UNGA Discusses MICs’ Challenges in Classification, Financing, SDG Implementation
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The UNGA President said MICs will not achieve the 2030 Agenda unless the obstacles faced by these countries are addressed.

Several countries raised concerns on the modalities used to assess development levels, saying per capita income does not reflect the diversity of MICs.

4 December 2018: The UN General Assembly (UNGA) held a high-level meeting on challenges faced by middle-income countries (MICs) in implementing the 2030 Agenda for Sustainable Development. The meeting featured an opening segment, interactive panel discussions on MICs and the 2030 Agenda and the role of South-South and triangular cooperation, and a plenary segment.

In an opening statement, UNGA President María Fernanda Espinosa Garcés (Ecuador) said MICs contribution to the global gross domestic product (GDP) had increased from 18% to 33%, and MICs also made progress in decreasing poverty and hunger and increasing social inclusion. She observed that MICs are home to 70% of the world’s population, underscoring the importance of supporting MICs to improve their living conditions and fulfill their development needs.

The sustainable development of MICs has the potential to stabilize regions in conflict.

Leaders reflected on MICs and the 2030 Agenda, including during a panel discussion on the topic. Espinosa said MICs will not achieve the 2030 Agenda unless the obstacles faced by these countries are addressed, including eliminating gaps in inequality and financing and empowering women to boost their participation in the economy and politics.

Elliott Harris, UN Department of Economic and Social Affairs (DESA), highlighted the “leading role” MICs play in achieving the SDGs, particularly with regard to poverty reduction, and the need to tackle gender-based inequality in MICs. He recommended focusing on building resilience against external shocks to help MICs avoid falling into the “middle-income trap,” saying this is critical to achieving the SDGs.

UN Economic and Social Commission (ECOSOC) Vice President Valentin Rybakov (Belarus) called for greater international support for MICs to achieve the SDGs, noting that MICs face challenges such as debt, mass migration and technological changes that must be addressed in a coordinated manner. Rybakov also stressed that the sustainable development of MICs has the potential to stabilize regions in conflict.

Several countries raised concerns on the modalities used to assess development levels. Gaston Alphonso Browne, Prime Minister of Antigua and Barbuda, said his country is disqualified from access to concessional loans and grants due to “skewed constructs of what represents development,” and warned that MICs will experience economic decline and social dislocation if the way they are assessed does not change. Browne said access to finance, debt burden, anti-competition rules and fair trade should be among the factors used to measure development, rather than simply using per capita income. The Philippines and Mauritius also stressed the importance of understanding individual challenges faced by MICs, rather than grouping States solely based on per capita income. Espinosa agreed that a classification based on per capita income does not “reflect the diversity of the needs, challenges and capacities that determine the development options and trajectories of MICs.” Abdoulaye Mar Dieye, UN Development Programme (UNDP), also recognized the definitional challenge faced by MICs, saying countries must focus on “transitioning up and forward on the development ladder.”

Tao Zhang, International Monetary Fund (IMF), and Carolina Sánchez-Páramo, World Bank, said their organizations are exploring ways to account for country-specific challenges when addressing MICs’ needs. Sánchez-Páramo said the World Bank has introduced new methodologies to measure poverty that will facilitate better assessments of inequality, and has introduced a multidimensional poverty measure that accounts for means of deprivation, including lack of education.

On financing concerns, Costa Rica for the Like-Minded Group of Countries’ Supporters of MICs observed that, as MICs’ per capita income increases, their access to official development assistance (ODA) and external public financing often decreases, and it does so faster than countries can compensate for with higher tax revenues. She urged increasing and easing countries’ access to development financing and climate finance to support national development plans. Browne proposed setting up a global partnership on debt relief, explaining that servicing debt amid frequent external shocks and disasters restricts MICs’ spending on education and new technologies.

A panel discussion on South-South and triangular cooperation recognized South-South cooperation as an equitable and strategic tool for development. Espinosa supported a renewed commitment on South-South cooperation and highlighted the upcoming Second High-level UN Conference on South-South Cooperation (BAPA+40), convening in Buenos Aries, Argentina, in March 2019, as an opportunity to address key gaps. Harris described South-South cooperation as a catalyst for mutual learning. Browne for the Caribbean Community (CARICOM) said South-South cooperation, North and triangular cooperation are critical in assisting MICs, and suggested that MICs’ situation should become a regular item on the UNGA’s agenda.

Morocco said public-private partnerships are a favorable framework for South-South and triangular cooperation. Qatar attached great importance to ODA and recognized South-South and triangular cooperation as critical in fighting poverty, particularly in MICs, and in trade. The EU said it contributed 57% of global ODA in 2017, and that with MICs, its assistance focuses on partnerships based on trade, investment, innovation and knowledge exchange. The EU said it will mobilize over €45 billion of added investments in developing countries, including MICs, and expressed support for implementation of the Addis Ababa Action Agenda on financing for development (AAAA) and domestic resource mobilization (DRM). Egypt for the Group of 77 and China (G-77/China) suggested exchange of experiences, improved coordination and better, focused support from international organizations to address challenges faced by MICs.

Participants also addressed, inter alia: the disproportionate impacts of climate change on MICs and particularly small island developing States (SIDS); the potential of the reform of the UN development system to better position the UN to assist MICs; and the tax-to-GDO ratio.

In closing remarks, Espinosa said the Secretary-General will use the information from the session to present a report at the Assembly’s 74th session. [UN Meeting Coverage] [UNGA President ‘s Statement] [UNDP Statement] [UNGA Letter on Event]

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