United Nations, May 26: UN Secretary-General Antonio Guterres on Tuesday called for a transformation of extractive industries to support sustainable development and a transition to a green economy.
"We have all heard talk of the resource curse. Our shared responsibility is to ensure that the benefits of mineral resources reach all people in society, not just elites, while safeguarding the natural environment today and for future generations," Guterres told a virtual global roundtable on transforming extractive industries for sustainable development.
"Mineral resources are one of Earth's great endowments. Their extraction plays a dominant role in the economies of 81 countries," which account for a quarter of global Gross Domestic Product, half the world's population and nearly 70 percent of people living in extreme poverty," Guterres noted.
Guterres pointed out the growing dependence less developed countries have on extractive industries.
"Of the world's 72 low- or middle-income countries, 63 have increased their dependence on extractive industries over the past two decades. These industries generate large amounts of foreign exchange earnings, foreign direct investment and government revenues. They have the potential to drive economic growth and poverty reduction," he added.
"Yet, extractive industries are also potentially associated with a litany of ills -- corruption, exploitation, colonialism and racism; environmental degradation, worsening climate change and biodiversity loss; armed conflict, gender-based violence, population displacement, cultural harm and human rights violations," he said.
Guterres stressed the need to improve extractive resource governance through more effective rules and enforcement.
Independent monitoring, including by civil society actors and indigenous peoples, is essential. So, too, is human rights due diligence and effective remedy. Also essential is addressing corruption, revenue mismanagement and illicit financial flows, he said.
The sector can avoid exacerbating inequalities by ensuring the fair distribution of the benefits. This is especially important regarding new minerals and metals on which the technological revolution depends, he added.
Countries need to reduce dependence on revenues from extractive industries. This means diversifying economies to broaden the revenue base, increasing value-added content, adapting tax systems to new needs and accelerating work on a just transition for workers and communities dependent on extractive resources. The extractives sector should also integrate circular economy principles, said Guterres.
He called on countries to invest more in a low-carbon future.
All public and private finance in the extractives sector should be aligned with the Sustainable Development Goals and the Paris Agreement on climate change. Countries and donors need to support the rapid deployment of renewable energy technologies and the phase-out of fossil fuel-based assets, he said.
The first priority is to end coal use. That means no new coal plants to be built or financed. And it means a phase-out of coal use by 2030 in the countries of the Organisation for Economic Cooperation and Development and 2040 in the rest of the world, he said.
To boost these efforts, nations need to shift subsidies from fossil fuel to renewable energy and promote technology transfer. This needs to take account of and mitigate the impacts of ending subsidies on the poorest and most marginalized, he said.
"We have repeatedly seen how sudden changes with inequitable impacts can precipitate social unrest. Support from the whole development finance architecture is paramount so fossil fuel-dependent developing countries can finance a just transition. I urge multilateral development banks, development finance institutions, the International Monetary Fund and other institutions to support this process decisively."
There is a need for greater regional and global coordination to manage shocks and ensure a smooth, just and sustainable transition process, he added.
"Recovery from COVID-19 provides a massive opportunity to support sustainable development. We need all hands on deck to address the triple threat of climate disruption, biodiversity loss and pollution and to promote equitable, inclusive development where no one is left behind," he said. "The extractives sector, which operates at the crucial juncture of resources, ecosystems and people, has an essential role to play in advancing sustainability and equitability."
Source: Xinhua