Financing for New Climate‑Friendly Era Must Be Aligned with 2030 Agenda, Deputy Secretary‑General Tells Eminent Personalities at High‑Level Event

DSG/SM/1120-DEV/3306
11 December 2017

Financing for New Climate‑Friendly Era Must Be Aligned with 2030 Agenda, Deputy Secretary‑General Tells Eminent Personalities at High‑Level Event

Following are UN Deputy Secretary‑General Amina Mohammed’s remarks, as prepared for delivery, at session IV of the High‑level Event of Eminent Personalities of the South, “Fiscal Justice and Financing for Development”, in Quito today:

It is time to usher in an era of fair globalization, with a financial system aligned to the 2030 Agenda [for Sustainable Development] and climate commitments.  The 2030 Agenda for Sustainable Development, Paris Agreement [on climate change] and Addis Ababa Action Agenda [on Financing for Development] point the way.

These plans can promote economic dynamism, social equity and environmental sustainability.  They demonstrate that transforming the global economy to a low‑carbon climate‑resilient path is feasible.  And they show how investing in a sustainable future can end the injustice of poverty.

To seize this immense potential, partnerships will be crucial among the business and science communities, civil society, parliamentarians and Governments.  We all have a stake.  Public finance will be fundamental and we must make it a cornerstone of our efforts.

Let me highlight three key points.  First, official development assistance (ODA) is vital public finance to achieve vital public goods.  I have seen the difference ODA makes in the life of suffering people.  When ODA commitments are met and disbursed consistently and predictably, people and communities flourish.  Entrepreneurship blooms.  Civil society grows stronger.  And that helps improve accountability.  So we need ODA on time and at scale.

We also need to use ODA to mobilize other sources of financing for development.  When we use ODA in a catalytic manner, we can help tap into local investor bases and develop domestic sources of financing for the Sustainable Development Goals.  With catalytic ODA, countries can shift over time from international to domestic sources.  We at the United Nations can work on the ground to help Governments achieve this.

Second, the global economy has more than enough savings to realize the vision of the 2030 Agenda, but these resources need to be better aligned with sustainable development.  Right now, most incentive structures in financial markets do not aim to achieve social returns.  Yet, we have also seen how private investors — many times with the support of public policy and finance — can drive global development by channelling billions of dollars into countries around the world.

The role of public finance can be magnified by efforts to mobilize and leverage private capital into specific development projects through improved incentives, including via blended finance and greater use of public risk sharing financial instruments.  With these policies, individual projects can bring renewable energy to communities, boosting farmers’ crop yields, spurring economic growth and helping countries tackle climate change and poverty eradication.

Additionally, at the global level, our financial system is not channelling savings towards investments in areas in need for the SDGs [Sustainable Development Goals], including sustainable and resilient infrastructure.  We need to reorient the financial system to address this gap.  This implies greater long‑term investment as well as a shift in financial markets to incorporate sustainability indicators.

The United Nations will continue to play its role of promoting peace and security, humanitarian relief and inclusive, sustainable development, thereby lowering the risks for long‑term private investment to help secure SDG outcomes.  In addition, international tax cooperation is critical to ensure that the profits of multinational entities are taxed where economic activity occurs and value is created.  Wealthy individuals should pay their fair share, and not be allowed to hide their wealth.

Our hosts have pioneered new ways for Governments to engage with citizens on tax justice, and I congratulate them on the first successful plebiscite on tax havens held earlier this year.  The entire global community needs to go further to ensure international fiscal justice.

Third, developing countries have an enormous need for investments in sustainable infrastructure.  We need incentives especially for least developed, landlocked and small island developing States.  Sustainable infrastructure saves lives and spurs progress.  We must keep our promise to reach the furthest behind first.

At the same time, we have to address the needs of middle‑income countries, which have widely varying levels of per capita incomes, poverty and inequality, and often struggle to access affordable financing.  I encourage Governments to use the fiscal system to reach vulnerable people on the margins of society.  Developing robust, universal social protection systems will contribute not only to fiscal justice but to economic growth by increasing the economic potential of all.

The United Nations family is ready to work hand in hand with you, at all levels, to deliver financial justice and sustainable development.  On behalf of the Secretary‑General, I am leading a comprehensive review of the United Nations development system, to ensure we are well positioned to support your efforts.  I look forward to working closely with you all.  Thank you.

For information media. Not an official record.