Tegegnework Gettu: Keynote Speech at the Second ECOSOC Forum on Financing for DevelopmentMay 22, 2017
I would like to thank His Excellency Mr. Frederick Musiiwa Makamure Shava, President of ECOSOC, for the invitation to address Member States at this second ECOSOC Forum on Financing for Development. My thanks also go to the co-facilitators for the outcome of this Forum, His Excellency Mr. Marc Pecsteen de Buytswerve, Permanent Representative of Belgium, and His Excellency Mr. Jerry Matthews Matjila, Permanent Representative of the Republic of South Africa. UNDP is pleased to contribute to the Financing for Development process as one of the five major institutional stakeholders.
UNDP and sister agencies in the UN Development Group also contributed to the 2017 report of the Inter-Agency Task Force (IATF) on FfD, which serves as the major substantive input to this Forum and provides a first assessment of progress in implementing the FfD outcomes and the means of implementation of the 2030 Agenda for Sustainable Development.
As the first full year of implementation of the 2030 Agenda confirmed, countries are thinking more systematically about how to mobilize resources –domestic and international, public and private– for the achievement of the Sustainable Development Goals (SDGs). Efforts have begun at all levels to mobilize resources and align financing flows and policies with sustainable development priorities as the latest IATF report finds. However, many implementation gaps remain.
The first year of implementation coincided with a challenging year for the global economy, which experienced the slowest rate of growth since the global financial crisis. Against this backdrop, the rapid implementation of the Addis Ababa Action Agenda is even more critical as it can stimulate global growth and contribute to achieving the SDGs. It provides a broad framework not only for domestic actions but also for international co-operation, including supportive global trade, monetary and financial systems, to increase investments in sustainable development.
As the draft outcome document of this Forum highlights it is crucial to complement long-term investments, such as investments in resilient and sustainable infrastructure that are critical for stimulating economic growth, with measures to assist the poor and vulnerable people. Fulfilling the aspiration of the 2030 Agenda to leave no one behind requires proactive policies and investments across education, health, availability of credit, and in other services which broaden opportunity.
Realizing the commitment of the Addis Agenda to provide “fiscally sustainable and nationally appropriate social protection systems and measures for all, including floors” would be essential in this regard. As the work of the IATF demonstrates, there is a variety of options to finance social protection floors at country level, including reallocation of some inefficient expenditure, such as harmful fossil fuel subsidies, towards financing social protection systems. We welcome the proposal in the draft outcome document for the IATF, in consultation with the Social Protection Interagency Coordination Board, to review funding mechanisms for social protection and to report back with recommendations to the 2018 FfD forum.
Measures to assist the poor and vulnerable people should also include focusing the most concessional resources on those countries with the greatest needs and least ability to mobilize other resources, as Member States pledged in Addis Ababa. We welcome recent discussions within some International Financial Institutions on broadening eligibility criteria for concessional financing that reflect more accurately continued vulnerabilities, such as high exposure to environmental shocks in Small Island Developing States or vulnerabilities in middle-income countries hosting large refugee populations.
We note with concern the decline in the share of Official Development Assistance (ODA) allocated to the least developed countries, despite commitments to increase aid for countries most in need. Additionally, while it is critically important that countries meet their international commitments to refugees, it is important to ensure that resources spent in donor countries on hosting refugees do not reduce the amount of aid available for spending on long-term sustainable development priorities in developing countries.
Financing strategies also need to be risk-informed. For instance, as the UNDP research and the latest IATF report stress, instead of ad hoc and ex-post responses to debt distress following major shocks and crises, there is a strong case for scaling up innovative approaches, such as GDP-linked official sector lending. These instruments which aim to ex-ante and automatically trigger downward adjustments in debt service during shocks and economic downturns have the potential to help countries manage risk and cope with shocks more effectively.
More broadly, UNDP is supporting countries to define national sustainable development financing strategies, with a focus on identifying catalytic interventions, crowding-in additional finance from the private sector, building partnerships, scaling-up innovative financing mechanisms and improving the effectiveness of financial resources.
For example, last year through our strong partnership with environmental vertical funds, UNDP helped countries access $3.1 billion in 143 countries. These grant investments leveraged another $14 billion in co-financing; thus more than $17 billion was invested in sustainable development priorities in these countries.
In response to growing demand from countries for support in managing the increasingly complex development finance landscape, UNDP has undertaken development finance assessments (DFAs) that help governments to scan their financing landscape, including both financial flows and policies, and explore how to more effectively harness them.
Before I conclude I would like to stress that domestic resource mobilization remains at the core of financing for sustainable development. In partnership with the OECD, UNDP is rolling-out the Tax Inspectors without Borders initiative which facilitates targeted tax audit assistance programmes in developing countries across the globe. The initiative is a strong response to effective mobilization of domestic resources and the commitments made in Addis Ababa to strengthen international tax cooperation. Currently active in 19 developing countries around the world, Tax Inspectors without Borders assistance programmes have already resulted in an additional USD 278 million in tax revenues being mobilised. The establishment of the first South-South Tax Inspectors without Borders programme between Kenya and Botswana is also a significant milestone.
UNDP and sister agencies in the UN Development Group are firmly committed to assisting Member States in achieving the 2030 Agenda that leaves no one behind.