The seventh Forum on Financing for Development Follow-up (FfD Forum) met last week to formulate policies and strategies needed to improve developing countries’ access to affordable finance amidst “a highly fragile global economic outlook,” compounded by the COVID-19 pandemic, climate change, and “rising geopolitical tensions.” On the side, UN agencies and others launched tools to support national financing systems.
The President of the UN Economic and Social Council (ECOSOC) convened the FfD Forum at UN Headquarters in New York, US, from 25-28 April 2022. The Forum took place as a hybrid event, with virtual and in-person participation. It brought together Heads of State and Government, ministers, and senior government officials, as well as representatives from international organizations, the private sector, civil society, and local authorities.
Addressing the participants, ECOSOC President Collen Vixen Kelapile warned that today, “the ambition of sustainable development for all is facing perhaps its greatest threat since the adoption of the 2030 Agenda seven years ago.” An uneven recovery from the COVID-19 pandemic, vaccine inequity, climate change, and disruptions in the global food, energy, and financial markets caused by the war in Ukraine have put many economies “at the brink of a downward spiral of insolvency, cuts in critical investments, economic contraction and rising unemployment,” said UN Deputy Secretary-General Amina Mohammed in an opening statement she delivered on behalf of UN Secretary-General António Guterres. “The SDGs are in need of an urgent rescue, with FfD being an “essential part of the solution,” she stated.
The SDGs are in need of an urgent rescue. Financing for development is an essential part of the solution.
According to the ‘Financing for Sustainable Development Report 2022,’ which provides the substantive input for the Forum’s discussions, 60% of the world’s least developed countries (LDCs) and other low-income countries are “in or at high risk of debt distress,” and the costs of servicing debt in developing countries are up to eight times higher than in wealthier countries. The situation has been exacerbated by economic shocks, and, as Mohammed noted in her statement, there are now “early signs of a tsunami of potential debt crises, deprivation, discontent and civil unrest.”
The Outcome Document of the 2022 ECOSOC Forum on Financing for Development, negotiated under the leadership of the Permanent Representatives of Grenada and Iceland, recognizes “mobilization of sufficient financing” as a “major challenge in the implementation of the 2030 Agenda for Sustainable Development.” It notes that “progress has not been shared evenly within and among countries, leading to further deepening of existing inequalities,” and stresses that the 2030 Agenda’s success depends on “our ability to mobilize resources.”
The Forum leaders acknowledge that sound social, environmental, and economic policies, along with adequate “fiscal space for critical expenditure and SDG investment,” are essential to ensure an “inclusive, resilient and sustainable recovery.” They further recognize the need to align public as well as private financing flows with the SDGs. Solutions proposed by the Forum leaders include:
- Expanding investments in health and social protection;
- Boosting private investment;
- Enhancing concessional finance;
- Resolving increasing debt distress;
- Strengthening domestic resource mobilization;
- Combating illicit financial flows; and
- Addressing climate change and the digital divide.
To respond to the needs of vulnerable countries, UN General Assembly (UNGA) President Abdulla Shahid highlighted several suggestions he had received from the Board of Advisers on Least Developed Countries, Land-locked Developing Countries and Small Island Developing States (LLS), including:
- Complementing short-term response measures to address inflation, vaccine inequity, and gender equality gaps by longer-term strategies that account for multidimensional vulnerabilities, with international support spanning increased investments, trade facilitation, and reallocation of Special Drawing Rights (SDR) to LLS countries;
- Prioritizing debt sustainability, restructuring, and transparency; and
- Ensuring full implementation of the 2030 Agenda for Sustainable Development, the Addis Ababa Action Agenda (AAAA) on FfD, the Paris Agreement on climate change, and COVAX.
On 26 April, the Governments of Finland and Norway and the UN Development Programme (UNDP) launched the Tax for SDGs Initiative to support developing countries in increasing domestic resource mobilization and achieving the Goals.
On 28 April, the UN Department for Economic and Social Affairs (DESA), UNDP, the Organisation for Economic Co-operation and Development (OECD), and partners launched the Integrated National Financing Frameworks (INFF) Facility. Pioneered in the AAAA in 2015, INFFs aim to provide countries with tools to incorporate financing in national planning and to ensure that financing policies advance the SDGs. The INFF Facility aims to respond to the growing demand from countries for technical support by enhancing knowledge products and knowledge sharing and mobilizing new resources and partnerships to help deliver INFFs. [FfD Forum Landing Page] [FfD Forum Programme] [Side Events Programme] [DESA Press Release] [UN News Story]