UN to establish COVID-19 Response and Recovery trust fund

—to aid low- and middle-income countries

—world leaders urged to collaborate to address the socio-economic devastation caused by COVID-19

DPI, Guyana, Thursday, April 2, 2020

The United Nations (UN), Secretary-General, António Guterres has announced that the organization is forming a new multi-partner Trust Fund for COVID-19 Response and Recovery to aid low- and middle-income countries respond to the emergency and recover from the socio-economic shock.

During a virtual press encounter to launch the Report on the Socio-Economic Impacts of COVID-19, on March 31, SG Guterres noted the “IMF has reassessed the prospect for growth for 2020 and 2021, declaring that we have entered a recession – as bad as or worse than in 2009.”

The Secretary-General emphasised, that actions taken and measure implemented “during and after this crisis [COVID-19] must be with a strong focus on building more equal, inclusive and sustainable economies and societies that are more resilient in the face of pandemics, climate change, and the many other global challenges we face.”

He noted that the scale of the response must match that of the crisis, i.e. large-scale, coordinated and comprehensive, with country and international responses being guided by the World Health Organization (WHO).

“It must be multilateral, with countries showing solidarity to the most vulnerable communities and nations. The message of the report we are issuing today is clear: shared responsibility and global solidarity in response to the impacts of COVID-19,” He stated.

Guterres called for an immediate coordinated health response to suppress transmission and end the pandemic; a response that scales up health capacity for testing, tracing, quarantine and treatment, while keeping first responders safe, combined with measures to restrict movement and contact.

“A response that delivers universal access to treatment and vaccines, when they are ready. It is essential that developed countries immediately assist those less developed to bolster their health systems and their response capacity to stop transmission. Otherwise, we face the nightmare of the disease spreading like wildfire in the global South with millions of deaths and the prospect of the disease re-emerging where it was previously suppressed.”

The SG specifically highlighted the African continent and encouraged the G20 to move ahead with a G20 Africa initiative as proposed at the Summit.

He also called on world leaders to tackle the devastating social and economic dimensions of this crisis, with a focus on the most affected: women, older persons, youth, low-wage workers, small and medium enterprises, the informal sector and vulnerable groups, especially those in humanitarian and conflict settings.

He noted that this would require designing fiscal and monetary policies able to support the direct provision of resources to support workers and households, the provision of health and unemployment insurance, scaled-up social protection, and support to businesses to prevent bankruptcies and massive job losses.

“What is needed is a large-scale, coordinated and comprehensive multilateral response amounting to at least 10 percent of global GDP,” he said.

He added, “developed countries can do it by themselves, and some are indeed doing so. But we must massively increase the resources available to the developing world by expanding the capacity of the International Monetary Fund, namely through the issuance of special drawing rights, and the other international financial institutions to rapidly inject resources into the countries that need them.”

Guterres also called for coordinated swaps among central banks which an also bring liquidity to emerging economies. He noted that debt alleviation must be a priority – including immediate waivers on interest payments for 2020.

UN Resident Coordinators worldwide will be the drivers of this UN Response and Recovery plan on the ground, ensuring that the wide and diverse expertise and assets of the United Nations system are used most efficiently and effectively to support countries.