Reduced Inequalities

This policy brief focuses on the specific issue of disaster-response for three reasons. First, the disaster-response cycle describes a well-documented pattern of fiscal surge and a crowding out effect over much needed adaptation investments; second, climate vulnerability will only increase the volatility of this cycle in the future, threatening both the prospects for sustainable and inclusive growth as well as an increasingly untenable trajectory for fiscal sustainability; and third, because fiscal and financial capital flows to SIDS pose a challenge to the international financial architecture at large. The characteristics of the problem are known, as well as the size of the fiscal and financial burdens; this is a problem that would not be a problem if the incentives for public and private capital flows were aligned in the right direction. This presents a challenge for the multilateral system at large.

This brief examines how the women members of peace groups, established through a UNDP initiative in Iraq, overcame traditional barriers to play the role of peacemakers and social developers in their communities. From their perspective, the brief highlights the opportunities made available in post-conflict Iraq and identifies three realms that remained key in assuming their new roles in society: family dynamics, interactions with male community members and the media. Thus, it provides an understanding of the pathways through which women in traditional and conflict-affected societies like Iraq assumed the responsibility to rebuild their communities and initiate a structural shift in gender equality and social norms.

The pandemic has progressed differently across the world. Using monthly data on COVID-19 cases and fatalities, we evaluate whether income inequality is an important factor in explaining cross-country differences in the spread and mortality of the virus. The results show that income inequality is positively correlated with the number of COVID-19 cases. Higher income inequality is associated with a more rapid spread of the virus and an increase in the number of cases, indirectly increasing mortality rates as well. Also, higher levels of inequality are associated with reduced effectiveness of social distancing measures in containing new infections. Thus, elevated inequalities place societies in a more vulnerable position to confront this pandemic, and more unequal countries would need more robust public responses to contain the spread of the virus.

At any age, intersecting factors such as poverty, disability, social isolation and exposure to abuse can increase the risk of vulnerability and weaken resilience in the case of adverse events. The COVID-19 pandemic, rising inflation, natural disasters, and war are examples of adverse events that have disproportionately affected vulnerable persons, including many older persons. Often, the capacities and vulnerabilities of older persons remain invisible as their voices are less heard and their needs less known due to a lack of data and research, and their insufficient involvement in decision-making. A key challenge, therefore, is to inform, design and implement comprehensive policies that protect vulnerable older persons from adverse outcomes, enhance resilience and allow them to fulfil their full potential in later life. The policy strategies presented in this Policy Brief cover the areas of income and housing, health and long-term care, prevention of violence, abuse and neglect, and social participation as well as the importance of adequate data and research and the involvement of older persons in decision-making.

Paid domestic work employs many women in developing countries. Paraguay, where 94 percent of domestic workers are women and more than 90 percent of these jobs are informal, represents an extreme case of a problem that is common throughout the globe. These workers lack access to social security and generally endure precarious working conditions. What are the different legal, institutional, social and gender barriers that prevent domestic workers from having greater access to social security? Drawing on different sources of data from Paraguay, including the voices of both domestic workers and their employers, this study shows how persistently low levels of social security coverage in this sector are a product of complex interlocking factors: discriminatory cultural and gender beliefs, lack of accurate information and knowledge about social security, the low bargaining power of informal domestic workers and the low capacity for labour inspection that prevail in the sector. Based on these observations, the conclusions lay out guidelines to design integrated public policies for the sector’s formalization.

Twenty-five developing economies, the highest number since 2000, spent over 20 percent of their government revenues in 2022 on total external debt servicing. The average low-income country spends about 2.3 times more on interest payments than on social assistance. Due to the economic shocks during 2020-2023, we project that 165 million people fell into poverty using the $3.65-a-day poverty line—the entirety of those living in low- and lower-middle-income economies. A pause in debt payments would allow developing economies weighed down by debt to mitigate some social effects of these shocks, using resources earmarked for debt servicing. This policy brief presents simulations that show that the annual cost of mitigating the additional 165 million poor would reach US$14.24 billion, or 0.009 percent of global GDP and a little less than 4 percent of total public external debt service in 2022—if the income losses among the already poor prior to the shocks are also included, the mitigation cost would reach US$107.11 billion, or 0.065 percent of the world’s GDP and around a fourth of total external public debt service.

