Excellencies,
Distinguished delegates,
Ladies and gentlemen,
I am pleased to join you today at the 6th session of the Intergovernmental Group of Experts on Financing for Development of UNCTAD.
I have the honor to chair, on behalf of the UN Secretary-General, the Inter-Agency Task Force on FFD. We in DESA a firmly committed to our custodian role in follow-up to implementation of the Addis Ababa Action Agenda, and value greatly UNCTAD’s work to advance important aspects of the financing for development agenda. I look forward to our continued joint and collective efforts as we strengthen our partnership in the coming months and years.
Ladies and Gentlemen,
This meeting comes at an opportune time, as the world is revisiting strategies to finance the SDGs in the face of unprecedented crises.
2022 has brought with it numerous shocks to the global socio-economic fabric. Geopolitical tensions, elevated food and energy prices exacerbated by the war in Ukraine, and tighter financial conditions leading to a stronger US dollar are putting many developing countries under immense fiscal and financial strain.
This perfect storm has left many countries with unsustainable debt burdens. Already, more than half of the world’s poorest countries are either at high risk or already in debt distress. Urgent measures are needed to fend off the threat of a systemic debt crisis.
In parallel, the latest estimates place annual SDG financing needs at 4.3 trillion dollars. Without boosting long-term investments in sustainable development, eradicating poverty and achieving the SDGs will be out of reach.
Excellencies,
In the 2022 Financing for Sustainable Development Report, we jointly identified a “great finance divide”, which has sharply curtailed the ability of many developing countries to recover from the COVID-19 pandemic and to invest in sustainable development.
To close this finance divide, I propose actions in three broad areas.
First, provision of additional public and concessional finance.
While official development assistance (ODA) reached its highest level in 2021, it is still not enough. ODA flows from developed economies continue to fall short of the 0.7% of GNI commitment. New and additional resources are needed.
Supporting millions of refugees from Ukraine and elsewhere is critical; yet this should not replace cross-border development assistance to poorer and more vulnerable countries.
Multilateral and public development banks have an important role to play in supporting long-term financing. Scaling up multilateral development bank resources through capital infusion, along with better use of existing capital, is critical to meeting heightened demands.
We should also make greater use of the entire system of development banks. This means stepping up support to national development banks, but also taking advantage of their specific local knowledge and market intelligence.
Finally, the commitment by developed countries to jointly mobilize 100 billion dollars annually in climate finance remains unfulfilled.
At the recently concluded COP27 there was acknowledgement that we cannot afford to carry on with business as usual. Worsening climate shocks, including drought and famine, devastating floods, pests and disease outbreaks, are sounding the alarm on the state of our planet’s health.
We must scale up financing to address climate change and its disproportionate impacts on the most vulnerable. We owe this to ourselves and for future generations.
I welcome the decision to establish and Loss and Damage Fund. I hope that this fund will be made operational at the earliest.
Second, steps must be taken to better align financial markets and private financing flows with the SDGs.
With global private sector liquid assets currently amounting to approximately 450 trillion dollars, there is enormous potential for transformational impact of the private sector in the pursuit of SDGs. But too often, capital flows are drivers of volatility rather than sources for long-term investment.
This will require measures at all levels – addressing global drivers of volatility, strengthening the financial safety net, incorporating climate and SDG risks into financial regulations and credit ratings, and enhancing transparency and comparability of sustainable finance measurements.
To catalyze private financing flows towards the SDGs, the international community also has a responsibility to assist countries to curate bankable SDG-aligned investment opportunities.
Third, we need to take urgent action on debt.
Large debt overhangs in many countries suggest that provision of additional financing alone will not suffice, and that a systematic debt relief initiative should be considered.
Depending on country circumstances, such an initiative could make use of a range of financial instruments. They include debt for SDG or climate swaps, buybacks, or re-profiling with lengthened maturities and state-contingent clauses of existing debts; MDBs could provide financial incentives to support such debt exchanges.
Others will need effective and fair restructurings. Such an initiative would need public funding for write-downs of official debt, and tools and incentives to restructure commercial debt; debt relief envelopes would need to be determined taking climate and SDG investment needs into account.
Ladies and gentlemen,
I leave us with a few words for thought. Let us take the lessons from these multiple global crises and build a more resilient global economy. In this rebuilding, let us bring all major stakeholders, governments, private sector, science community and development actors, to the table for a sound, inclusive and multi-dimensional plan for achieving the 2030 Agenda.
Let us use the SDG Summit and High-level Dialogue on Financing for Development during the 78th General Assembly next year to help reinvigorate ambition to finance and realize the 2030 Agenda.
Building on yesterday’s rich discussions, I look forward to fruitful, actionable and impactful deliberations, over the next two days, on how we can overcome these severe headwinds and close financing gaps to achieve the SDGs by 2030.
I thank you all.