By Radwan Jakeem
With many economies reeling as a result of the COVID-19 pandemic, and as inequalities continue to widen, world leaders discussed options to unlock concrete investments to support a sustainable and resilient recovery at the Forum on Financing for Development (FfD Forum) from April 12-15.
The four-day Forum, held under the auspices of the UN Economic and Social Council (ECOSOC), took place as many countries are facing increased financial debt and liquidity pressures because of the pandemic. The FfD Forum was held virtually, with selected in-person sessions.
“We are missing a once-in-a-generation opportunity for bold, creative solutions that will strengthen the response and recovery while accelerating progress across the entire 2030 Agenda and the Paris Agreement,” UN Secretary-General António Guterres said. “To address the challenges of the future, including those revealed by COVID-19, we need an enormous push at the highest political level.”
New and immediate financing for sustainable development is the key to mobilizing the money that developing countries need to recover from the pandemic, said Prime Minister Imran Khan of Pakistan.
“The challenge posed by the COVID crisis is, as the UN Secretary-General has said, also an opportunity to ‘build back better’,” Khan noted in his opening remarks to the Forum. “We must seize this opportunity to transform the world economy into one that is development-oriented and environmentally sustainable.”
According to the Financing for Sustainable Development Report 2021 (FSDR), released by the United Nations on March 25, COVID-19 has reversed gains in poor countries, pushing about 120 million people back into extreme poverty, with women and girls being disproportionally affected. The report warns that only immediate action can prevent a lost decade of development for many countries.
The report also says smart investment in infrastructure would create sustainable growth and make the world more resilient to future shocks. This could help combat climate change and significantly reduce the risk of another pandemic. The report estimates that spending US$ 70-120 billion over the next two years, and US$ 20-40 billion annually thereafter, could save trillions of dollars in economic and social damage resulting from another crisis.
The COVID-19 pandemic has intensified calls for a stronger global response to the crisis and has focused attention on the need to invest long-term to reform and “future-proof” the policy and institutional systems at all levels in alignment with the 2030 Agenda for Sustainable Development. Poor and developing countries do not have the fiscal space to achieve these goals without sustainable development financing.
This also requires actions at the country level. Integrated National Financing Frameworks (INFFs) provide a structure for financing sustainable development and the SDGs at the country level.
The UN Department of Economic and Social Affairs (UN DESA), United Nations Development Programme (UNDP) and the European Union launched an INFF Knowledge Platform at a side event on April 14, as a digital space for gathering and sharing all INFF-related knowledge, lessons, resources and tools.
The platform housed a series of step-by-step guidance materials developed by the Inter-Agency Task Force on Financing for Development to help countries get started and support a growing Community of Practice.
The FfD Forum is an annual intergovernmental event mandated to review the Addis Ababa Action Agenda and other financing for development outcomes to advance the implementation of the Sustainable Development Goals (SDGs). The event brings together heads of state and government, ministers and other high-level government officials as well senior representatives of international organizations. Civil society, the private sector, and local authorities are also represented.
On April 13-14, concurrent with the FfD Forum, finance ministers and senior government officials met with the private sector and financial intermediaries at the 2021 SDG Investment Fair, where developing countries presented investment-ready projects to investors.
Scaling up private investment is crucial, particularly this year, as the COVID-19 pandemic resulted in a 42 per cent decline in foreign direct investment in 2020. Expanding public-private partnerships, or blended finance is also crucial for global recovery and for mobilizing implementation of the SDGs.