While a daunting $90 trillion would be required to tackle sustainable development challenges in the coming years, speakers at today’s General Assembly Action Event warned that the cost of inaction would ultimately be far deeper, with humanity’s very future hanging in the balance.
Executives from various financial firms — including JP Morgan Chase and AVIVA Investors — joined Member States at the Assembly’s “SDG Financing Lab”, discussing ways to align financial markets with the 2030 Agenda for Sustainable Development. Speakers from across those diverse sectors agreed that private investment in development could be scaled up dramatically by reducing risk and educating companies about the bottom-line benefits of sustainability.
However, many delegates also voiced concern that those opportunities could be overshadowed by a rising tide of nationalism and a resurgence of protectionist policies around the globe. Some urged Governments to resist those trends, calling instead for open, inclusive markets to help level the playing field.
Assembly President Peter Thomson (Fiji) said at the outset that estimates put the cost of achieving all 17 Sustainable Development Goals at $6 trillion annually until 2030. “While these sums may seem enormous, and the complexity of reforms needed to mobilize these funds may seem prohibitive, the fact is that the cost of our inaction will ultimately be far greater,” he said. As the private sector was the custodian of the world’s largest pool of resources, the main challenge was to create the right incentives and enabling environments to help businesses reorient investments towards sustainable development.
United Nations Deputy Secretary-General Amina J. Mohammed agreed that it was in the interest of all countries, companies and people to tap the wealth of good that sustainable development would bring in environmental, economic and social terms. Noting that financial flows and investments were increasingly being aligned with the Goals, she said mobilizing pension funds, the insurance sector and other large pools of capital could produce even greater wins. Sustainability should guide the creation of incentive structures, inform consumer preferences and shape shareholder interests, she said, adding: “The dividends will reverberate far and wide.”
Mahmoud Mohieldin, Senior Vice President for Partnerships, United Nations Relations and the 2030 Agenda of the World Bank Group, called on all stakeholders to take investment more seriously in such areas as human resource development, affordable housing and infrastructure improvement. Noting that the private sector was moving beyond philanthropy to better understand the opportunities presented by the Goals, he nevertheless underscored the importance of standardizing sustainability into markets on a larger scale.
As the Assembly opened its panel discussion on the theme, “What will it take to finance the Sustainable Development Goals? From ambition to reality”, keynote speaker Sunil Bharti Mittal, Founder and Chairman of the Indian telecommunications giant Bharti Enterprises, recalled that trade liberalization had lifted 1 billion people out of poverty worldwide. Pointing out that India was among the most open countries in terms of global investment, he expressed concern over protectionist voices emanating from some parts of the United States and Europe. He also emphasized the role of Governments in mandating corporate social responsibility, pointing to India’s establishment of a “name-and-shame” index in that regard.
Matt Arnold, Global Head of Sustainable Finance for JP Morgan Chase, said the main challenge to investing private capital in sustainable development projects was risk. Banks did not own the funds they lent, and depositors expected to get their money back. JP Morgan had nevertheless begun to chart potential action on the Sustainable Development Goals, he said, stressing that banks could be an important force for good but “we need to be educated.”
A number of speakers during the ensuing plenary debate echoed those hopes and concerns, while outlining their particular national and regional challenges. China’s representative, on behalf of Brazil, the Russian Federation, India, China and South Africa (the “BRICS” Group), expressed concern that the global financial recovery suffered from a lack of dynamism, inadequate governance and stagnant investment. Pointing to a rise in “anti-globalization” thinking and declining political will, he urged States to resist protectionism and urged developed nations to bear the primary responsibility for financing sustainable development.
Similarly, Ecuador’s representative, on behalf of the “Group of 77” developing countries and China, said the 2030 Agenda required a revitalized global partnership which took into account differing national realities. Spotlighting the transfer of technology on preferential terms and the creation of a non-discriminatory global trading system as key elements, he voiced concern that least developed countries had been sidelined by global investment. Financing should address their special needs, including through blended or pooled financing, risk mitigation and infrastructure development, he said.
Also speaking during the panel discussion were Steve Waygood, Chief Responsible Investment Officer, AVIVA Investors; Elliot Harris, Assistant Secretary-General, United Nations Environment Programme (UNEP); and Giulia Porino, Finance Watch. The session was moderated by Rachel Kyte, Chief Executive Officer, Special Representative of the Secretary-General for Sustainable Energy for All (SEforALL).
Taking part in the plenary debate were representatives of Ethiopia, El Salvador (on behalf of the Community of Latin American and Caribbean States), European Union, Belize (on behalf of the Caribbean Community), Maldives (on behalf of the Alliance of Small Island Developing States), Bangladesh (on behalf of the Group of Least Developed Countries), Luxembourg, Cuba, Tajikistan, Venezuela, Panama, Sri Lanka, Honduras, Japan, Afghanistan, Colombia, Brazil, Republic of Korea, Kenya, Morocco, Qatar, Cabo Verde, Myanmar, Mexico, Indonesia, Malaysia, Nepal, Timor-Leste, Philippines, United Republic of Tanzania and Kazakhstan.
The Assembly will reconvene at a date and time to be announced.
PETER THOMSON (Fiji), President of the General Assembly, opening the session, said today’s meeting built on a series of events aimed at driving global action to implement the 2030 Agenda for Sustainable Development. Stressing that few issues could be more central to that goal than the mobilization of resources, he said financing the 17 Sustainable Development Goals (SDGs) would require an estimated annual $6 trillion investment, or $90 trillion over 15 years.
