Mr. Wu Hongbo Under-Secretary-General for Economic and Social Affairs, Secretary-General for the International Conference on Small Island Developing States
Opening meeting of the first session of the Intergovernmental Committee of Experts on Sustainable Development Financing delivered by Ms. Shamshad Akhtar, ASG for Economic Development
28 August 2013, New York
Distinguished Experts and Representatives,
Ladies and Gentlemen,
I have the honour to address the first session of the Intergovernmental Committee of Experts on Sustainable Development Financing.
To begin with, I would like to briefly put your work in the broader context of what is happening at the United Nations.
Last June in Rio de Janeiro, UN Member States provided the basis for a single UN development agenda beyond 2015 with sustainable development at its core, supported by a set of internationally agreed Sustainable Development Goals (SDGs). Six months ago, the Open Working Group on SDGs started its work. The discussions so far have made clear that the means of implementation for the goals are a critical dimension that will need to be addressed. This will undoubtedly be an important area of work for your consideration.
Also on your agenda will be the issue of improving consistency and coherence of the financing landscape. Financing for development, climate finance, financing for biodiversity, and other finance-related processes have evolved in relative isolation from one another, each following its own course in its own institutional setting in the UN. The deeper integration of the sustainable development and development agendas require a more integrated vision and strategy, one that can help these processes to work in full synergy. How financing landscapes at the national level evolve in countries at different development levels is also an important issue, to which I am sure you will devote space in your deliberations.
Additionally, at Rio+20 it was decided to replace the Commission on Sustainable Development, with a High-level Political Forum. Within the context of a unified sustainable development cooperation framework, the forum can have an important role in ensuring the interface between the discussions on the means of implementation for the sustainable development agenda and the financing for development process as the follow-up to the Monterrey and Doha conferences. Your report will provide important input to these discussions.
The United Nations Department of Economic and Social Affairs will serve as the substantive Secretariat for this important committee. We are strongly committed to providing you with an enabling working environment that ensures an efficient and productive use of your time. Within DESA, the Division for Sustainable Development (DSD) and the Financing for Development Office (FFDO) will support the Committee. In addition to providing substantive support, they will also facilitate whatever communication, formal and informal, you may wish to have with other UN processes related to your work, for example the Open Working Group on Sustainable Development Goals (SDGs) or the financing for development process, in particular in view of the upcoming High-level Dialogue on Financing for Development on 7 and 8 October 2013.
Moreover, as requested by the Rio+20 outcome document, the entire UN system is ready to support your work. In that context, a dedicated inter-agency working group on financing for sustainable development has been created. The Group is chaired by the Department of Economic and Social Affairs and the United Nations Development Programme (UNDP). Its members represent the full range of expertise on financing issues within the UN system. In your folder, you will find a copy of an informal summary of some of the preliminary findings of its work.
To date, this work has generated several key insights:
(1) Although estimates of the financing needs for sustainable development are necessarily imprecise, studies conclude, without exception, that needs are extremely large. Nonetheless, estimated financing needs still represent a relatively small portion of global savings.
(2) Private and public sources of financing will both be necessary. These should be seen as complements rather than substitutes, as each type of financing has unique investment objectives, fiduciary responsibilities, and associated incentives.
(3) Institutional investors are increasingly viewed as a potential source of financing for sustainable development. However, this is unlikely to happen without changes to financial market incentives. In particular, misaligned short-term incentives – particularly by financial intermediaries – impede long-term investment and increase systemic risks.
(4) Ensuring long-term investment for sustainable development can also increase financial stability. In short, stability and sustainability are mutually reinforcing.
(5) When it comes to the private sector, sustainable development financing strategies will need to take a multi-faceted approach, with no one policy approach sufficient on its own. This includes: (i) reducing risks by improving the enabling environment; (ii) leveraging private resources with public funds through risk sharing; and (iii) improving private sector structures to better align private incentives with public goals.
(6) Sustainable development financing strategies must also include public financing at the national, regional, and international levels–both for reducing poverty and development, and for financing of public goods. Domestic resource mobilization is crucial. For developing countries, and the most vulnerable among them in particular, ODA will remain critical, and donor commitments must be met. However, a major challenge lies in how to treat financing for public goods as opposed to financing for poverty reduction, since they are conceptually different.
We hope that this work will provide a useful input to the discussion on your work programme in the next few days. Within the next year, the Working Group will be at your disposal for analytical support whenever it is requested.
I wish you a productive session and ground-breaking work in the twelve months ahead.