The current economic turmoil in Pakistan

Authors: Armida Alisjahbana, Woochong Um and Kanni Wignaraja*

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

The Covid-19 pandemic and the crises of conflict, hunger, climate change and environmental degradation are mutually aggravating, pushing millions of people into acute poverty, health and food insecurity. The Russian invasion of Ukraine has further disrupted supply chains and led to spikes in food and fuel prices.

A region at risk

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

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

Yet despite all the economic contraction, greenhouse gas emissions in the Asia-Pacific region have continued largely unabated, and the long-running climate crisis continues to rage.

The positive effects of less waste generation and air pollution, for example, were short-lived. Action is lagging, even as many countries in Asia and the Pacific have pledged to step up the ambition of their climate action and pursue a just energy transition. The political and economic will to move away from fossil fuels remains weak, even with soaring oil and gas prices in the region.

As the conflict in Ukraine increases uncertainty and exacerbates food and fuel shortages, driving up prices, security is increasingly at the center of economic and political priorities.

This confluence of issues adds to the shocks already dealt with by the pandemic and triggers governance crises in parts of our region. Again, the poorest and most vulnerable groups are the most affected.

Price pressures on basic necessities like food and fuel are straining household budgets, but governments will find it harder to intervene at this time. Government responses to the previous series of shocks have reduced fiscal space while leaving in their wake an increase in the national debt burden.

It has never been more important to ensure that the integrated aspects of economic, social and environmental sustainability are incorporated into our recovery approaches.

Like our joint ESCAP-ADB-UNDP 2022 report on Building together For the highlighted SDGs, despite significant pockets of good practice, countries in Asia and the Pacific need to act much more decisively – and faster and at scale – on this imperative. It redefines what progress means and how it is measured, as development that promotes the well-being of the whole – people and the planet.

Extraordinary Agenda for Extraordinary Times

All of this gives pause for thought in achieving the ambitious SDG agenda. But these interrelated shocks are also the result of a failure to advance the SDGs as an integrated agenda.

We need unconventional responses and investments that fundamentally change what drives sustainable development outcomes. Rather than treating our current looming energy, food and human security crises as separate, we must address their interdependencies.

For example, a determined focus on tax reforms that deliver environmental and social benefits can yield big payoffs. Asia and the Pacific can take the lead in acting on long-standing commitments to eliminate costly and environmentally harmful subsidies, including for fossil fuels.

Some countries have taken advantage of reduced fossil fuel consumption during Covid-19 shutdowns and mobility restrictions to raise fuel taxes to raise money for stimulus programs and provide health insurance and social security. social protection for the least protected.

There are also opportunities to reallocate the estimated US$540 billion spent each year in global agricultural subsidies to promote more inclusive agriculture and healthier and more sustainable food production systems.

Better targeting smallholder farmers and rewarding good practices such as promoting a shift to regenerative agriculture can help transform food systems, restore ecosystems and protect biodiversity.

Just Transitions

For our part, as UN agencies and multilateral organizations, we are committed to supporting countries to pursue just transitions towards rapid decarbonization and climate resilience. Scaling up the deployment of greener renewables will be key to meeting energy security needs.

Likewise, the current food crisis must serve as a catalyst for an urgent transition towards more sustainable and secure food production and markets at the local level. Agricultural practices that promote local resilience, embrace nature-based solutions while increasing efficiency, and support climate change mitigation practices can enhance long-term food security.

The SDG test solves and forces us to face the difficult trade-offs of recovery. To emerge from the interconnected crises of energy, food and fiscal space, we must accelerate the transformations needed to end poverty and protect the planet.

We must ensure that by 2030 all peoples, not just a few, enjoy a higher level of peace and prosperity.

The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), the Asian Development Bank and the United Nations Development Program will organize a side event at the High-Level Political Forum on Sustainable Development on July 12, 2022, which will explore these themes 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 Deputy Administrator of the United Nations Development Program (UNDP).

Woochong Um is Deputy Managing Director of the Asian Development Bank (AfDB).

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