“While these sums may seem enormous, and the complexity of reforms needed to mobilize these funds may seem prohibitive, the fact is that the cost of our inaction will ultimately be far greater,” he said. Indeed, inaction could jeopardize the very future of humanity. Noting that the needed “exponential transformation” also offered opportunities for economic growth, social development, climate action and environmental protection, he emphasized the importance of bringing together all stakeholders, and aligning both financial markets and investment patterns with the 2030 Agenda.
He said a key feature of today’s “SDG Financing Lab” was the participation of private sector actors, which were the custodians of the largest pool of global resources and drivers of entrepreneurship and innovation. Drawing particular attention to the participation of Aviva, one of the largest insurers, he said the main challenge was in creating the right incentives and enabling environments to help the private sector orient its businesses and investments towards the world’s sustainable development needs.
Noting that efforts by Governments, central banks and financial regulators were already leading to positive developments in that respect, he underlined the need to reform policy and regulatory frameworks to leverage public and private financing for the Sustainable Development Goals. “We must also foster foreign investment and support banks to invest in higher-risk, longer-term projects,” many of which were in developing countries, he said, urging that investments also be made to tackle the drivers of conflict, displacement and humanitarian crises. “It is time to shape global economic and financial governance structures and trade rules to help create a level playing field,” he concluded.
AMINA J. MOHAMMED, Deputy Secretary-General of the United Nations, said it was in the interest of all countries, companies and people to tap the wealth of good that sustainable development would bring in environmental, economic and social terms. Significant resources were needed to realize the global vision to leave no one behind, as was a strategic approach that made the most of all investments. First, official development assistance (ODA) commitments must be met consistently and predictably, and then used in a catalytic way to help develop domestic resources and activate local investor bases. The United Nations could help countries shift from international to domestic sources for financing the Sustainable Development Goals.
Increasingly, she said, financial flows and investments were being aligned with the Goals, but mobilizing pension funds, the insurance sector and other large pools of capital could produce even greater wins. Sustainability should guide the creation of incentive structures, inform consumer preferences and shape the interests of shareholders. Collectively, such forces could generate unstoppable positive momentum. “The dividends will reverberate far and wide. Success on the Goals would trigger beneficial results that will feed project pipelines leading to progress on gender, economic growth and climate action,” she said, adding that “investing in a world of dignity and opportunity generates secure markets, thriving consumers and protected natural resources.”
A United Nations Foundation study showed that closing gender gaps in access to products and services could expand economic activity by $300 billion annually by 2025, she said, empowering millions of women to generate their own income, support their families and participate in markets. Where people had decent jobs, enough food and good opportunities for their children, there was greater social cohesion. Now was the moment to seize invaluable opportunities to leverage funding and innovation. Citing examples, she said the World Bank and BNP Paribas were cooperating around Sustainable Development Goal-linked bonds, showing the powerful role of capital markets in connecting savings with development priorities, while offering investors an attractive risk-reward profile. AVIVA Investors was promoting Sustainable Development Goal benchmarks, allowing individual investors to reward companies that performed well against sustainability goals, creating a clear commercial and reputational incentive for businesses to improve their sustainability credentials.
Stressing that youth were at the cutting edge of innovation, she said leaders could “provide oxygen” to that spark by securing rights and freedoms. In the developing world, such progress could be facilitated by supporting South-South cooperation and working to close the digital divide. “The more we can help countries of the South to learn from each other, the more we will engender self-reliance and the ability to mobilize domestic resources. And the more we can link energetic and creative young people to each other and society, the better our chances of success and peace,” she said.
The critical ingredient for success was leadership, she said, and the United Nations was doing its part to live up to the expectations. Noting that she was leading a comprehensive review of the United Nations development system, she said: “I am open to your ideas for how we can do more to support your efforts and optimize our common contributions to development”. The Organization was advocating a strong commitment to maintaining and increasing contributions to both ODA and South-South cooperation, and funding to the Green Climate Fund. It was also joining forces with Governments, philanthropists and private investors to stimulate sustainable investment at all levels. The agreements adopted in 2015 needed resources to become reality. “By scaling up all sources of financing — public and private — countries will earn respect, investments and results in the form of progress for their people and stability for our world,” she said. “I call on all of you here to give real meaning to this high-level meeting by acting on your responsibility as leaders in your different capacities to live up to your promises and do what is right. This is a call on behalf of the working mothers, the unemployed fathers, and young people who have an education but cannot find a job,” she said. “Let us realize this life of dignity for all.”
MAHMOUD MOHIELDIN, Senior Vice President for Partnerships, United Nations Relations and the 2030 Agenda of the World Bank Group, agreed that there had been much convergence on how to do business better. However, it was critical to scale up resources “from billions to trillions”, which would be needed to finance the 2030 Agenda’s implementation. Recalling that discussions on boosting development financing had begun in 2013 — leading to the Agenda’s 2015 adoption — he said expectations on that front were mixed. Stakeholders agreed that official development assistance (ODA), while critical for developing countries, would not be enough, and that more domestic resources mobilization was needed.
