Ladies and Gentlemen,
Thank you for joining us today.
It is a pleasure to present the 2024 Financing for Sustainable Development Report.
Thanks to all those involved for the huge amount of work that has gone into producing it.
This report is truly the international system speaks with one voice – the result of collaboration between more than sixty international agencies through the Inter-agency Task Force on Financing for Development.Ìý
Such cooperation is vital.
Because – as this report sets out – we face a development crisis.
A crisis with finance at its heart, that requires an immense international effort to turn it around.
That effort must start now. Or it’s game over.
There are just six years to go to 2030. But multiple global shocks mean the Sustainable Development Goals are now worryingly off track.
At our current rate, we estimate some 600 million people will still be living in extreme poverty beyond 2030.
As this report shows: finance is the crux of the problem.
First, there is a major financing gap. Task Force members estimate that an additional $4 trillion must be invested every year to 2030 to have a chance of achieving the SDGs. This is up from an investment gap of around $2.5 trillion a year before the COVID-19 pandemic.
Second, developing countries have no space to manoeuvre. Their borrowing costs are so high that 3.3 billion people – around 40 per cent of humanity – live in countries that spend more on interest payments than on health or education. In 25 developing countries, more than a fifth of tax revenue goes on servicing external debt.
As countries struggle to service their external debts, attention naturally turns to efforts to increase domestic tax revenues. But in an increasingly digital globalized economy, resource mobilization is hamstrung without intensive and inclusive international cooperation to define and uphold tax norms – as evidenced by the ongoing presence of tax havens and illicit financial flows.
Third, the global economy is not supporting investment and development as it should. Ìý
Average growth rates have steadily declined over the last 25 years – from over 6 per cent before the global financial crisis to around 4 per cent today.
Developing country exports have slowed too. Between 2000 and 2008 they grew 15 percent. Since then, they have increased just three per cent.
And domestic policies are also blocking progress: fossil fuel subsidies rose to new a high of over USD 7 trillion in 2022.
We urgently need a surge of investment for sustainable development.
But, as this report sets out: that relies on fundamental shifts – in the global economy, and in public sector leadership. Ìý
And it urges action in three critical areas to make that a reality.
First, we must scale up public and private investment in the SDGs. This is why reforms to the development bank system are so important. With more capital, multilateral and national development banks can provide hundreds of billions in new resources for SDG investment, at affordable rates.
Donors also need to make good on commitments on official development assistance and climate finance. In 2022, only four countries – Germany, Luxembourg, Norway, and Sweden – met or exceeded the 0.7 per cent goal. That must change. Official development assistance has increased, but is increasingly being spent within the borders of donor countries. It is not supporting developing countries.
History is witness to the powerful role external public financing can play in enabling countries to recover from wars or other crises. Such support is not charity, but an investment in our shared future on one planet.
Public finance is also critical for bringing the cost of capital down and thereby leveraging private investment. This is what we call blended finance. We need public money to incentivize private investment that has a real and verifiable impact on sustainable development. Private finance also brings technology and entrepreneurship, which are key to any society’s development.
Second, we must remake the international financial architecture. Our current system was set up in 1944 and is no longer fit for purpose. Yet it determines conditions for investment. We must increase the voice of developing countries in global economic governance and improve the architecture for debt crisis resolution.
Third, leaders must close credibility gaps. Countries, especially the G20, have made many promises: on global governance reform; on aid delivery; and on introducing domestic reforms to tackle corruption, and inequality – including gender inequality.
Yet progress has been insufficient. As a result, faith in multilateralism has eroded. That threatens us all.
Geo-economic fragmentation imposes significant costs. And inaction on global challenges means a more dangerous, less prosperous future for us all.Ìý
Excellencies, ladies and gentlemen
The title of this year’s report is, Financing for Development at a Crossroads.
And truly, we are at a juncture.
Without rapid urgent action to get finance flowing, the 2030 Agenda will fail – no question.
So, this report urges us to make the most of the significant opportunities ahead.Ìý
The Summit of the Future in September needs a high-level political commitment to major reforms.
The Fourth International Conference on Financing for Development next year needs to agree the detail. We will need countries to commit to specific actions to transform economic and financial systems to deliver on sustainable development.
Excellencies, friends,
The message of the 2024 Financing for Sustainable Development Report could not be clearer: we must choose now either to succeed together or to fail together. We say, for the planet and its people, failure is not an option.
Thank you, I am happy to take questions.
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