Keynote Presentation: Olivier Cattaneo, OECD | Dr Debapriya Bhattacharya, CPD
The COVID-19 pandemic brought attention to the crucial role of the multilateral organisations and other financial philanthropic institutions as supporters of growth and prosperity in the developing countries. During this pandemic, these organisations were proactive, even though the multilateral development system was under stress, perhaps as never before. Inflow of funds to the middle-income countries was up to the mark but there were some financing gaps in addressing the crisis in the developing countries. The pandemic highlighted the interdependence of nations and people around the world. Yet, the crisis has also exposed some limitations of the multilateral development system that need to be tackled to ensure that multilateral organisations can also contribute to the recovery from the pandemic.
In this backdrop, a virtual discussion session titled “The Multilateral Response to COVID-19 Perspectives from South Asia”, was held on 27 October 2020. The programme was organised jointly by the Centre for Policy Dialogue (CPD) and the Organisation for Economic Co-operation and Development (OECD), in partnership with Research and Information System for Developing Countries (RIS), Sustainable Development Policy Institute (SDPI), Institute of Policy Studies of Sri Lanka (IPS), and the South Asia Watch on Trade, Economics and Environment (SAWTEE).
The event was part of the ‘Around the clock, around the world’ marathon on multilateral development finance scheduled around the launch of the OECD’s 2020 Multilateral Development Finance Report. The objective of hosting these events was to offer a platform for open dialogue and collective thinking on multilateral development finance, which is currently under great stress from facing a highly ambitious global development agenda and from a simultaneous need to cope with the impact of global challenges such as the COVID-19 pandemic that could undo years of hard-won development progress.
Dr Fahmida Khatun, Executive Director, CPD, made the introductory remarks and stated that the pandemic can be considered as an opportunity to build a system which may address new global development challenges.
Mr Olivier Cattaneo, Head of Unity, Policy Analysis and Strategy Development Co-operation Directorate, OECD, and Dr Debapriya Bhattacharya, Distinguished Fellow of CPD, Chairman of Southern Voice, both made keynote presentations at the programme.
Mr Olivier Cattaneo highlighted the core message of the OECD’s 2020 Multilateral Development Finance Report that multilateral development finance was on the rise. He added that it has been steadily growing and at faster pace than bilateral cooperation. He mentioned that it reached an all-time high in 2018 at USD 71.9 billion, representing 42% of Official Development Assistance (ODA). The presentation focused on the trends of the multilateral development system, how it evolved, as well as funding inflows-outflows and some reform measures.
Dr Debapriya Bhattacharya’s presentation was in the context of Bangladesh. It addressed a number of policy suggestions and policy management challenges which were also relevant for other South Asian countries. He commented that foreign aid and the multilateral system will remain important in the case of Bangladesh for the coming years.
The post pandemic circumstances may open up the possibilities in the value chains and cross border investments for better integration in South Asia. SDGs 7, 8 and 9 are important, but the role of the United Nations Industrial Development Organisation (UNIDO) in terms of reviving the industrial policy architecture is extremely important according to Professor Sachin Chaturvedi, Director General, RIS, India.
Dr Abid Qaiyum Suleri, Executive Director, SDPI, Pakistan, talked about the multilateral development system in the context of Pakistan, specifically focusing on climate change. He highlighted on the issue of the climate change green fund, where Pakistan was facing lack of capacities within ministries and departments to come up with tangible plans and proposals.
The dependence on multilateral financing was very limited in Sri Lanka. Over the last decade, the country had shifted its dependence in case of funding from international and bilateral donors. At present, the country has a large foreign debt. For example, its public debt is 90 per cent of GDP, of which 50 per cent of that is made of foreign debt. While making her points, Dr Dushni Weerakoon, Executive Director of IPS, Sri Lanka, highlighted these issues.
Dr Puspa Sharma, Executive Director, SAWTEE, Nepal, felt that the findings of the OECD report were interesting from the South Asian perspective. He highlighted some issues in the context of LDC graduation. He told that the share of loans was increasing and Covid-19 was causing a decline in revenue and remittances for South Asian countries.
Dr A B Mirza Azizul Islam, Former Advisor to the Caretaker Government, Ministries of Finance and Planning, Bangladesh, commented on certain aspects of foreign aid recipient countries. He said that per capita remittance in Bangladesh was very low and therefore recommended the need to diversify the situation so that more people could work while up-scaling the skills of the workers.
Mr Angel Gurría, Secretary General, OECD, presented a video massage where he mentioned that Development-Finance was paramount in helping achieve a reasonable and more resilient recovery from COVID-19. He mentioned that important progress had already been achieved. For example, a large part of the financing was made immediately available to developing countries at the beginning of the pandemic and was channeled through the multilateral system. He also highlighted the importance of trust between the countries and also between the governments and donor agencies, especially in the case of multinationalism.
Professor Rehman Sobhan, Chairman, CPD, chaired the dialogue. He continued with Mr Angel Gurría’s remarks on the restructuring of ODA. The larger part of ODA is still coming from bilateral donors. The major agenda for the South Asian countries is that they must get their policy making agenda in shape, so they should be more serious about implementing policies, and they must be in a better position to dictate the different external funders. There is a lack of utilisation of foreign finance which needs to be addressed urgently.
The discussion session was attended by regional partners, development organisations, stakeholders and journalists.