While positive developments had been seen in some countries, he said serious concerns remained not only around financing but about the “real world” challenges of climate change, pandemic threats, rising inequality, displacement and major demographic shifts. It was crucial to support the financial sector in becoming more inclusive and to put in place incentives, guarantees and de-risking structures. Pointing to a recent unprecedented $75 billion investment in the International Development Association — also known as the Bank’s “fund for the poorest” — he called on all stakeholders to take investment more seriously in such areas as human resource development, resilience-building, affordable housing, infrastructure improvement, food and agriculture, health and well-being.
He said the private sector was now going beyond philanthropy to understand the opportunities presented by the Sustainable Development Goals and described efforts to both steer and target development financing, notably by excluding companies involved in armaments, gambling, nuclear weaponry, tobacco and similar areas. The Bank was also working to ensure that risks and returns were properly managed through liquidity filtering and low-volatility filtering. “It’s not just about the transaction,” he stressed, but about standardizing sustainability on a larger scale. He pointed out that small island developing States and landlocked developing countries required special support, and outlined the Bank’s efforts to prevent and address such challenges as fragility, violence, armed conflict and forced displacement.
The panel discussion “What will it take to finance the Sustainable Development Goals? From ambition to reality” was moderated by Rachel Kyte, Chief Executive Officer, Special Representative of the Secretary-General for Sustainable Energy for All, and featured a keynote address by Sunil Bharti Mittal, Founder and Chairman, Bharti Enterprises, and Chairman, International Chamber of Commerce. Delivering presentations were Steve Waygood, Chief Responsible Investment Officer, AVIVA Investors; Elliot Harris, Assistant Secretary-General, United Nations Environment Programme (UNEP); Matt Arnold, Global Head of Sustainable Finance, JP Morgan Chase; and Giulia Porino, Finance Watch.
Ms. KYTE said that given the bounty of public and private sustainable finance experience, the focus should now be on speed and scale. “We need to be at 10 times the levels we are at the moment,” she said, asking how the financial system could be harnessed around sustainable development to make it move more aggressively and with more alacrity. The public sector would have to take greater risks and find new ways to induce the private sector to move faster. “Leaving no one behind” meant that risks in post-conflict countries were different than in other nations, she said, underlining that there was no one-size-fits-all approach.
Mr. BHARTI said financing the Sustainable Development Goals would become the most important global purpose in the coming years. Businesses could not move much further without being guided by the policies of various agencies and Governments worldwide. Nor could Governments advance without the contribution of businesses. The speed required to deliver the Sustainable Development Goals would be lost if the private sector was not involved. With 6 million members worldwide, the International Chamber of Commerce now had a seat at the United Nations table and intended to use its voice to attach itself to the Goals.
Trade liberalization, he said, had lifted at least 1 billion people out of poverty worldwide. Global trade allowed developing countries to grow economically and low- and middle-income countries had greatly benefitted from open trade. His country, India, was one of the most open countries in terms of global investment, and neighbouring Sri Lanka and Pakistan had opened their doors as well. Yet, the Chamber of Commerce was deeply concerned by protectionist voices emanating from some parts of the United States and Europe. The Chamber of Commerce focused on the Trade Facilitation Agreement and its effectiveness in creating access to global markets and examined how the Internet could connect markets, even in the tiniest places in Africa and Asia, to the developed world. Another area of focus was financing for small- and medium-sized enterprises.
The United Nations must use all its power to ensure that the developed world did not shut its doors on global trade, he said, stressing that more than $1 trillion in trade could be opened by the Sustainable Development Goals. “There is a good business case for the Goals,” he said. “Businesses would grow three times faster. That is the power of adopting the Sustainable Development Goals.” Highlighting the role of technology in accelerating the 2030 Agenda, he said Groupe Spécial Mobile Association, a trade body representing the interests of mobile operators worldwide, was the first body to adopt the Sustainable Development Goals in full scope. The Association had worked closely with various agencies on disaster response, mobile money and utilities. In the telecommunications world, the power big data was generating had been used to address epidemics and natural disasters. Worldwide, 4.8 billion people had mobile phones, nearly 3.6 billion of them in emerging markets, with radio signals found deep in forests and deserts. There was no substitute for a strong, viable telecommunications network that was technologically advanced and affordable for people to use. “Inclusive trade must be the central priority if we are to achieve the Sustainable Development Goals,” he concluded, emphasizing that the Chamber of Commerce was committed to working closely with United Nations to ensure that the Goals were achieved within the stated timeframe.
Mr. WAYGOOD said AVIVA Investors had half a trillion dollars in assets under management, with sustainable development embedded into investment decision-making. The global economy and markets’ current structures were unsustainable. “If the markets were structured properly, the Sustainable Development Goals simply would not exist,” he said. “It is palpable just how much more focus there is now on the role of finance in achieving the Goals. Noting the distinction between the different sectors and how to structure incentives and policy, he said market structure today was not well understood by citizens. Most citizens did not know where insurance companies invested money or how investors chose a fund manager and bought and sold on market exchanges. As a consequence, there was a lack of transparency and accountability in the financial system. In the investment world, three years, even three months, was a long-term period.
In examining how the international regulatory structure was working, he said the G-20, European Commission, United Nations and many Member States, for the first time, had started to envision in the last two years a road map for sustainable markets. At such a historic moment, he emphasized the significance of recognizing the knowledge that the Global Compact, the United Nations Conference on Trade and Development (UNCTAD) and the Climate Investment Forum had at its fingertips. That information was embedded in the Monterrey Consensus on Financing for Development, yet the “invitation had not been sent”, he said, calling on Member States to spread the message to his peers in the financial sector.
