2022 Perspectives for the Public Sector

3 Citi Perspectives for the Public Sector Welcome to Citi Perspectives for the Public Sector Julie Monaco Global Head for Public Sector, Banking, Capital Markets and Advisory, Citi A s the world learns to live with COVID-19, many countries continue to face significant social and economic challenges as a result of the pandemic. At the same time, many trends already in the ascendant before the pandemic have gained new urgency in the past 18 months — most notably, increased focus on environmental, social and governance (ESG) issues and the adoption of digital technology. Today’s complex challenges have placed new pressures on governments, requiring creative and proactive solutions. In Latin America, for example, many countries faced significant investment shortfalls in critical sectors of their economies before COVID-19. By shifting their focus to balance sheet optimization and asset monetization, these governments can bridge current financing gaps without giving up potentially valuable long-term revenue streams. However, there is also a recognition that governments and market players need to look beyond the current crisis and make actionable sustainability plans for the future. Despite initial skepticism, the COP26 meetings yielded several notable announcements from countries with the potential to dramatically reduce carbon emissions. Although many of the details in this space remain to be negotiated, the path forward, and the central role of the public sector, is clear. Citi also announced our new partnership with the United Nations Framework Convention on Climate Change, the entity of the United Nations that is driving the global response to climate change. We are proud to be the first U.S.-based financial institution to partner with UNFCCC to bring together various climate stakeholders and audiences to build capacity, connectivity and awareness around the goals of the Paris Agreement. We look forward to working with our sovereign clients and DFI partners to develop innovative sustainable financing solutions that will mobilize private capital to achieve climate commitments and broader SDG goals. Alongside government commitments, public pension funds and sovereign wealth funds are leading the way for incorporating ESG considerations into portfolio construction, driving much-needed capital towards emergent sustainable asset classes. Similarly, corporates and SOEs are under increased pressure to recognize and improve the environmental, social and governance-related impacts of their operations. From the carbon impacts of global trade to the potential for international supply chains to create high-quality, gainful employment, each sector has multiple ESG challenges and opportunities. Throughout this publication, we highlight the many ways Citi partners with clients to ideate and execute new solutions that incorporate ESG considerations into their financing and operations. Digitization has been a key enabler of the sustainability agenda, and will be critical to economic success in tomorrow’s world. Successful leaders recognize how digital, economic, and social transformation are increasingly interlinked and are essential components for any organization or country to evolve. A joined-up digital policy, led by a chief digital officer, should be part of every government’s toolkit. It can generate economic growth by providing crucial infrastructure, technology, and security standards that encourage investment and create new opportunities for citizens, governments and corporates alike. This 2022 edition of Citi Perspectives for the Public Sector leverages our public sector banking team’s expertise to highlight solutions that tackle the world’s challenges and identify opportunities to reduce risk and generate prosperity in a post-pandemic world. We hope you enjoy it and welcome your feedback on the issues raised or topics you would like to see covered in future editions.