United Nations Conference on Trade and Development (UNCTAD) Policy Briefs

The coronavirus disease (COVID-19) outbreak has infected more than 2,950,000 people and killed more than 202,000 worldwide to this date. While the overall economic impact of this outbreak is still unfolding, there are strong indications that it will cause the largest economic downturn since the 2008 financial crisis. This policy brief makes a case for protecting science, technology and innovation (STI) budgets during the COVID-19 crisis and its aftermath, based on the fact that continued investments in STI will be critical to the achievement of the 2030 Agenda for Sustainable Development. Even though developing countries as a group have recorded continued growth in R&D expenditure over recent years, the absolute levels remain small and their STI capabilities limited. It is therefore crucial for developing countries to reinforce their commitments to protect investment in STI and to design recovery packages that leverage technology and innovation for sustainable development. Stability and predictability of funding for science, technology and innovation are critical for the ability of national innovation systems to support sustainable development. During and after the COVID-19 crisis countries, particularly in the developing world where innovation systems remain fragile, should protect science, technology and innovation resources from austerity drives given their long-term implications for development strategies. The policy responses proposed in this policy brief introduce concrete steps in effectively continuing investments in science, technology and innovation, both during and after the crisis, towards the achievement of the 2030 Agenda.

The crisis stemming from the coronavirus disease (COVID-19) has turned a spotlight on financial vulnerabilities in developing countries and the limitations they face in mobilizing domestic financial resources to respond to the pandemic at the required scale. This brief takes a step back from the COVID-19 crisis to highlight a longer-standing trend which is adding to the troubles facing developing countries. For the past two decades, net financial resource transfers between developed and developing countries have typically favoured the former and disadvantaged the latter. Overall, more financial resources have gone from developing to developed countries than have been returned. The policy brief looks at the main drivers of this net financial resource transfer to the developed world, including illicit financial flows from developing countries, and offers some policy proposals to address this problem.