Mr. HARRIS, Assistant Secretary-General and Head of the United Nations Environment Programme (UNEP)’s New York Office, said the issue of profit was the very reason for the private sector’s existence. In that regard, the 2030 Agenda must be made consistent with the way profit was made, he stressed, adding: “It’s not just good business, it’s good for business.” Over the next 15 years, it would become increasingly clear that sustainable production and consumption and resource efficiency were good for a company’s bottom line, but to date, sustainability efforts had been hampered by inertia and a lack of information on potential returns. There was also a lack of methodology for assessing and managing those new risks, which turned many investors away from green projects, he said.
Noting that information could help businesses overcome those hurdles, he said the shift towards increased disclosure and forward thinking could help companies to be more sustainable, adding that they would need to address questions related to resource efficiency, climate change and the future desires of their clients. Developing countries in particular would face challenges related to the lack of a pipeline of bankable sustainable projects at scale, he said, noting that the due diligence required for piecemeal small-scale investments would prove too onerous going forward.
Mr. ARNOLD, Global Head of Sustainable Finance, JP Morgan Chase, cited a major “cultural gap” between the United Nations and what was happening in the corporate world. Indeed, a group of translators and anthropologists would be needed to help bridge the gap between the Sustainable Development Goals and the work of entities whose intrinsic function was to make a profit, with today’s dialogue serving as a critical platform for such efforts. Noting that JP Morgan Chase was both a bank and an asset management firm, he said the challenge to using the company’s capital for sustainable development was risk. Banks did not own the funds they lent, and depositors expected to get their money back. Similarly, asset managers had a fiduciary responsibility to their clients to generate the highest return possible.
Against that backdrop, he said JP Morgan had recently begun to map the Sustainable Development Goals into three “buckets” for potential action: environmental; inclusive growth; and partnership and innovations. “We have wrapped our heads around ‘green’”, he said of the former, noting that the industry was becoming more comfortable working on the environmental goals. Inclusive economic growth, on the other hand, was much more difficult to measure. “We have an awful lot to learn,” he concluded, stressing that banks could be an important force for good but “we need to be educated.”
Ms. PORINO, Membership, Outreach and Expertise Coordinator of Finance Watch, said her organization had been created in the aftermath of the global financial crisis with the mission of “counterbalancing” the financial sector. “What we need […] are two simple words: political will,” she stressed, noting that there had never been more global capital concentrated into fewer hands. Today’s event helped frame a discussion about finance as a system that included both public and private investments, and a number of tools, such as tax policies and regulatory frameworks. Calling for a consensus on a new economic model, she said bold and ambitious action was needed on the part of Governments and that a broader coalition of stakeholders should be created to oversee the process.
Emphasizing that a large-scale shift towards a sustainable financial system required a “cold and hard look” at the current model — which was simply incompatible with sustainable development — she described a number of ways in which Governments could take the lead. Subsidies for fossil fuels could be removed, for example, while taxes could be shifted from labour to carbon and the debt of developing countries could be forgiven. Private financial flows should be directed in such a way as to bring a social purpose back to the heart of the financial system, she said, noting that the UNEP Inquiry into the Design of a Sustainable Financial System had already helped to identify and document best practices in that regard.
MR. WAYGOOD said the key to transparency of global development was in the Sustainable Development Goals. UNEP Inquiry — a sustainable stock exchange initiative set up in 2008 — had 62 exchanges, however not many of them were doing much that was very effective. They were paying some heed to the lack of transparency, but their global conversations had not taken up the issue manifold. There was a major conversation over whether transparency was mandatory and dozens of exchanges had come up with their own guidance. The International Organization of Securities Commissions, the global standard setter for global securities market regulation, must create a road map and ensure companies exposed climate risk, he said, noting that voluntarism only worked up to a point and that it was time to look at creating a policy environment to address the problem properly.
Mr. ARNOLD said JP Morgan’s task force on climate-related financial disclosure was doing financial stress-testing of portfolios, getting to know so-called “idiosyncratic risk” and “stress testing risk”. Mandatory disclosure would enforce far more action. The finance sector had to lead, he stressed, noting that too few asset managers, banks and insurers were doing voluntary disclosure. Greater transparency, however, would not solve the Sustainable Development Goals’ problem; it would be a long time before there was disclosure comparability, as the financial disclosures of each company varied in terms of project risk, property rights and judicial review transparency. Since the Sustainable Development Goals were a new idea for many financiers, they perceived risk to be greater than it actually was. Transparency would indeed help, but there must be a conversation about de-risking investments so they could “crowd in” greater private capital. At present, that amount was not big enough.
MR. HARRIS said transparency among financial companies was limited. One way to increase it was to give different market participants different roles in the equation. Risk assessment must be at the retail level, on the ground, but that was not happening. A set of stakeholders must be set up in a way that was acceptable to large-scale finance. “We will have arrived when ratings agencies take the SMEs [small- and medium-sized enterprises] into account,” he said, noting that while some were now being taking on board, progress was still in the early stages and nowhere near the level of standardization.
