By Rolf Wenzel
The Covid-19 pandemic is an unprecedented crisis which will have lasting effects on countries and economies worldwide. Not only has it upended the lives of billions, but it has also exposed stark inequalities in our societies as we see its devastating impact on lower-income, marginalised and vulnerable groups. Addressing these inequalities is key for an inclusive recovery because societies are only as resilient as their most vulnerable elements.
Significant amounts of public funds have already been assigned to mitigate the immediate consequences on health and employment across the world. At the CEB we faced a substantial demand from member countries to finance emergency health expenditure and income support packages.
We have adapted our lending instruments to respond best to the needs of our member countries to help strengthen healthcare service delivery and broaden civil protection measures, thus ensuring business continuity during the on-going pandemic, while rolling out initial measures for a resilient socio-economic recovery.
Thanks to our “flexible, timely and targeted” approach we provided support to 20 countries with more than €3 billion in financing through fast-track loans.
The need for a long-term vision
Beyond the emergency, which many countries are still facing given the second waves, the recovery will be long and require mobilisation of all efforts. Short-term measures alone will not be sufficient. They must be accompanied by a long-term vision to build a more inclusive and resilient world that is able to ensure the wellbeing of all citizens while protecting the environment.
The Covid-19 crisis clearly showed the lack of resilience of health, education and other social sectors in many affected countries. This manifest lack of resilience of public infrastructure and services also increased awareness about their potential vulnerability to other shocks.
Getting today’s investment choices right is crucial as they will determine the path our economies take in the critical decade to achieve economic recovery while bridging socioeconomic inequalities and addressing climate change. Public development banks will have a key role to play in this.
As a financial institution with a social mandate we firmly believe that investment in social infrastructure can simultaneously address social, environmental and economic objectives. Our experience shows that social, environmental and economic objectives are not only compatible, but can in fact be mutually reinforcing. If properly designed and implemented social infrastructure can support a green and inclusive transition towards a robust, resilient and sustainable economic recovery.
- Implementing energy efficiency measures in the renovation and expansion of ageing building stock, particularly for social housing and vulnerable populations;
- Investing in water and wastewater networks and their unique potential to generate multiple benefits and to enhance the resilience of communities and ecosystems;
- Explicitly mainstreaming inclusiveness, environmental sustainability and climate-related considerations in all social infrastructure investment for the provision of public services (e.g. education, health); and
- Supporting integrated territorial approaches to investment in inclusive and resilient urban and regional development.
Responding to local needs
Cities and regions will have a crucial role in boosting social investment. Many European local authorities, for example, have the goal of becoming more resilient, inclusive and sustainable but these issues must be tackled based on an integrated approach to territorial and urban development. Cities that have adopted integrated planning have managed to roll out strategies to enhance resilience, social cohesion and sustainability.
Public development banks can help national and local beneficiaries design and implement a more environmentally sustainable and socially inclusive economic recovery in post-COVID-19 world. They can support integrated planning and investment that address multiple social, economic and environmental objectives and build resilience to a broad spectrum of risks and shocks, including by supporting local authorities.
Building a better future, now more than ever, requires sustainable social investments and investments in social infrastructure. The Finance in Common Summit is a timely opportunity to mobilise the development finance community and galvanise common action for more inclusive, sustainable and resilient economies and societies. As one of the partners to the Summit we invite you to join us and make a case for social investment – for people, planet and prosperity.
Rolf Wenzel is Governor of the Council of Europe Development Bank (CEB), elected by the Bank’s member states for a five-year mandate in 2011 and re-elected in 2016. Before joining the CEB, Mr. Wenzel was Director General of the Financial Policy Department of Germany’s Federal Ministry of Finance and also served as Germany’s Alternate Governor in the regional multilateral development banks.