31 January 2018: Governments discussed the needs of Middle Income Countries (MICs) in the context of the ongoing process of reform of the UN development system, aimed at aligning it with the 2030 Agenda for Sustainable Development. Participants also addressed specific institutional mechanisms and processes that are needed to increase the effectiveness of the UN system’s support to MICs.

The roundtable discussion titled, ‘The Way Forward of the UN Development System on MICs,’ took place on 31 January 2018, in New York, US. It was co-organized by the Permanent Missions of Belarus and Costa Rica.

UN Deputy Secretary-General Amina Mohammed observed that achieving the 2030 Agenda’s promise to leave no one behind will require a renewed focus on and reinvigorated international support to MICs. She noted that the MICs group is comprised of 108 States, which are home to five billion of the world’s seven billion people, and three quarters of the world’s poorest. She stressed that there are many more vulnerable people living in MICs than in low-income countries (LICs).

Mohammed recalled that the reform proposals advanced by UN Secretary-General Antonio Guterres in December 2017 envision a demand-driven approach, according to which each UN Country Team (UNCT) and Resident Coordinator will need to be able to adapt more flexibly to the particular needs of the country. She emphasized that this will be critical in effectively supporting MICs. Other measures she said will contribute to supporting MICs include strengthening the capacity of Regional Commissions to provide policy support for MICs, and repositioning the system to better support South-South and triangular cooperation.

Ana Helena Chacón Echeverría, Vice-President of Costa Rica, stressed that income per capita and macroeconomic indicators are no longer relevant to define the development realities of MICs. She noted that her government designed and implemented a multidimensional poverty index in order to address poverty beyond economic indicators and allocate government resources more effectively. She lamented the reduction of technical support from the UN and access to concessional finance because of being labeled as an MIC. She welcomed the Secretary-General’s vision of a demand-driven approach and his more complex perspective on development, which she said are aligned with the needs of MICs.

Andrei Dapkiunas, Belarus Ministry of Foreign Affairs, expressed hope that the President of the UN General Assembly (UNGA) will soon appoint co-facilitators for agreeing on the modalities of the UNGA’s high-level meeting on MICs, which he said should take place in late September 2018, after the UNGA 73 general debate. He proposed a series of informal discussions to develop a pool of ideas for MICs in advance of the meeting, aimed at preparing a collective vision that could potentially contribute to a system-wide strategy of engagement with the MICs. He said the UN’s regional commissions have “a great potential” to help MICs meet their needs. Dapkiunas also highlighted the UN Economic and Social Council (ECOSOC) Committee for Development Policy as a structure to be used for the MICs, and suggested appointing a focal point on MICs in the UN Department of Economic and Social Affairs (DESA).

Liu Zhenmin, UN Under-Secretary-General for Economic and Social Affairs, identified several challenges in the UN system’s engagement with the MICs, including: DESA does not have a clear mandate for MICs; and there is no authority figure who can say how many MICs there are and how to categorize them. He highlighted that the UN’s effective support to MICs depends on their governments’ agreement on a system-wide strategy for MICs, and added that DESA will appoint a focal point to facilitate work on the issue.

Zohrab Mnatsakanyan, Permanent Representative of Armenia, said addressing MIC’s needs can create “tectonic shifts” in global poverty reduction. He stressed the need for capacity building in MICs to mobilize the private sector for public-private partnerships (PPPs), and as well as data collection and analysis.

Daniel Titelman, UN Economic Commission for Latin America and the Caribbean (ECLAC), emphasized that gross national income (GNI), currently used to define MICs, is a useful way to reduce poverty but not inequality, and stressed that economic growth by itself does not mean development. He brought up many MICs’ high vulnerability to natural disasters, which he said, paired with their lack of access to concessional financing, makes development gains volatile and reversible. He warned against assuming that a country that has graduated from LICs to MICs is now able to mobilize necessary financing on its own.

In the ensuing discussion, participants raised issues related to the vulnerability index that should be important in assessing a country’s graduation to the MICs category, strengthening sovereign debt management, and addressing illicit financial flows (IFFs) that drain countries’ resources. [Meeting Webcast] [UN Deputy Secretary-General Remarks]