He said the Tropical Landscape Finance Facility between UNEP and Indonesia was a way to encourage large-scale global finance to bring money into small-scale investment in a developing country in areas such as renewable energy and tropical landscape management. The Facility allowed large companies to finance the gap that small-scale companies could not provide and had pooled small projects together to provide individual project assessments. Opening the door for big private finance to flow into small local investment on a global scale was a way to reach the Sustainable Development Goals.
Ms. PORINO said that while organizations were working to establish transparency, when it came to setting standards, it was important to acknowledge the resistance of the financial sector in changing the status quo. Europe had shown the political will to create clarity on that issue. Despite a few steps in the right direction, Europe was far off from doing so in a way that could restore public trust in the financial sector and its service to society.
Mr. WAYGOOD said that private companies had access to league tables that benchmarked corporate performance and looked at portfolio via apps. If public tables were built, the results would be huge. “It would effectively be democratizing corporate data,” he said, calling on the United Nations to “build those benchmarks, we can help you”.
Mr. BHARTI said transparency was achievable. The question was whether it should come from the heart or be mandatory. The Government of India had created a name-and-shame index whereby companies must state in their annual report if they had spent 2 per cent of profits on corporate social responsibility projects. “Can we mandate this system in a global corporate order so that companies start getting ranked? In my opinion this is a must,” he said. Transparency should be made a priority for lending and companies should be given marks or points for financing the Sustainable Development Goals. “It is always hard to get to transparency, but to get it to a global order, you have to mandate it,” he said.
Ms. KYTE, summing up the discussion, said it was a responsibility to regulate, but also to mobilize domestic resources in a way that they could be catalytic. Money was not the problem; it was a question of pipelines of projects. Money flowed in certain directions, but not others, and such disconnects must be resolved. Transparency was as powerful galvanizer in electricity, water and other powerful sectors. If the global community was serious about reaching the 2030 Agenda and the goal of de-carbonization by mid-century, a shift was needed as was a different dialogue between the public and financial sector.
BERHANE GEBRE-CHRISTOS, Special Envoy of the Prime Minister of Ethiopia, said the Sustainable Development Goals were being implemented through their implementation with the country’s national development plan. Ethiopia had mobilized multiple types of financial resources, aligned with its national development priorities. Through the introduction of comprehensive tax reform, the mobilization of domestic resources had been increasing. Public financing, including grants and loans, had been used to build productive capacity, while official development assistance and foreign direct investment also played an important role. Other financial instruments, including remittances, bonds and commercial lending for long-term programs had also been harnessed. More than 60 per cent of Ethiopia’s national budget went to pro-poor development programmes, with special attention given to job creation and youth employment initiatives.
MARIO A. ZAMBRANO ORTIZ (Ecuador), speaking on behalf of the “Group of 77” developing countries and China, said the 2030 Agenda’s implementation required a revitalized global partnership which took into account differing national realities. Spotlighting the transfer of technology on preferential terms, as well as the creation of a non-discriminatory global trading system, he said private sector investment and innovation were major drivers of productivity and job creation. He called on businesses to use those forces creatively to solve development challenges. Noting with concern that many least developed countries — as well as those affected by conflict or living under colonial occupation — had been sidelined by global investment, he called for efforts to channel financing to address their special needs, including through blended or pooled financing, risk mitigation and infrastructure development.
LIU JIEYI (China), speaking on behalf of Brazil, the Russian Federation, India, China and South Africa (the “BRICS” Group), said the global economic recovery was fragile and suffered from a lack of dynamism, inadequate governance and stagnant investments. Pointing to a rise in “anti-globalization” thinking around the world as well as declining political will, dwindling resources and fragmented efforts, he expressed hope that today’s meeting would foster consensus among stakeholders and build political will in support of common development goals. He underscored the need to respect the principle of common but differentiated responsibility, stressing that developed nations should bear the primary responsibility for sustainable development, forgive debts and respond to the special needs of developing countries. Calling for an equitable and open global investment environment, he urged States to resist protectionism and expedite reform of the global financial system.
RUBEN ZAMORA (El Salvador), speaking on behalf of the Community of Latin American and Caribbean States (CELAC), underscored the importance of mobilizing new concessional and non-concessional financing. Sharing knowledge and lessons learned through South-South and triangular cooperation was also vital, he added, emphasizing the need for continued transfer of clean technologies to developing countries. Reaffirming the Group’s commitment to sustainable development, he said that despite progress made, ODA remained critical to reducing inequality and structural gaps. Calling on developed countries to fulfil their commitment to allocate 0.7 per cent of their gross national income to ODA, he called on the United Nations development system and international financial institutions to address the specific needs and challenges of countries in the region. He also called for greater resources and improvement of loan conditions.
JO ADAMSON, European Union, said the move from billions to trillions would require full participation, stressing that the bloc was committed to the 2030 Agenda and the Addis Ababa Action Agenda. Preliminary data by the Organization for Economic Cooperation and Development (OECD) showed that ODA in Europe had increased by 11 per cent in 2016 to €75.5 billion, or 0.51 per cent of gross national income (GNI), up from 0.47 in 2015. Only 25 per cent of that growth was due to in-country support for refugees. ODA was vital to help least developed countries close financing gaps in health and education, and to catalyse other sources of finance. Noting that more than one fifth of efforts went to least developed countries, he said the European Union was the world’s leading provider of ODA. Noting that climate finance accelerated sustainable development, he called the first report of the Interagency Task Force on Financing for Development encouraging, as it struck a balanced tone, was factual and well-evidenced, and it drew on several examples. The report should be a solid basis for discussing progress and gaps in issues covered in the Addis Ababa Action Agenda and the Economic and Social Council’s Forum on Financing for Development later in the month.