Sustainability-themed bonds are growing in popularity, including among development practitioners who view them as promising instruments in the delivery of more, especially climate, finance in developing economies. This UNDP Development Futures Working Paper provides an overview of the thematic bonds market and a discussion of issuer incentives as well as some of the main challenges related to additionality and credibility. To improve the potential of thematic bonds as a tool for sustainable and equitable development, the paper proposes five features that any official sector-supported model should prioritize. These features aim to deliver substantially lower funding costs for ‘green activities’ and improve market access as well as the credibility of bonds, which include strengthening issuer commitments to ambitious targets and incentives to implement climate-friendly policies. Finally, it is important to recognize the limitations of donor-supported models. High debt burdens in many countries limit the use of debt instruments, and these will compete for limited official sector funds with other, potentially fairer, means of delivering climate finance.

Population ageing is a global phenomenon, a shift towards an increasing share of older persons in the population. Even the least developed countries (LDCs) are beginning to experience the progressive ageing of their populations, and this process is expected to accelerate during the second half of the current century (United Nations, 2023). Despite its far-reaching consequences, the emergence of this trend in LDCs has attracted only limited attention from both national policymakers and the international community. Most LDCs are still early in the decades-long process of population ageing, which is a direct consequence of the demographic transition towards longer lives and smaller families. Population ageing begins with a slowdown in the growth of the younger population but eventually involves the rapid growth of the older population. Early in this process, countries have an opportunity to benefit from the demographic dividend – a faster rate of economic growth on a per capita basis due to an increasing share of the working age population (and thus a falling dependency ratio) caused by a sustained decline in the fertility level. Although temporary, this opportunity often lasts for several decades. It comes to an end once the older population begins to grow more rapidly, leading to a rising old-age dependency ratio. Preparing for population ageing in LDCs will be critical for achieving sustainable development and ensuring that no one is left behind. Maximizing the benefits from the demographic dividend will provide an opportunity for these countries to develop economically before their populations become much older. It is also consistent with a pledge of “working together to support the acceleration of the demographic transition, where relevant”, as agreed in the Doha Programme of Action for the Least Developed Countries for the Decade 2022–2031 (United Nations, 2022).

Converging crises such as the COVID-19 pandemic, the war in Ukraine, climate change and various conflicts, have become a defining challenge of our time. Crises that might have previously been contained within a specific geographic space are now propagated rapidly through globally interconnected systems and networks in areas such as economics, finance, the environment and health. This Policy Brief highlights the following: (a) converging crises have reversed and exposed the fragility of global SDG progress and imposed high costs on developing countries, (b) reducing inequality and poverty is critical to building resilience against the impact of shocks and crises, and (c) investment in the SDGs, particularly those that underpin social development, can help build resilience of developing countries to multiple crises, as seen in the case of the COVID-19 pandemic.

The COVID-19 pandemic has revealed an acute deficiency in care services, highlighting the unfair and unsustainable model on which the care system traditionally relies. Recent surveys indicate that more than three quarters (76.4%) of unpaid domestic care work worldwide is done by women, hindering their access to other opportunities. Simultaneously, increasing care needs due to rising dependency ratios are challenging the viability and sustainability of the traditional care provision system. To meet the growing care demand among the young, old, ill and disabled, societies must move away from such a system and invest in a sustainable care economy to provide affordable, high-quality care services while recognizing, reducing and redistributing (“3Rs”) the unpaid care burden borne by women. Besides emphasis on SDG 5, this policy brief focuses on opportunities and challenges in scaling a sustainable care economy to create new sources of fair jobs and reshape current economic and financial systems to make it more equitable, contributing to a broader range of SDGs, including SDG 1, 3, 4, 8, 10, 11 and more. While the research is built on data mostly from China, the findings may benefit a wide range of emerging economies with similar development contexts.