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https://news.un.org/en/story/2020/08/1071042
A UN taskforce set up to look into the risks and benefits of
the digital economy, has concluded that it could have a
transformational impact on sustainable development, and
empower citizens, both as taxpayers and investors.
The report,
“People’s Money: Harnessing Digitalization to Finance a
Sustainable Future”, was released by the UN
Secretary-General’s
Task Force on Digital Finance
The Task Force, led by UN development chief Achim
Steiner, and made up of senior figures from the
tech sector, financial institutions, governments, and UN
bodies, was set up by UN Secretary-General António
Guterres in 2018, to improve understanding of the
benefits and risks of the fast-moving financial technology (fintech)
and digital finance sectors.
The initiative is part of the UN chief’s strategy to
support financing for the 2030
Agenda, the UN’s blueprint for a better future,
for people and the planet. The financing needs for the
Agenda, Mr. Guterres said in 2018, are in the order of
between $5 and $7 trillion per year. The shift to digital,
conclude the authors of the People’s Money report, could
provide the means to meet those projected costs.
“Digital technologies, which are revolutionizing financial
markets, can be a game-changer in meeting our shared
objectives”, said Mr. Guterres in
response to the launch of the report. “The Task
Force on Digital Financing of the Sustainable
Development Goals provides leadership to harness
the digital revolution.”
The COVID-19
acceleration effect
During the COVID-19 pandemic,
the popularity of digital tools has grown rapidly, and
demonstrates the potential of digital finance to provide
relief for millions around the world, support businesses and
protect jobs and livelihoods.
Speaking to UN News, Mr. Steiner outlined the acceleration
effect of the pandemic. “Things that we anticipated would
happen over the next few years, have happened in weeks. The
pandemic has allowed governments to see the importance of
overcoming traditional limitations, and identifying and
reaching the most vulnerable.”
Examples include digital cash transfers, which have helped
millions of people in Pakistan, the connection of schools to
broadband, and governments and parliaments connecting
remotely in ways that are now common practice, he added.
The widespread adoption of smartphones, continued Mr.
Steiner, puts powerful digital tools in the hands of more
than a billion people, allowing them to work, socialize, and
manage their finances. He emphasized the importance of
remodelling the financial system, to underscore the fact
that the trillions of dollars’ worth of investment flowing
around the world, ultimately come from ordinary people.
“Citizens are the owners of this wealth, which is made up of
pensions, and savings. The Task Force was keen to bring back
the notion that the citizen is at the centre of the economy.
Citizens need greater transparency, and to have a say over
where their pension contributions go. And, as well as
returns for investors, we also need to see public purpose
benefits. Digital finance is a significant opportunity for
citizens to re-engage, because this is a way to address
major challenges, such as climate change.”
Digitalization is a
choice
The report identifies five ways for harnessing
digitalization, which cover much of global finance. Firstly,
the huge amounts of money flowing around the world needs to
be invested in a way that supports the Sustainable
Development Goals of the 2030 Agenda. Public
finances need to be more effective and accountable. Savings
need to be invested for long-term development projects,
using digital tools. And there needs to be more financing
for small and medium-sized businesses, which are crucial for
generating employment and income.
A key message of the report is that digitalization, and the
way that it is used, is a choice, not an inevitability.
There are considerable digital risks, such as increased
exclusion, discrimination and inequalities. The five action
areas point the way for governments to use digitalization
for good. |
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“Digitialization must democratise the governance of finance
to democratise finance itself”
United Nations Secretary-General António
Guterres
The final report of the Task Force on Digital Financing of
the Sustainable Development Goals was launched on 26 August
2020 in New York by United Nations Secretary-General Antonio
Guterres together with the Task Force Co-the two Task Force
co-Chairs Achim
Steiner,
UNDP administrator
and Maria
Ramos, until recently CEO of ABSA Group.
They were joined in a panel discussion by Task Force members
Patrick Njoroge, Governor, Central Bank of Kenya; Natalie
Jabangwe, Chief Executive Officer, EcoCash; Eric Jing,
Executive Chairman, Ant Group; and Ceyla Pazarbasioglu, Vice
President for Equitable Growth, Finance and Institutions at
the World Bank Group, moderated by Simon Zadek,
head of the Task Force Secretariat. |
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Digitalization can propel us towards achieving the
Sustainable Development Goals (SDGs).
Our response to today’s unprecedented crisis demonstrates
how digitalization can be harnessed to support vulnerable
people, reduce inequalities, sustain livelihoods and
strengthen solidarity. If unchecked, however, it could
deepen exclusion, increase inequality and further divide us.
Digital disruption creates an historic
opportunity to reshape finance.
Mobile platforms and data analytics are bringing
sophisticated financial services to mass markets. Tens of
millions of businesses depend on more than 2 billion people
spending trillions of dollars annually online. Governments
are digitalizing public finance, and a growing portion of
the world’s public equities trades are executed by
computer-managed funds.
Digitalization can have a transformative impact by
empowering people
in financing.
The Task Force has focused on how digitalization can
support financing that meets the priorities of the people it
is intended to serve, by empowering them as savers, lenders,
borrowers, investors, and taxpayers. These priorities are
collectively represented by the SDGs, the shared agenda
adopted by all United Nations Member States.
The Task Force highlights that digitalization is already
making a difference,
but that far more can be achieved by realising keystone,
catalytic opportunities.Notable is accelerating the use of
domestic savings for long-term development, enhancing
accountability of public financing, making SDGs count in
global financial markets, financing small and medium
enterprises, and promoting SDG-aligned consumer spending.
Barriers and digital risks need to be overcome
in harnessing digitalization’s potential in
financing the SDGs, with barriers including inadequate
digital infrastructure, and access, affordability and
capabilities, and digital risks such as gender and minority
biases, increased short-termism, cyber vulnerability, and
market concentration.
Governance innovations are pre-conditions
for harnessing digitalization in delivering financing of the
SDGs. Regulations and standards governing digital financing
need to be informed by SDG commitments and goals, with a
particular need to ensure that the SDGs inform the
governance of a new generation of global digital financing
platforms with cross-border, spillover impacts.
The UN can play a key role
in realizing opportunities, overcoming barriers and
mitigating risks in harnessing digitalization in financing
the SDGs. Centrally is support to Member States in realizing
catalytic opportunities, aligning digitalized finance
ecosystems with the SDGs, progressing governance innovations
to mitigate risks, and advancing digital financing in the
UN.
The historic opportunity to harness digitalization in
reshaping finance must be grasped now,
given the urgency to finance the SDGs, the short window of change
resulting from a period of digital disruption, and the
potential to maintain the digital momentum of the current
crisis.
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