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Chapter III of the United Nation’s analyses the current trends in international finance for sustainable development and discusses the risks facing developing countries as they seek to implement the new 2030 Agenda for Sustainable Development and the Addis Ababa Action Agenda.

Chapter III: International Finance for Sustainable Development

While the financing needed to achieve the sustainable development goals is extremely large, global public and private savings would be sufficient — if the financial system were to effectively intermediate savings and investments in line with sustainable development objectives. However, currently international finance is not intermediated effectively: it is neither stable nor efficient in allocating credit where it is needed for sustained and inclusive growth. Additionally, finance is not generally channelled with social outcomes or environmental sustainability in mind.

These are very large challenges. The world requires action at both the national and international levels to simultaneously finance sustainable development and also to develop sustainable finance. These issues are at the core of the new international agreement on financing for development. The  is a comprehensive framework that provides the guidance needed, covering domestic and international public finance, private finance, and cross-cutting and systemic issues.

This chapter of the United Nation’s World Economic Situation and Prospects 2016 (WESP) analyses the current trends in international finance for sustainable development and finds that during 2011-2015, $4 trillion flowed from developing and transition countries to developed countries. It also discusses the risks facing developing countries as they seek to implement the new 2030 Agenda for Sustainable Development and the Addis Ababa Action Agenda.

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The World Economic Situation and Prospects is a joint product of the 51�Թ� Department of Economic and Social Affairs, the 51�Թ� Conference on Trade and Development and the five 51�Թ� regional commissions. Staff of the Financing for Development Office, in conjunction with the Development Policy and Analysis Division, lead the writing of the chapter in the report on “International Finance for Sustainable Development”.