Multiple crises and uncertainties characterise the unprecedented state of the world as the Task Force completes its work. Human tragedy; the fears of a volatile, indefinite health crisis; the implosion of local and national economies with resulting unemployment, poverty and inequality; an extraordinary scale of fiscal and monetary stimuli by those countries that can afford them, and a public finance and sovereign debt crisis for those who cannot. Amidst such turmoil, the persistent and growing threats of climate change and biodiversity loss; and the challenges in securing the national, regional and international cooperation needed to come through this period and build better, with dignity, humanity and hope.
Digitalization, already part of our world, has through this crisis come into its own. Over 1.5 billion children in 188 countries have been affected by school closures due to the pandemic, with many resorting to some form of online learning. Digital finance in particular has become a lifeline for many, and the positive hotspot of a global economy on pause. Digital rails have become the superhighways for large cash transfers by governments to citizens in the face of income losses associated with mandatory lockdowns.
Online shopping has surged through the crisis, with many surveys pointing to a permanent shift in consumer behaviour towards digital purchases. Customer spending through Amazon has surged during the crisis to US$11,000 per second, driving the value of the Seattle-based company up to almost US$1.2 trillion. Alibaba, which emerged as China’s leading ecommerce platform after the 2003 SARS outbreak, is now offering billions of dollars in loans to SMEs at a time when many others are retrenching.
The COVID-19 crisis and its economic aftermath have not created but have without doubt super-charged the trends towards digitalization. In this context, the Task Force’s mandate and recommendations are more important than ever and represent a more urgent agenda to action.
Catalytic opportunities for harnessing digitalization to accelerate financing for the SDGs have never been greater. Many governments have committed to greener and more equitable, short term public stimuli and bailouts, and longer-term recovery plans, driving impact-focused public spending and investments that will require enhanced transparency and accountability underpinned by real-time, digital tagging and assessment. Sustainability-aligned investments in public traded equities have performed remarkably well throughout the crisis, and are expected to grow rapidly, requiring better data and improved financial products. SME access to finance will be a critical factor in the short and longer-term recovery, with algorithmic lending providing an ever-more important basis for targeting and moving funds quickly and safely.
Digital risks will also be more present than ever before. Access to a phone, a bank account and a digital ID is increasingly core to economic health and for some a matter life or death. Yet one or more parts of this digital survival kit are still unavailable to almost half the adult population across most developing countries. The rapid digitalization of public finance makes the need more urgent for robust systems, strong institutions and effective accountability. Cybersecurity and privacy threats represent a growing concern, often affecting the most vulnerable with less advanced capabilities. The accelerated growth of digital financing and global platforms, makes it more pressing to secure the international cooperation and governance innovations needed to ensure that their global, cross-border effects benefit communities in delivering SDG-aligned outcomes.