LOIS MICHELE YOUNG (Belize), speaking on behalf of the Caribbean Community (CARICOM), noted that some large international banks had been terminating or limiting their correspondent banking relationships with smaller Caribbean banks, with negative implications for the region. Such “derisking” cut Caribbean businesses off from international trade and financing, prevented families from receiving remittances from relatives abroad and discouraged foreign investment, she said. Through the Caribbean Development Bank, CARICOM was working to strengthen financial transparency and attempting to prevent the loss of correspondent banking relationships. However, she said, those efforts would only bear fruit if banking partners collaborated in safeguarding such relationships.
Ms. ZAHIR (Maldives), speaking on behalf of the Alliance of Small Island Developing States and associating himself with the Group of 77 and China, said small island States required capacity-building and the transfer of environmentally-sound technology in order to realize the Sustainable Development Goals. They faced specific challenges when accessing concessional finance from international financial institutions, she said, stressing that their structural vulnerabilities were often ignored as a result of discrepancies in their categorization within both the United Nations system and international financial institutions. Urging those institutions to reconsider concessional financing for small island developing States – notwithstanding their income status — she noted with concern the declining trend in ODA for those countries, emphasizing that international public finance commitments must be met.
MASUD BIN MOMEN (Bangladesh), speaking on behalf of the Group of Least Developed Countries and associating himself with the Group of 77 and China, warned that least developed countries would not be able to achieve the Sustainable Development Goals if today’s global growth trajectory continued. States must urgently implement the Addis Ababa Action Agenda on Financing for Development and scale up both public and private sector investment. Noting that blended finance instruments could prove helpful in that respect, he said efforts must be made to improve financial inclusion and protect developing countries in global markets. “We must make serious efforts to resist inward-looking and protectionism measures,” he stressed, calling on the United Nations to address the obstacles to development financing.
MARC BICHLER (Luxembourg) said ODA represented more than 1 per cent of the country’s GNI. While affirming the importance of ODA, he said new alliances must be created with private sector actors to provide the financial means to achieve development ambitions. Financing was needed to combat poverty and climate, and only a multi-disciplinary coalition would advance efficiency in that regard. All societal actors must be involved, whether in creating policies for Governments, missions for non-governmental organizations or business plans for the private sector. It was essential to understand and explain to private sector partners that sustainable development provided economic opportunities with quantifiable social and environmental impacts. Strategies for financing the Goals must align subsidies, ODA, philanthropic donations and long-term loans. Luxembourg had formed partnerships to launch the first fully financed green stock market and put in place a certification system for preventing “greenwashing” of private climate investments.
ANA SILVIA RODRÍGUEZ ABASCAL (Cuba), associating herself with the Group of 77 and China, CELAC, and the Group of Small Island Developing States, called for firm commitments and greater political resolve, noting that technology transfer and capacity-building were essential to achieve sustainable development and that public international flows remained inadequate. Many donors had not met their ODA commitments. While commending gains made in several sectors, she said more must be done to effectively utilize funding.
MAHMADAMIN MAHMADAMINOV (Tajikistan), associating himself with the Group of 77 and China, said declining capital, volatile economies and climate change were obstacles to development and that mobilizing public and private resources was crucial. Tajikistan’s social and economic reforms continued to strengthen its export potential and promote human development, he said, stressing the need for enhanced partnerships. Meeting aid commitments was especially important to help countries in special situations use domestic resources, strengthen taxation capacities and catalyse public investment.
RAFAEL DARÍO RAMÍREZ CARREÑO (Venezuela), associating himself with the Group of 77 and China and CELAC, said resources from the developing world were being drained for the benefit of developed countries. Developed countries had a responsibility to open their markets to the commodities of developing nations, he said, also calling for increased ODA. Stressing that the sovereign management of domestic resources was vital for meeting education and health-care targets, he said Venezuela was ready to share its experience in that regard, as international financial institutions had only worsened the situation in developing countries, and people should have the right to decide their political, economic and social future.
ISBETH LISBETH QUIEL MURCIA (Panama), associating herself with the Group of 77 and CELAC, stressed the need for mechanisms to mobilize funding for sustainable development. For middle-income countries, it was important to ensure a balance between international expectations and the challenges faced on the ground. Countries could not turn a blind eye to corruption, tax evasion and the illegal movement of money, which were part of a greater global problem. Panama had recommitted to comply with the highest standards for international transparency, including on tax evasion.
AMRITH ROHAN PERERA (Sri Lanka) said financing for development was a major problem for countries, including his own. In Sri Lanka, public, private and innovative financing options were being mobilized to achieve development objectives. The country had taken a holistic approach that took into account the environment, technology and innovation, entrepreneurship and access to financing, as well as other areas. The creation of a carbon fund had allowed companies to achieve carbon neutrality.
FADUA ORTEZ (Honduras), associating herself with the Group of 77 and China and CELAC, said the 2030 Agenda would require a massive mobilization of funding, although it was important to remember that the goals and objectives of that Agenda were not separate from national efforts. Innovative funding must be significantly increased, but it must not replace ODA or traditional financing mechanisms, she said, also advocating recognition of the diversity and unique development challenges of middle-income countries.
