How to finance the Post-2015 Development Agenda?
19 Dec 2014 by Gail Hurley, Policy Specialist, Development Finance
In this blog series, our experts share their thoughts and lessons learned on key financing for development issues, in the run-up to the UN’s Financing for Development conference in July.
The Sustainable Development Goals (SDGs) are much more ambitious than their predecessor; the new framework will tackle not only ‘MDG type’ challenges such as poverty eradication, but also issues such as climate change and peace and security. Much more financing – public and private, domestic and external – will clearly need to be mobilized.
What’s not clear is where these resources will come from. Most countries agree on the importance of improved domestic resource mobilization – and there has been significant progress over the last decade. But many also emphasise that development aid (ODA) will continue to play an important role post-2015. Donors should therefore honour their commitments.
In July 2015, Addis Ababa will host the UN’s 3rd conference on financing for development. The conference will not just look at different sources of finance. It will also address ‘systemic’ issues such as the international monetary and financial system, debt sustainability, international tax rules and trade. These areas are important ‘enablers’ of development.
There’s a lot on the table and the stakes are high; a robust outcome at the Addis Ababa conference will send an important signal of political support for the SDGs.
UNDP Administrator Helen Clark made a keynote address at the first preparatory session for the conference, emphasizing three main points:
1) ODA and international public finance will remain indispensable in the post-2015 period. However it is increasingly clear that international co-operations, beyond what we understand as ‘development’, need to be funded. This includes climate change adaptation and mitigation, environmental protection, communicable disease control and research, science and new technologies. We need to think about how finance for these areas sits alongside traditional ODA.
2) The SDGs cannot be achieved through public finance alone. Much of the resources needed to finance the post-2015 agenda will come from the private sector. Voluntary actions and corporate social responsibility are important but we may also need to look at where changes in regulation are needed so that private investment does not undermine – and indeed supports – sustainable development. There could be a need, for instance, to strengthen social and environmental impact reporting by enterprises.
3) Shocks – whether they be economics, natural disasters, conflicts, or disease outbreaks – are occurring with greater frequency and cost billions of dollars. Financing the foundations of more peaceful societies and stepping up funding for climate change adaptation and mitigation can generate high returns on investment.
In some ways, there is still a long (and bumpy) road ahead; consensus needs to be reached on some difficult areas (e.g. on fossil fuel subsidy reform). But Member States are aware that good results in Addis Ababa are needed, and UNDP and partners are working together to help contribute to a successful outcome.