High-Level Dialogue on Financing for Development - Part 2

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26-Sep-2019 03:19:38
Declining aid, rising debt thwarting world’s ability to fund sustainable development, speakers warn at General Assembly High-Level Dialogue on Financing for Development.

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Financing is ‘the test of our seriousness’ Secretary-General says, stressing world falling behind on pledges to deliver prosperity for people, protect planet.

Declining levels of official development assistance (ODA) and rising levels of debt are impeding the world’s ability to pay for the Sustainable Development Goals and address the negative impacts of climate change, particularly in Africa and among small island developing States, speakers warned today as the General Assembly hosted a high-level dialogue on financing for development.

Participants, including Heads of State and Government, Ministers, senior officials and representatives of stakeholder groups, debated the pros and cons of innovative financing mechanisms, the role the private sector can play, and the challenges faced by developing States which, solely on the basis of their gross domestic product (GDP), find themselves thrust in the ranks of middle-income countries and no longer eligible for sorely needed aid on favourable terms.

“Financing is the test of our seriousness,” said António Guterres, Secretary-General of the United Nations, who stressed that “without resources, we simply will not deliver for people or planet.” Underscoring the need for adequate, predictable and sustainable funding, he warned that the world is “not on track to achieve the Goals” and is falling short of the required funding from both public and private sources.

Declining ODA levels and rising levels of debt are limiting spending on the Goals, he said, adding that almost one third of the world’s least developed countries now find themselves in, or in high risk of, debt distress. Of special concern are heavily-indebted small island developing States that are wrestling with the high costs of climate change.

“We need to find ways for big money to flow to small projects,” he said, drawing attention to the October launch of the Global Investors for Sustainable Development Alliance that will bring together 30 Chief Executive Officers from every region, which collectively manage nearly $16 trillion.

President Nana Akufo-Addo of Ghana said that since he assumed office, his goal has been to help build a country that rejects a mindset of dependency, charity and handouts, charting instead a path of self-reliance. However, even with the best will in the world, and with the most charitable donor countries in place, “there will never be enough aid to develop Ghana, let alone Africa, to the level we want”. While increasing domestic revenue mobilization and leveraging technology to strengthen the performance of revenue institutions, it is necessary to pay attention to how revenue is spent and accounted for, he said, stressing the need for transparent budget and expenditure management systems that allocate resources wisely to agreed national priorities.

Bill Gates, Co-Chair of the Bill and Melinda Gates Foundation, said the world is far from fulfilling the promise of the Goals, and headwinds — such as climate change, rising debt levels and a softening outlook for global economic growth — are putting progress at risk. There is no single solution for getting back on track, but some things can make a significant impact, he said, emphasizing that different challenges call for different types of financing. “We must be realistic about gaps that the private sector can and cannot fill,” he added. The past two decades have seen amazing progress in improving the lives of billions, with significant strides in reducing poverty, but such progress has been uneven and there is still a far way to go towards fulfilling the promise of the Goals.

Sola David-Borha, Chief Executive Officer of Africa Regions of the Standard Bank Group, said achieving the Goals requires $2.5 trillion annually, yet financing available to Africa is “a drop in the ocean”. Africa needs “long-term patient capital”, she said, noting that the continent has only been successful in attractive money for large‑scale projects. She went on to describe how Africa is shifting to affordable clean energy, stress the importance of increasing intercontinental trade and emphasize that gender equality is a business imperative.

With $2.5 trillion a year needed to close the development financing gap, “much more must be done,” added Tijjani Muhammad-Bande (Nigeria), President of the General Assembly. He called for ODA commitments to be honoured alongside greater public and private investment to create more growth and jobs. Domestic resources must also be further mobilized, he said, adding that that the trillions of dollars lost every year due to illegal financial flows in developing countries far exceeds the volume of development aid.

Once again, alarming signs of debt accumulation and distress are being seen, disproportionately affecting least developed countries, small-island developing States and landlocked developing States, he said. “Debt sustainability must be addressed so that recent history does not repeat itself,” he said, adding that investment in clean and accessible energy can generate revenues.

Speaking in a video presentation, Prince Charles of Wales, United Kingdom, said the current market economy system “is no longer fit for purpose”. He called for a global shift in mindset which recognizes that what is good for people and planet is also good for business and Government. The world needs to think differently about capital — not only financial capital, but also human, community and natural capital. How capital pools are managed will be key, he said, adding that young people are “fed up” with inaction in the face of a global climate emergency.

Over the course of the day, delegates pitched ideas and exchanged views during thematic interactive dialogues that focused on ways to put public resources to work for more equal sustainable societies, including by combating illicit financial flows; financing the Goals and climate action at a time of rising debt burdens; and shifting the money needed to fill development financing gaps.

At the end of the day, several Member States and stakeholder groups also presented new announcements, commitments and initiatives to support implementation of climate action and the Goals.

Marc-André Blanchard (Canada), Co-Chair of the Group of Friends of Financing for Development; Amina J. Mohamed, Deputy Secretary-General of the United Nations; and Mona Juul (Norway), President of the Economic and Social Council; and the President of the General Assembly made closing remarks.

At the start of the meeting, the Secretary-General expressed condolences upon the death of Jacques Chirac, former President of France.

For further details please see:
MEETINGS COVERAGE AND PRESS RELEASES

Interactive Dialogue 3 – Moving the money to fill the climate action and SDGs financing gap
Interactive Dialogue 4 – Announcements and new initiatives
Closing Session

For further details please see:
HIGH-LEVEL DIALOGUE ON FfD
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