YASUHISA KAWAMURA (Japan) said nearly two years after the adoption of the 2030 Agenda questions persisted on how to tap the vast private sector resources. That sector was eager to invest in mutually beneficial arrangements. He urged Member States to consider how they could foster the creation of structures and models that generated profit, attracted investment and helped achieve the Goals. While it was a rather “unorthodox perspective”, the creation of sustainable business models alongside both traditional and innovative means of financing would help countries meet the Goals.
MAHMOUD SAIKAL (Afghanistan), associating himself with the Group of 77 and China, and the Least Developed Countries Group, said domestic resource mobilization was vital to national development. As part of its fiscal strategy, the Government was committed to collecting enough revenue to meet its needs, and over time, gradually reducing its dependence on assistance. To that end, it was planning to increase its development budget spending by 10 to 15 per cent each year as it expanded service delivery. However, Afghanistan faced major challenges due to 30 years of conflict and its landlocked status, and he underscored the need for large investments in human capital and technology transfer.
JAIME ANDRÉS GNECCO DAZA (Colombia), associating himself with the Group of 77 and China and CELAC, said Governments must prioritize partnerships to realize the 2030 Agenda. Resources beyond traditional financing were needed. It was important for middle-income countries to address their particular challenges, and as such, more coordination was needed to ensure that that class of countries did not “fall back”. There was a need to transfer technology and “marry the gap” between the developed and developing countries, he said, also pressing international financial institutions to consider the unique challenges faced by middle-income countries.
PHILIP FOX-DRUMMOND GOUGH (Brazil) associating himself with the Group of 77, CELAC and “BRICS”, said his country was moving forward with comprehensive internal reforms aimed at restructuring the fiscal sector and setting the enabling environment for public and private investments. Those reforms would build the stability and predictability needed for long-term decisions and commitments from all investors. They would also ensure that the necessary means were available to finance social needs and foster inclusive development. Brazil was committed to pursuing its South-South cooperation policies, including by providing experience and support to the peoples of the global South.
CHO YEONGMOO (Republic of Korea) noted that his country assisted developing countries in modernizing their tax administration systems and building capacity. A significant contributor of ODA, the Republic of Korea was steadily increasing its support for fragile and conflict-affected States. It attached great importance to transparent sustainable development budgeting and had established innovative mechanisms for public engagement on wasteful spending and budget misappropriations. As the host country of the Green Climate Fund Secretariat and the Global Green Growth Institute, the Republic of Korea would develop and share business models for new energy industries with developing countries, he said.
KOKI MULI GRIGNON (Kenya) associating herself with the Group of 77 and China, said her country had put in place various tax reforms, including a tax modernization programme, which had resulted in an increased tax base. The tax administration was highly efficient and run at below its targeted cost. Noting that a strong revenue base would require investment, particularly from the private sector, she recalled that in 2016, Kenya had been ranked third of the world’s top ten reformers, and in an effort to promote faster business growth, had established a one-stop centre for investors. An asset-recovery unit also had been set up within the national treasury, with the monies recovered having been directed towards health, clean energy and environmental projects.
OMAR HILALE (Morocco), noting that priority projects and financing at the national level would have the greatest impact on sustainable development, underscored the importance of assisting developing countries to ensure they had the resources to reach their development goals. Education was full of opportunities that should be exploited as they ensured training for young people and promoted their entrepreneurial spirit. It was essential to mobilize more financial resources to combat climate change, aimed specifically at reducing greenhouse gases. ODA must be improved and donor pledges honoured, he said, underscoring Morocco’s was committed to South-South Cooperation.
GHANIM AL-HUDAIFI AL-KUWARI (Qatar), associating himself with the Group of 77 and China, said “it goes without saying” that achieving the Sustainable Development Goals required significant financial mobilization, while implementation of the 2030 Agenda required the concerted management of funds and respect for national priorities. International cooperation was vital, he said, adding that sustainable development was a common responsibility. “We must all work together,” he continued, while pledging his country’s assistance in development projects.
JOSÉ LUIS FIALHO ROCHA (Cabo Verde) called for the integration of all development agendas, namely those on climate change, disaster risk reduction and urban development. Sustainable development plans must consider the needs of small island developing States by meeting their specificities and increasing spending, which had recently declined. “Moving from words to action requires that we focus,” he stressed, calling for national development strategies that prioritized goals and an international financial assessment mechanism that could support coordination. Indeed, economic growth must be complemented by a social compact.
AYE MYA MYA KHAING (Myanmar), associating herself with the Group of 77 and China, and the least developed countries, urged significant cooperation at the local, regional, and international levels. Myanmar’s projects were based on the Goals and focused on close work with United Nations agencies. Echoing concerns over the growing imbalance between core and non-core resources, and declining foreign direct investment, she drew attention to the need for technology transfer and private sector participation. While underscoring the role of international development aid, she said national ownership was critical in order to advance development.
SYLVIA PAOLA MENDOZA ELGUEA (Mexico), associating herself with CELAC, recognized the importance of the private sector in creating innovative and inclusive models. In Mexico, the private sector was encouraged to provide employment to women and young people. Indeed, there could be no peace without development, and no development without peace, and she called on the global community to come together to mobilize resources.
