brought devastating consequences and soaring price tags measured in dollars and despair.
Over the last two decades, the economic toll from climate-relate disasters skyrocketed by 82 per cent.
Extreme weather in 2021 caused $120 billion in insured losses, and killed 10,000 people.
Climate shocks forced 30 million people to flee their homes in 2020 alone – three times more than those displaced by war and violence.
And one billion children are at an extremely high risk of the impacts of climate change.
Turning this ship around will take immense willpower and ingenuity from governments and businesses alike, in every major-emitting nation.
A number of countries have pledged to make meaningful emissions reductions in the 2020s.
Other countries face enormous structural obstacles. They have an energy mix that relies on heavy dependence on coal. That stands in the way of progress for us all.
They need assistance. Let’s not go into a blame and shame. Let’s assist, help key emerging economies accelerate the transition, I’m calling for the creation of coalitions of countries, public and private financial institutions, investment funds, and companies that have the technological know-how to provide targeted financial and technical support for every country that needs assistance.
We have had the U.S. and China making an agreement that I hope will provide China with more adequate technologies in order to accelerate the transition from coal. India doesn’t like the coalition but India has accepted several bilateral forms of support and I have been in close contact with the U.S., the UK and several other countries to make sure there is a strong project to support India, namely in their investment in 450 gigawatts of solar energy. Indonesia and Viet Nam already accepted the concept of a coalition supporting them to get rid of coal.
This must be a priority for us all – to phase out coal.
No new coal plants should be built.
As I said, the governments of Indonesia and Vietnam have just announced their intention to get out of coal and to have a transition to renewable energy but they need support for that.
South Africa now has in place a just energy transition with a partnership that involves a number of key countries and international financial institutions to support in accelerating, moving out, progressing, moving out from coal.
We see a clear role for businesses and investors in supporting our net-zero goal.
The Net-Zero Asset Owners Alliance has set the gold standard.
Last week, I took part in a meeting of the Glasgow Financial Alliance for Net Zero. That group represents more than $130 trillion of assets mobilized to the net-zero goal.
The entire financial system should follow their lead.
But these efforts must be complemented.
We need entire sectors on board.
Heavy industry, shipping and aviation and others must be on a trajectory for net-zero by 2050.
At COP26, I also announced the creation of a high-level expert group to evaluate the standards and criteria used to set, implement and monitor net-zero commitments by non-State actors – businesses, cities, financial institutions, and regions.
Over the course of this year, the group will propose new frameworks and develop recommendations.
It is encouraging to see the private sector take the lead, but it is essential to put pressure on governments to keep up and not be left behind.
The truth is that many of today’s policies and regulatory frameworks are an obstacle for private sector engagement.
At the same time, international financial institutions are not doing enough to create forms of partnership that would allow to de-risk private investment in countries that need to speed up their transition.
All this needs to change.
Across all three of these areas, we need the support, ideas, financing and voice of the global business community.
We cannot afford to replicate the inequalities and injustices that continue condemning tens of millions of people to lives of want, poverty and poor health.
We cannot continue building walls between the haves and have-nots. Or, building walls that undermine a global market that needs to work in a united way.
We need to come together – across countries and across sectors – to support those countries who need the most help.
Let’s stand together to make 2022 a true moment of recovery.
I look forward to working with all of you to make this happen, and I look forward to the discussion that we are going to have.
Thank you very much.