Current economic turmoil in Pakistan

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Authors: Armida Alisjahbana, Woochong Um and Kanni Wignaraja*

The start of the United Nations’ “Decade of Action” to achieve the Sustainable Development Goals (SDGs) also marked the beginning of an unprecedented period of overlapping crises.

The Covid-19 pandemic and conflict crises, hunger, climate change and environmental degradation are mutually reinforcing, driving millions of people into acute poverty, health and food insecurity. The Russian invasion of Ukraine has further disrupted supply chains and pushed up food and fuel prices.

An endangered region

The devastation caused by efforts to contain the spread of Covid-19 across the Asia-Pacific region is now well documented. At least 90 million people are likely to be living in extreme poverty, and more than 150 million and 170 million people live below the poverty line of US$3.20 and US$5.50 a day, respectively.

The pandemic has highlighted the consequences of uneven progress on the SDGs and exposed glaring gaps in social protection and health systems. The momentum of the recovery in Asia and the Pacific has been shaped by access to immunization and diagnostics, and by the structure and performance of economies and public health systems.

But despite all the economic contraction, greenhouse gas emissions in the Asia-Pacific region have continued largely unabated, and the long-lasting climate crisis rages on.

The positive effects of less waste and less air pollution, for example, were short-lived. Action is lagging behind, although many countries in Asia and the Pacific have committed to increasing their climate action ambitions and moving towards a just energy transition. The political and economic drive to move away from fossil fuels remains weak, even with rising oil and gas prices across the region.

As the Ukraine conflict leads to greater insecurity and worsening food and fuel shortages, leading to rising prices, security is increasingly at the center of economic and political priorities.

This confluence of issues is adding to the shocks that the pandemic has already dealt with and is triggering governmental crises in some parts of our region. Again, the poorest and most vulnerable groups are hit the hardest.

Price pressures on basic necessities like food and fuel are straining household budgets, but governments will find it harder to intervene during this time. Government responses to the previous series of shocks have reduced fiscal space while entailing higher public debt burdens.

Ensuring that the integrated aspects of economic, social and environmental sustainability are incorporated into our reclamation approaches has never been more important.

As our joint ESCAP-ADB-UNDP 2022 report on “Building Forward Together for the SDGs” highlighted, while there are important examples of good practice, Asia and the Pacific countries must respond to this need with much more determination – and faster and on a larger scale. This redefines what progress means and how it is measured, as development that promotes the well-being of the whole – people and planet.

Extraordinary agenda for extraordinary times

All of this is a sobering backdrop to achieving the ambitious SDGs agenda. But these interlocking shocks are also the result of a failure to advance the SDGs as an integrated agenda.

We need unconventional answers and investments that fundamentally change what determines sustainable development outcomes. Instead of treating our current looming energy, food and human security crises separately, we need to look at their interconnectedness.

To illustrate, a determined focus on tax reforms that deliver environmental and social benefits can yield big gains. Asia and the Pacific can lead by taking action on longstanding commitments to end costly environmentally harmful subsidies, including on fossil fuels.

Some countries took advantage of reduced fossil fuel consumption during Covid-19 lockdowns and mobility restrictions to increase taxes on fuel to raise funds for recovery programs and provide health insurance and social protection for the most vulnerable.

There are also ways to repurpose the estimated $540 billion spent each year on global farm subsidies to promote more inclusive agriculture and healthier, more sustainable food production systems.

Targeting small farmers more closely and rewarding best practices, such as encouraging a shift to regenerative agriculture, can help transform food systems, restore ecosystems and protect biodiversity.

Transitions only

For our part, as UN agencies and multilateral organizations, we are committed to supporting countries in pursuing a just transition towards rapid decarbonization and climate resilience. Expanding the use of greener renewable energy will be key to meeting energy security requirements.

Similarly, the current food crisis must be a catalyst for an urgent transition towards more sustainable, locally safer food production and markets. Agricultural practices that promote local resilience, apply nature-based solutions while increasing efficiency, and support climate protection practices can strengthen long-term food security.

The SDGs test resolves and challenges us to address the difficult trade-offs of recovery. To emerge from intertwined energy, food and fiscal crises, we must accelerate the transformations needed to end poverty and protect the planet.

We must ensure that by 2030 all people, not just a few, enjoy greater peace and prosperity.

The UN Economic and Social Commission for Asia and the Pacific (ESCAP), the Asian Development Bank and the UN Development Program will host a side event on July 12, 2022 at the High Level Policy Forum on Sustainable Development that will address these issues of the further.

*Armida Alisjahbana is Under Secretary-General of the United Nations and Executive Secretary of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

Kanni Wignaraja is Assistant Administrator of the United Nations Development Program (UNDP).

Woochong Um is Director General of the Asian Development Bank (ADB).

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