Ms. NURAN (Indonesia) stressed that national circumstances differed, even if countries faced the same basic challenges. The financing available would not have much value if different national realities, capacities and development levels were not considered. The sharing of experiences and information could help identify strategies best-suited to specific country contexts. She urged that more studies be conducted to understand how markets in least developed countries could better attract foreign investors, stressing that the funding gap could only be met by significantly increasing private sector participation. The mobilization of domestic public resources was also critical to achieving sustainable development.
Mr. SHAHABUDIN (Malaysia) said that as his country moved towards a high-value, knowledge-based economy with a strong focus on services and manufacturing, innovation would be crucial for raising the efficiency, and thus, productivity. Malaysia was working to balance a growing population and demand, with the imperative need for green growth strategies, given the increasing intensity and frequency of extreme weather events. Middle-income countries still faced significant challenges to achieving sustainable development, he stressed.
LOK BAHADUR POUDEL CHHETRI (Nepal) associating himself with the Group of 77 and the least developed countries, expressed concern over the slow identification of what worked at the global, national and local levels in terms of leveraging resources. There was an urgent need to use available tools, he said, stressing that partnerships and technology transfer, in addition to traditional financing mechanisms, must be used to support implementation of the 2030 Agenda. Resource gaps were even greater for countries in special situations, including Nepal.
Mr. TILMAN (Timor-Leste), associating himself with the Group of 77, the Alliance of Small Island States and the least developed countries, said funding from all sources must be maximized in order to achieve the Sustainable Development Goals. Timor-Leste was honoured to be part of a new type of cooperation called “fragile-to-fragile cooperation”, which allowed countries to share ideas and solutions aimed at addressing the unique needs of countries in fragile situations.
MARIA ANGELA PONCE (Philippines), associating herself with the Group of 77 and China, said South-South cooperation was critical to mobilize resources for the sustainable development of developing countries. Underscoring the need for accountability and transparency, she said ODA to her country had been on the decline since 2001, a trend in countries approaching or having approached middle-income status. The Government, therefore, was working to maximize tax revenue while encouraging private sector investment in projects to bridge funding gaps.
SONGELAEL W. SHILLA (United Republic of Tanzania), associating himself with the Group of 77 and China, said his country was creating a favourable investment climate to attract more business to the extractive, agriculture and telecommunications industries, which were key drivers of development. While underscoring the importance of domestic resource mobilization, national ownership and good governance, he said domestic resources alone were insufficient for achieving the 2030 Agenda and he emphasized the critical role of international funds in that regard. International trade, debt and other systemic issues also required international and “undivided attention”.
RUSLAN BULTRIKOV (Kazakhstan) said his country’s commitment to sustainable development was evident in its national agendas and plans. The Government had introduced a plan to reduce carbon emissions and was working to implement a trade-related project to reduce greenhouse gasses. Such initiatives were in line with the Paris Agreement on Climate Change. Kazakhstan had also allocated one per cent of its defence spending to finance development goals, in hopes that such a “complementary channel of financing” would help meet targets.
Taking the floor a second time, the representative of Venezuela said he rejected the lies and manipulations directed toward his country by his counterpart from Morocco, stressing that the meeting had been used to air issues that were not on the agenda.
Also taking the floor a second time, the representative of Morocco responded that while Venezuela was quite rich, the regime there had chosen not to use national resources appropriately to benefit the people.
Ms. KYTE, in closing remarks, said that what had become clear during today’s event was that the speed and scale of financing required for the 2030 Agenda was of critical importance.
The moderators of afternoon workshops then took the floor to describe the outcomes of their respective discussions. John McArthur, Senior Fellow at the Brookings Institution, noted that participants in a workshop on “Building an inclusive and peaceful future where no one is left behind” had stressed the need for the United Nations to bring the most relevant stakeholders together to solve the financing for development challenge. Others had urged the United Nations to more explicitly encourage each country’s national coordinating body to take a more active role.
Irving Mintzer, Visiting Research Scholar at the School of Advanced International Studies, Johns Hopkins University, said participants in a workshop titled “Fostering economic growth and development, and tackling inequality” had questioned what the United Nations could do to more efficiently galvanize financing for development. The world must shift from an incremental mode to a transformation approach to achieve the Sustainable Development Goals.
Simon Zadek, co-Director, United Nations Environment Inquiry, who moderated a workshop on “Protecting our world in the present and the future”, said that while there had been an emphasis on the risk and de-risking of investments, many participants had also highlighted the need for policy-influenced investment vehicles.
Mr. THOMSON, in closing remarks, said he had been encouraged by the frank and practical nature of today’s dialogue. Discussions had emphasized the need to increase the speed and scale of action, with speakers recognizing the magnitude of challenges ahead, the volume of resources needed and the importance of partnerships. Many had reaffirmed the need for predictable ODA to catalyse change, including domestic resource mobilization.
Further, he said, the discussions had encouraged the World Bank and other multilateral development banks to leverage investments to develop financial systems. Business leaders had confirmed that — with the right policy mix — asset holders could be incentivized to divest from underperforming investments and instead direct funds towards sustainable projects. The role of the United Nations in fostering dialogue between the public and private sectors had received wide support, as had further exploration of the potential “sweet spot” the Organization could occupy between Member States and global financial institutions. He pledged to convey those messages to finance ministers gathering at the World Bank Spring meetings in Washington, D.C., later this week.