Securing financing for sustainable development

New and innovative sources of financing are needed to supplement decreasing Official Development Assistance, but these should be additional to traditional assistance and not a substitute for it: this is one of the conclusions of the 6th High-level Dialogue on Financing for Development. In this video interview, Shari Spiegel, from UN DESA’s Financing for Development Office, explains why development assistance should remain a priority, regardless of the financial crisis.

The biennial High-level Dialogue, which took place this year on 7-8 October in New York, is the major intergovernmental focal point for the follow-up to the 2002 Monterrey Conference on Financing for Development and the 2008 Doha Review Conference. The Monterrey Conference brought together all major stakeholders for the first time to discuss issues relevant to financing for development, given the pressing need to raise additional resources. In this spirit, the recent High-level Dialogue brought together Member States and representatives from major stakeholders, including the IMF, World Bank, UNCTAD, UNDP, the Financial Stability Board, and representatives from the private sector, academics and civil society from around the world. They discussed how to incentivize the global financial system to work for the benefits of equitable sustainable development for all. During this meeting, Member States and UN officials called for maintaining international commitments, as well as for increasing domestic resource mobilization, engaging the private sector, and fostering international trade to sustain economic growth and fuel sustainable development.

Improve access to credit

“We have to create an inclusive financing system that would work for everybody around the globe.”

Shari Spiegel

A range of issues were discussed from the role of private sector financing to Official Development Assistance (ODA), and the impact of the 2007-2008 financial crisis on financing for development. The participants explored the possible responses to this crisis and solutions to increase the stability of the financial system while ensuring that the financial system fulfils its role of intermediating credit. “At the UN we emphasize that ensuring the stability of the financial system is incredibly important, but it has to go hand in hand with access to credit. We need to focus on financing for small and medium-size enterprises, for small entities, and to create an inclusive financing system that would work for everybody around the globe”, explains Shari Spiegel, Chief, Policy Analysis & Development Branch, at UN DESA’s Financing for Development Office.

Building on the Monterrey Consensus

The overall theme of this, the sixth high-level dialogue on the issue, was “The Monterrey Consensus, Doha Declaration on Financing for Development and related outcomes of major UN conferences and summits: status of implementation and tasks ahead.”

The Monterrey Consensus, adopted at the International Conference on Financing for Development in 2002, is a landmark partnership agreement for global development. It covered a number of topics, including domestic resource mobilization, foreign direct investment (FDI) and other foreign flows, trade, official development assistance (ODA), debt relief and systemic issues.

It was followed in 2008 by the Doha Declaration, adopted at the Follow-up International Conference on Financing for Development, which emphasized, among other things, the need to urgently meet the agreed ODA target of 0.7 per cent of donor countries’ gross national income (GNI), and underscored the importance of strengthening the World Trade Organization (WTO) with special and differential treatment for developing countries. Today, however, ODA is around 0.31 per cent of national income of developed countries, having fallen 6 per cent in real terms over the past two years.

Need of a follow-up to Monterrey

“Among the outcomes of this discussion, we could see the beginning of an agreement on the need to have a follow-up conference to Monterrey. It would look into how the Monterrey Consensus can be used today to address new global challenges, and how we should build on this consensus to address global challenges”, mentioned Shari Spiegel. “The second thing that came out of the meeting was that there was a real excitement amongst civil society and other participants about the new opportunity the post-2015 development agenda gives us to rethink how we can work together to make the financial system work in the interest of all human beings and help create a better globe for all of us.”

Difficulties to fulfil pledges

“A strong financial commitment to human solidarity today will improve prosperity and security tomorrow.”

Ban Ki-moon

Addressing participants, Secretary-General Ban Ki-moon encouraged all countries to fulfil their pledges and meet their development assistance targets. “For many developing countries, and in particular the most vulnerable, predictable levels of ODA remain critical,” Mr. Ban said, adding that he was “deeply concerned” about the recent decline in ODA.

Mr. Ban also emphasized the private sector’s vital role in financing and investing for a more sustainable and prosperous world. “A strong financial commitment to human solidarity today will improve prosperity and security tomorrow,” he noted.

Financing sustainable development and post-2015 agenda

Participants were also part of roundtables and an informal interactive dialogue on the impact of the crisis on the reform of monetary and financial systems and implications for development; mobilization of public and private financing; and the role of financial and technical development cooperation, including new and innovative mechanisms, in leveraging resources for sustainable development.

In a report produced by the UN Department of Economic and Social Affairs (DESA) and released in July 2012, the UN proposed a series of financial mechanisms to raise $400 billion annually for development needs, which would be additional to traditional ODA.

The informal dialogue was focusing on the link between financing for development and achieving the eight MDGs and advancing the post-2015 agenda.


More about the Sixth High-level Dialogue on Financing for Development: