Money for a better future: 5 things to know about the Financing for Development Forum

As the global economy continues to be battered by a series of crises, senior UN officials and government representatives gather at the United Nations headquarters in New York in an attempt to transform the global economy and get it back on track. the 2030 Agenda for Sustainable Development internationally agreed.

There are so many conflicts, humanitarian catastrophes, extreme weather events and economic upheavals taking place around the world that a new word is being used to describe the current situation: the polycrisis.

The word appeared in 2022, a year that began with dim hopes that the global economy would start to recover from the massive disruption caused by the COVID-19 pandemic, but was soon overtaken by Russia’s invasion of Ukraine.

In the midst of all these competing crises, many countries simply do not have the resources to invest in recovery, climate action and sustainable development.

This is the difficult environment in which the 2023 Forum on Financing for Development at UN headquarters, April 17-20, with the aim of advancing policies that address global development issues, from crippling debt to underdevelopment and food insecurity.

Here are five things to know about the meeting.

1) Why is this year’s Forum important?

2023 is shaping up to be a crucial year for sustainable development. This year marks the equator between 2015, the year it was launched the Agenda for Sustainable Developmentand 2030, the deadline for the achievement of its 17 Goals, among which are the eradication of poverty and hunger, access to universal education and the elimination of gender inequality.

The UN plans to give new impetus to achieving the Goals at a major Summit on the Sustainable Development Goals to be held in September. Howeverno progress will be made without significant funding.

In February, the General secretary of the UN, António Guterres, recognized that the Goals are far from being met, and launched a stimulus plan, which urges the richest countries to allocate an additional 500,000 million dollars each year to its financing. “Investing in the Goals is sensible and doable,” he said. “The world wins, as the social and economic rates of return to sustainable development in developing countries are very high.”

The stimulus plan also calls for the international financial system to be transformed, so as to reduce the crippling debt burden of developing countries and facilitate access to finance. Bringing this transformation to life will be on the agenda of this year’s Forum.

2) What are the main themes?

According to the Financing for Sustainable Development Report 2023, the number of people experiencing acute food insecurity has doubled, compared to pre-pandemic levels (from 135 million in 2019 to a projected 345 million in 2023). The war in Ukraine has caused a rise in food prices, which will increase by 50% in 2022 compared to 2019.

industrialization of less developed countriesdoes not progress as expected: the 2030 Agenda calls for doubling the added value of the manufacturing industry in African countries by the end of the decade. That means making and selling more products instead of selling raw materials to other countries.

It is significant that value added has fallen from around 10% of GDP in 2000 to 9% in 2021.

Debt repayment is also weighing on the poorest nations: in 2022, 25 developing countries had to dedicate more than a fifth of their total income to servicing public external debt.

And gender inequality remains a major drag on development: in 115 countries women cannot run a business in the same way as men.

Women sort coffee beans in Addis Ababa, Ethiopia.

3) What possible solutions will be discussed?

The Forum’s agenda will draw heavily on the findings of the Financing for Sustainable Development Report 2023, released on April 5, which calls for stronger tax systems, more private and public investment for sustainable development, and tax system reforms. international finance that allow more resources to be obtained.

The report also argues that massive investment is urgently needed to accelerate transformations in areas such as power supply, industry, agriculture, transport and buildings, to usher in a “new green industrial era”.

Industrialization is often associated with pollution and waste, but historically it has been a driver of progress. The “green industrialization” proposed in the Report involves supporting low-carbon industries, including renewable energy sources such as wind and solar, the digital economy, and developing policies that lead to investment in sustainable activities. , while reducing the negative environmental impact of industries.

There are positive signs that the message is starting to sink in: global spending on the energy transition rose to a record $1.1 trillion in 2022, surpassing investments in fossil fuel systems for the first time ever, and the green economy has become the fifth industrial sector by market value, 7.2 trillion dollars in 2021.

4) What are the risks of doing nothing?

The gap between rich and poor is growing ever deeper. and, without a complete revision of the world economy, it is expected that 574 million people, almost 7% of the world population, will continue to live in extreme poverty in 2030. In this scenario, it is estimated that the external financing needs of low-income countries increase from $172 billion to $220 billion in the next four years.

Among the recommendations is a caveat: if the suggested reforms are piecemeal or incomplete, sustainable development will be unachievable, putting the 2030 Agenda and climate goals out of reach.

5) What now?

No one is under the illusion that the task ahead is daunting, and experts agree that long-term sustainable development will be elusive in contexts where humanitarian crises persist. Ultimately, UN economists want the Forum to lead to a profound reform of world institutions that best meets the immediate needs of developing countries.

Dock workers unload cargo from a ship in Dar es Salaam, Tanzania.

About the Forum

The Financing for Development Forums are the annual follow-up to the Third International Conference on Financing for Development, which gave rise to the Addis Ababa Action Agenda, a framework designed to ensure that financing is directed at improving societies, economies and the environment.

Decisions made at the Forum will feed into the High-Level Political Forum on Sustainable Development, a meeting to be held in July at United Nations headquarters to review progress on the 2030 Agenda, in particular Goal 17, on building partnerships to support all the Goals.

Its decisions will serve as the basis for other important high-level meetings, such as the Summit on the Sustainable Development Goals, the High-Level Dialogue of the general Assembly on Financing for Development, the ministerial conference on the Summit of the Future and the possible first edition of the Biennial Summit between the G20, the Economic and Social Council, the Secretary General of the United Nations and the heads of international financial institutions in 2024.

These events will serve as preparation for a possible fourth Conference on Financing for Development, which Member States decided to consider convening in 2025.